Hotel feasibility studies provide an analysis of the market area under consideration to determine the viability of developing a new hotel/resort via two formats:
I. Field Research Report:
In hotel feasibility studies, a Field Research Report provides an overview of the highlights observed, as well as preliminary operational projections for the market’s ability to support the proposed hotel development under consideration.
The report is intended to be used as an internal document. It is not intended to be used for external purposes, such as investment or lending activity. It is used to determine if further research of the subject market is necessary, and if a more detailed Comprehensive Hotel Market Study should be completed.
In a Comprehensive Hotel Market Study, these preliminary report comments would be expanded and presented with more detail.
II. Comprehensive Hotel Market Study:
Comprehensive field research will be completed to determine the relationship between the subject market and the proposed hotel’s lodging supply competitors and lodging demand generators. Economic indicators are reviewed to determine the stability and future growth of the general subject market area.
Multiple years of occupancy projections, average daily room rate (ADR), and sales revenue projections for the proposed hotel are based upon a detailed review of the field research data. Facility recommendations as to product type, size, brand affiliation (if any), and amenities are based upon the lodging demand research for the proposed hotel.
The research conducted includes a macro- and micro-market analysis of the market area where the proposed hotel will compete to determine the viability of this market to support the proposed hotel.
Typical areas of research include:
- Analysis of subject site for the proposed hotel
- Economic indicators of the subject market
- Lodging room demand generators
- Analysis of the competitive lodging supply
- Issues, risks and recommendations that should be considered when developing the proposed hotel