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Computers and Real Estate Developers by msv19261

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									Feasibility Studies
Itinerary
 Understand the terminology relevant to feasibility studies in
  the tourism and hospitality industry
 View a Feasibility Study Case Study and apply concepts
  learned in this course to the situation
Terminology
 IRR – Internal Rate of Return
 ROI – Return On Investment
 ADR – Average Daily Rate
 RevPAR – Revenue Per Available Room
 Food Cost - % paid / % charged
 LTV – Loan to Value Ratio
 Amortization
     The rate at which a new purchase loses value
 Contingency Plan – a back-up plan in case
  something goes wrong
 Indicators – SMART
What is a Feasibility Study?
 When you have an idea and you want to know whether it is
  possible you complete a “feasibility study”.
   Do you want to own a hotel? Restaurant? Market and invention?
Is a Hotel in your Future
 Whether you said yes or no, you did a feasibility study in
  your mind!
   Situations are oft-times more complicated though
 If you have an idea and it MIGHT be feasible then you should
  complete a full Feasibility Study
   Feasibility Studies support detailed planning and reduce
    research time.
   They will also serve as the first forecasting tool at your new
    business
Aspects of a Feasibility Study
1.   Technology and System Feasibility
2.   Operational Feasibility
3.   Market and Real Estate Feasibility
4.   Resource Feasibility
5.   Schedule Feasibility
6.   Economic Feasibility
7.   Legal Feasibility
8.   Cultural Feasibility
Technology and System Feasibility
  Will the system perform adequately?
  Complete a Logic Model
              Resources                        Activities                    Outputs                     Outcomes                            Goals
TEAM (100 full-time staff)     Identify possible clients      Once weekly updates          Better understanding in          Gov't personnel paying
Social work, tracking,         Advise clients                 from the governor's and      gov't of homeless/poverty        attention to 100% of stake-
advising, assisting clients,   Manage clients                 mayor's office will be       and better understanding         holders in the community
and office duties              Support post job offer         retrieved                    in WIA of gov't direction.       during decision-making.
TEAM: Correspondent(s)         Weekly contact &               Short-term housing           Homeless and poverty-            Make the WIA office
Market, contact w/ org.        reporting for gov't &          offered for all homeless     stricken clients have tools      indispensible for gov't
such as schools and poss.      supporting institutions        clients who are enrolled     necessary to break down          budget
employers, volunteers,         Political coalition of mayor   in & attending courses       barriers to employment:          25% less homelessness in
and maintain contact w/        and governor offices w/        Five classes take place      water, housing, skills,          city and 100% less home-
gov't entities.                equity agenda.                 weekly (occupat. Training)   training, counseling, etc.       lessness for clients of the
TEAM: Teacher(s)               Develop curriculum             100% of clients receive                                       office.
Teach clients in various       Daily teaching sessions        workplace training           Homeless reduction.

