ABSTRACT
Long experience in the tourism sector has demonstrated that many investment decisions are very emotional; sometimes projects by physical planners are taken for granted, wrong investment appraisal methods are applied and/or the right method is used incorrectly.
A project can be appraised from the micro or the macro point of view. In the first case, only benefits (receipts) and costs for the investor (private or public) come into the picture. In the second case, the benefit and cost items are many and of different natures. The total impact of the project for the destination should be considered. Application of cost-benefit analysis is the correct method (see Chapter 14).
This chapter focuses on three topics. First, there is a focus on the nature of investment appraisal and an exploration of the difference between micro- and macro-approaches. A second section deals with the conventional and the more scientific methods of investment appraisal, while the third section looks at the content of a feasibility and business plan related to the hotel sector.
