Lecture_5___Feasibility

Lecture_5___Feasibility - Lecture 5 Feasibility When should...

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Feasibility Lecture 5:
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When should an idea become reality? When a formal FEASIBILITY STUDY indicates that the proposed development is likely to be successful.
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Who performs feasibility studies? Typically consultants working for… Perhaps a hotel operator
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Why do them? To test the development idea To attract equity financing To support applications for debt financing To attract a hotel operator To satisfy regulatory agencies To…?
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What issues must be examined? Demand for rooms Supply of rooms Financial projections Economic conditions Demographics of surrounding area Climate for development Transportation infrastructure And…?
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Demand for Rooms Who needs rooms and why? How are competitive hotels doing at attracting demand?
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Demand Generators And?
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Demand Segmentation Business Leisure Group Business Leisure Group
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Seasonality & Special Conditions Expected Unexpected
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Supply of Rooms 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2005 2006 2007 2008 Downtown Airport Mall Area Existing supply directly competitive properties other properties Proposed changes in supply new construction renovation repositioning
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HADM 105 Revisited Occupancy = Demand Supply
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