school to work occupational    Develop indicators to track    No. of jobs clients have     Higher job acquisition.          75% of clients get jobs
training programs.             learning objectives            increases 25%/month          Better trained workforce.        and feel comfortable in
TEAM: Director(s)                                             Patricipating clients have                                    their jobs.
Manage programs and            Manage people, programs,       more knowledge of work-
personnel                      & par levels as necessary      place skills and envir.
TEAM: Researcher(s)                                           as tested founded in exit
Track, maintain, & indicate    Develop & track indicators     interviews with clients.
program and possibilities.     for program success            100% of clients receive
Materials/Office Supplies                                     school-work occupational
paper, pen, printer, fax,      Mgt will maintain par          training.
pencil, computers, etc.        levels                         Poverty for clients          clients make more money          25% poverty reduction in
Clients                                                       decreases 25%                and move off of welfare          city
Clients to partake in the      Attempt to use program to      Child care services are      programs (poverty
WIA programs                   improve their situations.      used by 75% of client        reduction).
Building(s)                                                   mothers who state it as a    Higher quality of life for all   An overall goal of WIA is
A place for work to occur,     Locations for program          barrier.                     stakeholders/community           the betterment and life
clients to visit, school to    events to take place           Psychological counseling     members.                         improvement of 100% of
work to occur, etc.                                           services are used by 50%                                      residents of community.
Financing                                                     of clients                                                    Goals and actions leading
Money to keep programs         Money to keep program          Clients make 25% higher                                       to goals must take this to
functioning at proper level    on-going.                      wages than non-clients                                        account (all stakeholders).
Operational Feasibility
 A set of indicators used to measure how well a proposed
  system solves the problems, and takes advantages of the
  opportunities identified during scope definition and how it
  satisfies the requirements identified in the requirements
  analysis phase of system development.
Market and Real Estate Feasibility
 …involves testing geographic locations for a real estate
  development project.
      Developers conduct market studies to determine the best location within,
       and to test alternative land uses for a given parcels.
      Jurisdictions often require developers to complete feasibility studies
       before they will approve a permit application for hospitality
       establishment.
      Market Feasibility takes into account the importance of the business in the
       selected area.
Resource Feasibility
 This involves questions such as how much time is available to
  build the organization,
      This would include whether it interferes with normal business operations,
       type and amount of resources required, dependencies, etc.
      Contingency and mitigation plans should also be stated here.
Schedule Feasibility
 A project/hotel will fail if it takes too long to be completed
  before it is useful.
      Typically this means estimating how long the system/hotel will take to
       develop, and if it can be completed in a given time period using some
       methods like payback period.
 Schedule feasibility is a measure of how reasonable the
  project timetable is.
      Given our technical expertise, are the project deadlines reasonable? You
       need to determine whether the deadlines are mandatory or desirable.
Economic Feasibility
 Economic analysis is the most frequently used method for
  evaluating the effectiveness of a new system.
   Most commonly utilized in feasibility studies is the cost/benefit
    analysis,
     The procedure is to determine the benefits and savings that are expected
      from a project and compare them with costs. If benefits outweigh costs,
      then the decision is made to design and implement the system.
Legal Feasibility
 Determines whether the proposed system conflicts with legal
  requirements.
   Ex. - a Data Processing system must comply with the local Data
    Protection Acts.
Cultural Feasibility
 In this stage, the project's alternatives are evaluated for their
  impact on the local and general culture.
      For example, environmental factors need to be considered and these
       factors are to be well known. Further an enterprise's own culture can
       clash with the results of the project.
      In tourism this is often referred to as a PEST Analysis and more recently
       as a PESC+E Analysis.
      The Case Study
 I have worked on teams coordinating Feasibility Studies for five
  different properties
   The Sheraton Suites – Houston Galleria
     Intern, The Wedge Group (ownership group)
   Marriott Waterway – The Woodlands, TX
     Intern, Housekeeping Accountant, pre-opening
   Best Western/Hilton Garden Inn – Houston Uptown, TX
     Finance Director, Cougar Corporation
   Hilton Houston Post Oak – Houston Uptown, TX
     Front Office Manager
   Hilton – Homewood Suites Galleria – Houston Uptown, TX
The Hand-Outs, Pt. 1
 YEAH! In depth financial statements!
   Executive Summary –
     Cost Breakdown –
     Financing Selections –
     Licensing –
     Budgeting –
The Hand-Outs, Pt. 2
 Total Cost and Financing (5 yr)
   Length of time due to balloon loan from bank
 Renovation Costs
 Salaries and Wages (not included)
 Income and Expenses
 Development Analysis
 Misc. Expenses (you only have p. 1)
 Loan Calculator (you only have p. 1)
Would you like to do feasibility studies?
 PKF (link) and Smith Travel and Research (link)
   Focus your efforts on finance (in lieu of accounting)
   Be outgoing, esp. concerning networking
   Be willing to work for free (intern) to get experience
   Be willing to gauge success on others’ terms rather than your own pre-dispositions

								
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