Written for two readers
A good feasibility study serves the owner, who needs clear conclusions, and the lender, who needs evidence and assumptions they can test. Both are served by the same structure.
The essential sections
- Site and location: access, visibility, surroundings and approvals.
- Demand: each source of business, sized and supported with evidence.
- Competition: existing and planned hotels, with rates and occupancy from field research.
- Concept: positioning, segment, room count and facilities.
- Area programme: the space budget for the building.
- Development cost: hard costs, soft costs, pre-opening, interest during construction and contingency.
- Projections: ten years of revenue, costs, fees and cash flow.
- Returns and sensitivity: what happens if occupancy, rate, cost or timing go worse.
What lenders look for
Credible demand evidence, realistic ramp-up after opening, a sensible debt level and adequate cover for repayments, and an experienced operator or brand. Studies that rely on optimistic assumptions without evidence tend to be discounted heavily.
The most useful page
In Amit’s experience, the sensitivity analysis is the page owners return to most often, because it shows how much room for error the project has. Learn more about Amit’s feasibility studies.
