The feasibility study is the first critical step that should be undertaken by first time Hospitality investor or an asset owner before venturing into a hotel project. For a profitable hotel business, overall Return on Investment (ROI) and Internal Rate of Return (IRR) are the most critical metrics.
And that is why it is important that the investor gets the hotel feasibility study done by a specialised hospitality consultant to get detailed reports on below points.
- Current hotel market scenario for the City.
- Current and future room and F&B supply.
- Detailed assessment of local market conditions, demand segments, market demographics and demand & supply.
- Identifying the Product mix, Brand strategy and Market positioning
- Searching profitable Franchise or Brand operators.
- Seek suitable debt and equity funding from banks or private investors.
- Evaluate optimum use of the land.
- Define suitability of the land for the type and scale of development.
- Analysis of demand for hotel facilities like meeting areas, restaurants, bars and recreational facilities.
- Real time cost estimates and expenses for the next 10 years.
- P&L and return on investment (ROI) projections for the next 10 years.