Viability of the Hotel Business - Case Study Example

Feasibility Analysis Name: Institution: Tutor: Date: 1.0 Executive summary The purpose of the feasibility study is to enable an entrepreneur to have an insight on how the business will appear. The discussion below is about a hotel for tourists and will provide the tourist service and products. It will be located in Sydney whereby it is the main attraction site that has many tourists yearly. The analysis depicts various production processes that will enable the viability of the proposed business. Table of Contents 1.0 Executive summary 2 Feasibility analysis 4 2.0 Introduction 4 3.0 Description of a specific industry 4 4.0 Key driving forces to this business 5 5.0 Description of products and services for Cassandra Hotel 7 6.0 Operations plans for Cassandra Hotel 8 7.0 Conclusion 17 8.0 Recommendation 17 Reference 18 Feasibility analysis 2.0 Introduction Feasibility analysis is the an activity undertaken by an aspiring entrepreneur who has never conducted any entrepreneurial activity and has a business idea, therefore, he will conduct a feasibility analysis to determine whether the business idea he has been viable and will be a successful business in the future. This analysis will help the entrepreneur to be able to plan on how to start his business, it is inclusive of important details that a business person will have to look for in order to commence and implement a business idea. The following discussion will help in understanding the feasibility analysis. It is a discussion about my idea of venturing into a tourism business. I, therefore, intend to invest in a business that will serve the tourist and, therefore, I will establish a hotel in Sydney because it has some tourist attraction sites. 3.0 Description of a specific industry I intend to venture into the tourism industry whereby I will deliver services to the tourists and, therefore, the specific industry is a hotel. My hotel will be located in Sydney as it is obvious that this place is a renowned city in Australia and it has many tourist attraction sites, therefore, people always flood into the city to spend time viewing the sites in this city. The hotel name will be Cassandra Hotel and it will be located in Sydney. The business idea was contributed by the fact that due to the rising population of tourists in the world, Australia has been the most visited places because aside from Sydney, there are other attraction sites that make tourists come thronging in this Country. There is a stable environment in this place because it has a history of maintaining peace and harmony because they have to treat tourists in a friendly manner. The future trends are projected to be rising in the number of tourists because there will be many services for tourism. Currently, since there are quite a number of hotels in the region, they will not be able to accommodate the rising number of tourists in the near future (Mike peters, 2005.p 90). 4.0 Key driving forces to this business Before starting any business, there should be some factors that influence the entrepreneur towards developing the idea. These factors are the external factors whereby the business will depend on them since they will dictate the status of the business in terms of profits to be made and achievement of objectives (Hal, 2007). In the case of Cassandra Hotel in Sydney, there are some of the driving factors that enable me to have the ability to pursue my business idea. Increased household income; in this country, there is a future expectation of increased household income because of the future economic stability. This is caused by the fact that there is an ongoing economic development that aims at ensuring there is no poverty in the country. This implies that people in this place will have more money in terms of income. When there is increased income, people will tend to spend the extra money for luxury and this will involve touring attraction sites to spend weekends or holidays. The hotel will, therefore, have an opportunity to provide services to these people who come to spend time visiting these attraction sites. A rising number of retired people; this is one of the factors that highly influences tourism, you find that there is a rising number of people who have reached their retired age and, therefore, they do have a lot of money to spend since all their children are done schooling and maybe they have jobs. These people will always prefer going round the world to spend time elsewhere besides their home country. They will, therefore, visit places like Sydney where they will experience the tourist catmint areas and since they would like hotels and accommodation services they will, therefore, get these services from Cassandra Hotel. Reduced cost of air travel; Due to the ongoing transformation to attain economic stability in almost all the countries globally, there is a projection that the future costs of travelling will be reduced. This implies that the cost of air travel will also reduce and this will influence more tourists to come to Australia to tour. This is one of the driving factors that contribute to the hope for the best in the tourism business since many tourists will take advantage of reduced air costs to travel and, therefore they will flood in the Hotels which will earn the hotel some profits. The desire to travel worldwide; there is a great desire among people to travel and explore the world. People move out of their countries during some certain seasons like winter because they want to spend their time elsewhere where there is no cold. There is a great desire among people to tour the world and have fun in different places while enjoying the beautiful serenity of nature and unique buildings. This desire drives people to become tourists and, therefore, this is an opportunity for my hotel because we will offer quality services that will attract more tourists. 5.0 Description of products and services for Cassandra Hotel Since my business will major on providing satisfactory services and products to the tourists, I have, therefore, organized the products and services in a manner that will attract more tourists to the hotel. Services; the hotel will offer services such as accommodation whereby it will depend with the type of accommodation one will be capable of. Accommodation will be determined by the amount of money the tourist will pay. There will be a full course menu for tourists who will be accommodated and it will also depend on the amount of money to be paid for each meal. The meals will be served according to the wish of the visitors and since we will offer a variety of meals especially cuisine will attract more tourists. Other services will include offering Great Australian Wine and other drinks desired by the tourists. Above services will be inclusive of swimming pool, massage services, manicure and pedicure services will also enable tourists to feel relaxed and appreciate the services. Since the tourists will also wish to have a guide