Week3 - Week 3 Lecture Support FEASIBILITY A feasibility...

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Week 3 Lecture Support FEASIBILITY A feasibility study gives the project team the answer to the classic “go or no go” question. How many rooms must it sell to be successful? What markets will this hotel need to attract and to what extent? How will the hotel do this? A good feasibility study examines the current and projected business climate, evaluates competitors, outlines the basic features of the proposed hotel, and presents financial projections that outline anticipated occupancies, revenues and expenses for five to ten years of operation, and likely development costs. After you’ve attended the lecture and done the reading, you should be familiar with: The components of a feasibility study The concerns of the development team players: what is each player looking to learn from the feasibility study? The basic mathematics behind the go/no go decision: occupancy, demand and supply growth, average rate Exercise: While a feasibility study provides lots of different kinds of information to lots of different kinds of people, everyone turns to the financials to get a snapshot of the hotel’s projected occupancy and growth. Below are some of these “snapshots” plus some additional information. Is the project a “go” or “no go”? Why ? Scenario 1:
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Week3 - Week 3 Lecture Support FEASIBILITY A feasibility...

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