Our standard approach to Market and Feasibility Studies, which we often employ as a point of departure for our final conclusions and recommendations, typically includes the following priority criteria for analysis:
General market characteristics (a look at important "macro" socioeconomic factors and future prospects)
Site analysis (a review of the identified site or the several under consideration, from the standpoint of marketability)
Market analysis (an analysis of recent years' macro through micro tourism demand, lodging and/or food services supply inventory, marketplace trends, the extrapolation of future demand growth, "special" marketplace opportunities which may be unique to the development, and likely future demand share for the project under review)
Project description (an examination of conceptual planning to date including a review of architectural drawings)
Recommended facilities, amenities and services mix (confirmation of what is conceived or planned, OR, our recommendations for the project's optimum marketability based on the results of foregoing research)
Financial analysis (a five- to ten-year schedule of estimated operating revenues and expenses to the cash flow line, with accompanying text explanations of the assumptions underlying these)
Financial Analysis assignments require us to take an approach somewhat similar to the one we use for valuations. Historical (recent years') operating financial, operations, market and other performance-oriented results are obtained and reconstructed in accordance with the appropriate "Uniform System of Accounts" for comparability with industry "norms." Research is limited to what is deemed appropriate for the assignment, but usually entails some review of directly competitive factors, as well as our view as to the marketplace and operations strengths and limitations of the competitive environment including the property under review. Financial analysis assignments are typically components of larger engagements e.g., business valuations, operations reviews and business/market planning.
Business Valuations typically incorporate these criteria also, to which a "Valuation" section is added and recent years' financial operating results reconstructed in accordance with "A Uniform System of Accounts for Hotels, Restaurants, Clubs, Resorts," modified as necessary. Valuations also include relevant sales "comparables," the choice and application of an appropriate capitalization factor and an expressed "Indication" or "Opinion" as to value.
Business and Market Plans build on the results of completed and positive market/feasibility studies and deal with aspects ownership, a review of operating management, recommendations on branding, the identification of financing alternatives, a development timetable, and pre-opening market and operations plan with budgets. Comment on operating standards and procedures are typically made, and dependent upon the specifics of the engagement, recommended operating standards and procedures developed.
Branding and Standards recommendations are based on a comprehensive review of the existing project (or are developed during a market/feasibility study for a proposed new development). This deals with the broadly competitive strengths and limitations of the project, identification, review and "matching" of the project with an established commercial "brand" as recommended by us, and the operations, marketing and financial implications of formal association with the recommended brand.
