Typical Feasibility Study
(Homewood Suites, Harrisburg, Pennsylvania, used as sample)
TABLE OF CONTENTS
CLIENT LETTER
INTRODUCTION
Interim Hospitality Consultants is engaged to conduct a Feasibility Study with Financial Projections for a proposed hotel development to be located at the developer's site. The proposed hotel is to have all the amenities commensurate with the type of development desired.
Objectives of Study
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Evaluate the market potential for the proposed hotel based on an analysis of the market support for a lodging facility on the subject site.
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Comment on the appropriate numbers types, and sizes of guest rooms and other amenities which would best serve the needs of the market.
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Project levels of market penetration, occupancy, and average room rate for the proposed hotel for the first five years of operations.
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Prepare detailed projections of Cash Flow from operations before fixed charges for the hotel for the first five years of operations.
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Provide a written report containing the conclusions of the Feasibility Study and present Financial Projections for the proposed hotel.
Scope of Study
The Feasibility Study includes a variety of work steps which enable us to evaluate historic trends and project the future competitive supply of and demand for lodging accommodations in the area. The scope of the work includes, but is not necessarily limited to the following:
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An analysis and economic evaluation of the market area based on interviews with area businessmen and government officials, compilation of pertinent market data, and a review of those economic indices which would be most relevant to the success of the proposed project.
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An inspection of the site and surrounding area to determine their suitability for the proposed hotel, taking into consideration such factors as accessibility, visibility, and proximity to demand generators.
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An inspection and analysis of the hotels in market area that would provide the primary competition to the proposed hotel. Our census of the competitive facilities included both existing hotels as well as those under construction, planned, or rumored.
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A determination of the current overall market demand and rooms in the subject area and the share of market demand that is generated by tourists, commercial travelers, and group meetings/ convention delegates.
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A projection of growth rates for the various market segments based on the factors that should impact the future demand for hotel rooms.
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An evaluation of the projected hotel supply and demand relationship in the market area to reach conclusions regarding the market support for the proposed hotel.
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Comment on the proposed facilities in terms of number, mix, and type of guest rooms, and recreational amenities.
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Comment on the proposed facilities in terms of style and size.
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Projections of occupancy and average room rate for the proposed hotel, including projected market mix of guests.
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Projections of cash flow from operations before fixed charges for the first five years of operations.
CONCLUSIONS
Market Area Analysis
Site and Area Evaluation
Supply and Demand Analysis
Proposed Facilities and Services
Projected Utilization of the Proposed Hotel
Financial Analysis
Brochure Pouch
Franchise Information
MARKET AREA ANALYSIS
Introduction
Community Profile
Key Advantages
Business Climate
Area Businesses
Real Estate
Transportation
Education
Health Care
Quality of Life
Neighboring Markets
Calendar of Events
Attractions
Recreation
Summary
SITE AND AREA EVALUATION
The Site
Highways
Maps and Site Pictures
Eastern U.S. Map
Eastern Pennsylvania Map
City Map
Site Pictures
Traffic Counts
Signage, Accessibility, and Visibility
Proximity to Demand Generators
Utilities
Summary
SUPPLY AND DEMAND ANALYSIS
Competitive Market Set
Pictures of Competitive Hotels
Hilton Hotel Corporation
Smith Travel Research: Five Selected Hotels
Occupancy Graph
ADR Graph
Trend Graph
Smith Travel Research: Market Area
Smith Occupancy Graph
Smith ADR Graph
Trend Graph
Hotel Room Tax
Extended-Stay Lodging Chain Survey
Up-Scale Extended-Stay Hotel Competition
Demand Analysis
Commercial Guest Demand
Leisure Demand
Hotel Base Year
Summary
PROPOSED FACILITIES AND SERVICES
General Concept
Room Mix
Food and Beverage Facilities
Meeting Facilities
Prototype Rendering
Fold-out Drawing
2-room Suite Layout
PROJECTED UTILIZATION OF THE PROPOSED HOTEL
Projected Market Penetration and Occupancy
Competitive Set Average Room Rate
Projected Average Room Rate
FINANCIAL PROFORMA
Proforma Year One
Minor Revenue Departments
Proforma Payroll Recap
Rooms Department
Administrative and General
Food & Beverage Complimentary Services
Sales and Marketing
Homewood Suites National Franchise Fees
Utilities
Repairs and Maintenance
Proforma
The U.S. Extended-Stay Lodging Market by PKF
INTERIM HOSPITALITY CONSULTANTS
Selected Completed Projects
Feasibility Study Client List
Brochure
Letter of Agreement
APPENDICES
"A Change for the Better," reprint of Real Estate Forum article.
"Why 'carpe diem' when you can carpe whole weeks at a time?," reprint of Hotel & Motel Management ad.
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