Hotel Feasibility Study
A Feasibility Study’s main goal is to assess the economic viability of the proposed business project. The Feasibility Study needs to answer the question: “Does the idea make economic sense?” The study should provide a thorough analysis of the business opportunity, including a look at all the possible roadblocks that may stand in the way of the successful realisation of the project.
Feasibility study is used to support the decision making process, i.e. in the planning phase of the project’s development cycle. It is an analytical tool that includes recommendations and limitations, which are utilised to assist the decision-makers when determining if the business concept is viable.
Among many business ideas, only some of them are actually commercially viable. Therefore, a Feasibility Study is effective way to safeguard against wastage of further investments. If the results of the Feasibility Study are positive, then the next logical step is to proceed with the full business plan. Feasibility Study contains many information, which are also necessary for the creation of the business plan, therefore Feasibility Study will support the business planning stage. For example, a good market analysis is necessary in order to determine the business concept’s feasibility. Study should contain the full supporting evidence for its recommendations, based on a combination of numerical data with qualitative and experience- based documentation.
Financial Analysis contains thorough market analysis with as many as possible different aspects, existing and projected ones, which may influence on the hotel’s operations. Usually, Financial Analysis makes projections for the period of up to five years, because of the nature of the hotel business development. Financial Analysis projects the profit for each of the hotel’s operating sectors, such as rooms division, F&B, wellness and spa. Furthermore, Financial Analysis projects fixed and variabel costs, as well as the GOP-a (Gross Operating Profit).