ABSTRACT
An integral and early part of the process of developing hospitality properties is the determination of whether the proposed development exhibits the essential requirements for a successful business. This determination is generically referred to as a feasibility study.
Such studies are frequently carried out by specialist external consultants who provide an objective and independent assessment. In-house prepared studies, however diligently prepared, can never be truly independent, which may restrict their usefulness.
The feasibility study usually addresses a new build development but can equally be applied to a refurbishment, extension or repositioning of an existing facility. The data gathered for a feasibility study can also be used, and often is used, in the valuation for acquisition of an existing facility.
This chapter will focus on the requirements of a feasibility study addressing a new build hotel and will set out and discuss the methodologies used in data gathering and interpretation, and the way in which conclusions can be drawn and reported.
The chapter is structured as follows:
Objectives
Definitions
Market opportunity
Financial projections
Reporting and limitations