who will show them around the attraction sites of Sydney, the hotel will provide such services by using a bus to take the tourists around. Products; the hotel will also organize for products for those tourists who will want to purchase for some items. There will be a shopping mall inside the hotel that will only consist of items that the tourists will want to purchase so as to take them back to their homes. Since the hotel is in Australia, there are some Australian made items that will attract the tourists, for example, great wines from Australia, some ornaments and other items that symbolize the culture of this country. Others will include perfumes and Australian clothing. All these products will be availed in the mall so that tourists won’t have to go looking for them. The mall will also have the services such as enabling payment through the use of credit cards and this will ease the congestion of queuing for payment services. Since there are other hotels in the region that will serve as my main competitors, I, therefore, plan to attain a competitive advantage by offering extraordinary services and products to the tourist so as to attract more tourists to come to my hotel. These services include enabling the tourists to have an experience of being in Australia, they will, therefore, be toured around the famous places in Australia as long as they guarantee to use of hotel services. They will be given an opportunity to visit the wine industry and explore an aspect of wine and terroir; they will also be given an opportunity to explore Australian culture by organizing for a cultural experience workshop whereby the tourist will be able to appreciate Australian culture by attending to culture exhibitions. The hotel will also have some special accommodation for a family that wants to stay out of the hotel whereby we will have some special guest houses that have everything inside; this will enable the family to lie there for as long as they wish. 6.0 Operations plans for Cassandra Hotel Operational objectives; the operation's objective of the business will aim at providing satisfactory and welcoming services and products to the tourist. This will be achieved through ensuring that the services are offered as per the advertised. The tourists will therefore be treated with hospitality and since not all of them will understand the national language, we will have some people to offer a service of interpreting; this will enable them to feel free. We will also provide a good ambience to them because our main purpose is to build the image of the hotel, therefore, we will observe the ethics of dealing will different culture from different diversity and this will attract more tourists. We will ensure that all operations are monitored so that the tourist will be contented with our services and will want to visit some other day (Karen, 2008). Proposed location; the hotel will be located in Sydney which is one of the famous cities in Australia. This location relied on the basis that this region is full of tourists who flood in every year. Sydney is known for its beautiful scenery whereby there is an integration of attractive buildings and other catchment areas. Andrew (2003) stated that one of the most advantages of this location is the fact that most tourists prefer being in a central place where they can get access to most services aside from Hotel services, therefore, since Sydney is a city that is well known for having most services, the location is therefore appropriate. Another advantage is the fact that the environmental surrounding also provides a favorable place for establishing a hotel. However, there is a disadvantage of congestion because the place is frequently visited both by the locals and tourists. Acquisition of premises; I plan on purchasing the premises because according to my research, I found that there is an old building that has not been operating for a long time, therefore, I will organize with the owner who wants to sell it and it will be bought at approximately $ 3,950,000.after the building is acquired I will organize for a transfer arrangement whereby I will be granted the legal right to own the building and I will be give a land title deed. When the building is legally acquired, I will organize for renovation whereby it will be furnished and renovated in an attractive manner. The paintings will display the various services offered and it will be a means of advertising. It will be renovated such that it will create an ambience for the visitors. Production process; the production process will include receiving raw materials to be used in the kitchen and laundry, receiving of tourists and providing the necessary services. The flow chart below will help in understanding the process. All the above operations are integrated to result to high performance of the service and products. All the operations in the production and service delivery will be monitored by ensuring they are performed unacceptable manner. Graphical illustration of the layout The flow above illustrates the strategies that will be used to ensure efficient service delivery and, therefore, give the tourists a good hospitality which will attract more of them. Facilities to be used; there are many facilities that will be used to achieve the objective of the business which is to provide satisfactory hospitality to the tourists. The Hotel plans to purchase some of the equipments and lease some of them. The equipments that will be purchased are, particularly those that will provide long term services to the business and are, therefore, required for daily operations in the hotel. Those that will be leased will only be used during a specific period of time. The list below describes the equipment to be used in the business; Equipments Method of acquisition Amount Kitchen appliances purchased $ 280,000 Laundry appliances purchased $ 100,000 electronics purchased $ 200,000 Furniture’s purchased $ 300,000 Other equipments Purchased $ 400.000 Tents leased $ 50,000 per year Since there is a projected increase in the number of tourists, the hotel has planned to expand its facilities in order to meet the future rising demand. For example, we plan on expanding our hotel services by purchasing more land where we will construct other buildings to cater for hotel and accommodation services. Maintaining facilities; since most of the facilities and equipments will be purchased, there will be processes for ensuring the maintenance of these facilities, so that they provide required services and ensure satisfactory performance. The process below will help with maintenance of facilities There should be proper handling of the equipments and facilities by the employees to ensure they do not get damaged Servicing of the equipments should be done after every two months whereby all the appliances will be serviced by cleaning and fixing some damaged parts. This will ensure long term service. The employees will be trained on how to use all the facilities so that they will be familiar