Running head: HOTEL FEASIBILITY STUDY 1 Hotel Feasibility Study Student’s Name Institutional Affiliation HOTEL FEASIBILITY STUDY 2 Hotel Feasibility Study Hotel feasibility study refers to strategic analysis of a possible project of constructing a hotel to verify whether it is in a position of making a viable, valid and sustainable financial investment. It provides a general information of the optimal requirements to penetrate the market, probable performance and the expected internal return of the intended hotel investment. In details, the feasibility study may entail review of the market essentials, propose a well structured brand name of the hotel, the density of the competition that the hotel is expected to face, human resource requirements for instance labor and related factors, frequency of customers visiting the hotel or tourist activities in the area and suitable geographical location for the hotel mostly along highways, close proximity to airports or a populated urban center. This paper seeks to describe the pro’s and con’s of conducting a hotel feasibility study. There are so many pro’s of conducting a hotel feasibility study including the significant fact it reduces to minimal degrees the chances for failure after you have ventured into the investment. This is because all the required financial revenues and cash expenses had been clearly and precisely estimated in the feasibility study. The success rate of the hotel investment is highly enhanced since the important parameters had been exhaustively evaluated thus reducing the failure of the investment. Furthermore, the objectives and the goals of the investment are clearly stated down in the feasibility study thus giving the management a right path to focus on to make sure that they are fulfilled at the end of a certain period of time. The mission and the vision statements are also outlined alongside the goals to help them keep engrossed to achieving those goals through satisfaction of customer needs and their wants for a better living. In addition, hotel feasible study helps in coming up with viable strategies, plans and policies that would help in the smooth running of the operations and activities that the hotel would be HOTEL FEASIBILITY STUDY 3 engaging in. The internal organization of the hotel and the different departments that would be found in the investment are generally laid out. For example, the division of works and specialization of duties among the employees, number and qualifications of human resource required and roles to be played by the top management. In the long run, the feasibility study aids in the success of the investment as it helps in making the accurate decisions for your hotel business. New opportunities are also identified in the process of coming up with a good feasible study and the hotel may end up having respectable identity by which it will be known in the market. The con’s of conducting a feasibility study of a hotel is that it may take too long time and wastage of efforts in conducting the study. Deep analysis of the business description, market structure, technical requirements for operating machines or computers and making financial consultations is really a tiresome work and demands a lot off time to get completed. Moreover, the process may be costly and expensive to afford as some industries that are specialized in conducting feasibility studies may charge so high for their services. The sector of hotels is so wide and requires to be investigated deeply by professionals to avoid wrong estimates which may totally interfere with the whole process. The analysis of the feasibility study is mostly paper work which may to a large extend differ completely from reality of the practical situations and the actual predicted actions in real life. This possess a great danger to the start and sustenance of the investment as the gap between the forecasts and the genuineness or realism may be so huge to cover. The business ideas that are drawn on the hotel feasibility study may not meet legal requirements and this may lead to the closure or denial of permits by the government. In conclusion, conducting a hotel feasibility study before starting up an investment is a very critical step to make as it provides a detailed analysis of all requirements and examinees the viability of the investment. The advantages of a feasibility study include helping in reducing HOTEL FEASIBILITY STUDY 4 the chances of failure of the business one its set up, clearly stating the objectives and goals of the business, Identifying the qualifications and number of employees needed, and aids in coming up with viable strategies, policies and plans. In contrast, high cost, wastage of time and efforts, and difference in the estimations in the feasible study and reality form the con’s of a hotel feasible study.