with the facilities they will be assigned to use. Technicians such as plumbers, computer and electrical technicians will be employed and they will help in ensuring proper maintenance of all the facilities. Materials and supplies required; materials required are mainly food suppliers whereby we will use contracts so that interested suppliers will apply for tenders. These are the main because we will require all varieties of fresh produce so as to ensure preparation of good meals for the tourists. Other materials include drinks such as wine and we will order directly from different wine industries and it will enable the hotel to have varieties (Lucas 2004, pg 45). The process below will guide the tendering procedure; Step 1.determining the tender; I will inform the organizations that are requesting for the tender to determine the tender they wish to apply for and also the contents of the tendering process. These organizations have to provide the projected supply for the next few years so as to avoid supply risks Step 2.preparing for tender request; this is an information that the organization which will want to apply for tender will provide. They will state the type of tenders, the contracts that will be required and also the expectations of my response towards their proposal. Stating the type of tenders will help the company to analyze the most available tenders and those that are scarce, so as to plan on how to ensure enough supply on both scarcest and most available ones. Step 3. Invitation for tender; this will be determined by the type of business and in this case it is a tourism and hotel business. After going through the applications from the request, invitation for the tender will follow whereby the organizations that applied are invited for the tender, determining the type of business and the tender required. Step 4. The response from the suppliers; this is an important part in the tendering process because the suppliers will have the opportunity to present their request in the form of supply. This step involves attending briefing sessions on the tenders that should be supplied, clarification of uncertain issues in the supply, responding to the organization about supply’s ability. Step 5. Selecting and evaluating the tenders; after all the tenders have submitted their interests, I will select and evaluate each tender for the purposes of compliance. If all the tenders are compliant, I will follow the next criteria of checking whether the tender aligns with the ones specified in the document. I will, therefore, compare the tenders that state the appropriate negotiation in terms of money and pick the best. Step 6. Notification step; this is where upon selecting the best tender, I will notify them on the how to document the projected outcome since they won the contract. They will, therefore, be required to attend briefing sessions to guide them on how to go about contract business with our company. Step 7. establishment and managing of contracts; I will conduct a brief meeting with the successful tender and engage in formal agreements on how to establish and manage their contracts. This will help the hotel to always have a follow up on the tenders and ensure they follow the terms of the contract. Inventory management system; the hotel will organize for inventory management system by ensuring the development of monitoring and control tools which will help in maintaining the inventories and ensuring impressive performance. The management control tool will develop a plan for ensuring appropriate accomplishment of activities in the production process, these activities are inclusive of safety on stock levels so as to avoid risks of supply, the ordering times should be met in time, and also ensure safe storage of inventories by creating a backup. Strategies for managing seasonal variations; I will design a strategy for managing seasonal variations whereby I will ensure there is enough supply of resources to be used in the production process. Also, I will ensure that during the peak seasons, for example, holidays and special events, the management team will work hard towards achieving double profits because there will be a large number of tourists. I will also design a mechanism for raising prices during these peak seasons because the demand will be high and the tourism services and products will be less. Regulatory and legal issues; there are regulatory and legal issues that should be considered to ensure smooth operation of the business (Grey, 2010, pg 67). The business will ensure they get licenses, health permits and environmental approvals that will enable the business to run well. We will also follow the requirements stipulated by the state on conducting the business and, therefore, ensure we apply business ethics when dealing with tourists and also when handling the surroundings of the business. We will comply with regulatory frameworks of the government by ensuring that we our operations are legal and are acceptable to the Australian culture. Number of employees Positions Terms of employment Recruitment source Two Top level managers Full time formal interview Five Junior managers Full time Formal interview Three Supervisors Part time Formal interview Twenty Middle level employees Full time Recruiting according to the field of experience Twenty five Lower level employees Casual Formal recruitment Training; the employees will be trained according to their field of experiences. The purpose of training is to enable them familiarize with the services and products they are supposed to deliver. For example, top managers will be trained on how to handle overall operations of the hotel by developing designs on how to manage and implement decisions. There will be use of performance management tools to ensure that the employees are dedicated to achieving the objective of the business (Zhou, 2004, pg 145). These tools will involve setting standards on performance required for every employee. The legal requirements associated with employees will be their conduct on ensuring they stick to the ethics that are stipulated by the government and also they should not take advantage of the tourists to benefit themselves. They should stick to the rules and regulations that will be provided in the hotel. 7.0 Conclusion The business will be successful since there is a promising demand of hotels in the region, the services I will provide will be attractive and I will use my technical competence from the experience of tourism and travel courses I have undertaken. This feasibility analysis will be achieved through implementing the above plans. 8.0 Recommendation I, therefore, recommend the application of all the managerial control tools to ensure full implementation of the plan. There should be appropriate performance measuring tools, as well. The hotel should also perform its operations in a unique and innovative manner to attract more tourists. Reference Andrew Beer, A. M. (2003). 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