Demand for Lodging and Conference Spaces in Ohio-Yellow Springs - Case Study Example

Demand for lodging and conference spaces in Ohio-Yellow Springs Introduction The American hospitality multi-billion dollar industry is highly dependent on the availability of the disposable income in the community as well as availability of the leisure time (Santoro, 2015, p. 17-22). Hospitality facilities such as restaurants in America have been a key source of income to varied groups of people (Santoro, 2015, p. 18). In the year 2012 alone, the American hospitality industry generated more than 1.5 Trillion as economic output and accounted for roughly 7 percent of the country’s exports and provided more than 7.8 million jobs to the US citizens (Jun et.al, 2013, p. 81). The hotel business in America has in this case been a great source of income to the Americans and the government. Even though there are numerous restaurants in America, there is still room for growth of extra facilities. The nature of this report is a feasibility study to assess the demand for lodging and conference spaces in Ohio-Yellow Springs. In this regard, the report seeks to provide sufficient information to business organizations seeking to construct modernized restaurants in Ohio-Yellow Springs. Before the commencement of any particular project, a feasibility study is normally conducted to the environment in which a project is to be implemented. Researchers have in the past years perceived the feasibility studies as research tools that are widely dispersed. However, the general requirements, guides, standards on feasibility analysis designs have not been well developed (Bowen et.al, 2009, p. 452, Kingston, 2004, p. 157-164; Swarbrooke, 2001, p. 26). The underlying aim and objective of any feasibility study is to evaluate or examine the future possible failure or success of a prospective endeavor (Palvia and Palvia, 1988, p. 211-224). The endeavors in this regard, are the future projects to be undertaken. Therefore, the feasibility studies provide knowledge and based on this particular knowledge, decisions are made. In comparison to the business plans, feasibility studies are different in that feasibility studies investigates the viability of the projects to be undertaken and refines the initial business idea that is to be undertaken whist business plans that use the information derived from the feasibility studies (Hofstrand, and Holz-Clause, 2009a, p. 2; Kingston, 2004, p. 167). Basically, a feasibility study simply analyzes the alternatives to the project that is to be undertaken and ascertains the best scenarios for the respective organizations (Hofstrand, and Holz-Clause, 2009b; p. 12). Secondary data was pooled from Unite State Census Bureau (Census), Chamber of Commerce in Ohio, Greene County Convention and Visitors Bureau and national databases such as Harris Info-Source and Info-USA’s Power finder Database. This is the information that was adequately used to assess the viability of the project-constructing a modern restaurant in Yellow Springs. During the feasibility study, analysis of the local market, location, competitors, industrial trends and financial projections was perceived very important (Bowding et.al, 2011, p. 45-67; Rasle and Ingram, 2000, p. 102). Feasibility study is normally undertaken in the first stage of the property development process which encompasses the stages of concept development, planning, construction, operation and assessment management (Ransley and Ingram, 2004, p. 25). It is considered vital to undertake an in depth research in the first stage of property development process-concept to ascertain the general concept of the project which is to be implemented (Rasle and Ingram, 2000, p. 96). It is in this stage assessment of the profitability and viability of a project is assessed and needs are appropriately refined (Swartbrooke, 2001, p. 76). Concept and design The main concept and idea in this project is to develop a modernized restaurant facility in Ohio-Yellow Springs that is capable of offering more lodging and conference spaces. Design is perceived to be a roadmap to accomplishing an expectation or a process of operationalizing the concept and ideas into reality (Hassanien, 2013, p. 145, Ransey and Ingram, 2004, p. 45-67). In this regard, so as to ensure that the concept and design of the new facility to be built was ascertained, the secondary data collected was provided to the hotel consultants and in this case TR Madigo and Company of Elmhurst in Illinois. Market Based on the secondary data, Ohio-Yellow Springs is a developing market for the hospitality industry. In the recent past, the hotel market has been observed to significantly grow with more that 30 percent on a period of five years (World Travel and Tourism Council, 2014, p.2). In this case, the market is capable of adopting additional 30 to 50 units of extra guests units (World Travel and Tourism Council, 2014, p.2). A deeper analysis of the hospitality trends in Ohio-Yellow Springs by Center for Urban and Public Affairs (2005) ascertained that the area around Yellow Springs was a pocket market that is quite unique in the sense that there exist an adequate number of the local businesses and education institutions that are providing an adequate demand for the accommodations and venues for conferences. It is estimated that over 20,000 guests visit Yellow Springs per week (World Travel and Tourism Council, 2014, p.1-3). Further, evaluation of the secondary data indicated that the location of the business was vital for the market of a business entity. In this regard, the modern restaurant is to be situated in a location where it was accessible, visible, attractive and convenient to the market of the area. World Travel and Tourism Council (2014, p. 4), considered the Yellow Springs-Ohio as a small town in US that a population of less than 4, 000 people and home to Antioch University, Mc Gregor and Antioch College. According to US Census Bureau (2010), the population in Yellow Springs-Ohio rose to approximately 6,000 by the year 2010. Increase in the population is in this case an influential factor to the hospitality market in Ohio. The existing rivals to the modern restaurant facility in Yellow Springs include Arthur Morgan House B & B, Young’s Jersey Dairy and Sunrise Cafe (World Travel and Tourism Council, 2014, p. 2). In this case, Arthur Morgan House B & B is a direct competitor to the modern restaurant facility. Further, Yellow Springs’s hospitality market is observed to be segmented in terms of behavioral and demographic characteristics. Segmentation of the market is adequate in development and implementation of the market strategies (Armstrong et.al, 2012; Baines et.al, 2010). According to US Census Bureau (2010) people of Ohio were highly educated, middle-income earners and the highest group fell between 30-50 years. Finance The modern restaurant facility is expected to cost around 85 billion dollars with expected revenues of 10.8 million dollars a year. According to Center for Urban and Public Affairs (2005, p.12), Yellow Springs’s hospitality market is largely dominated by retail establishments which approximately comprise of a quarter of the restaurant business in the city. With an initial investment of 85 billion dollars, it is expected the business will recover the cost within 50 years of operation. According to Allen et.al (2011, p. 45), assessment of the risk of the business not being able to meet the anticipated cash flow is significant. In this case, it is considered that following the continued increase in demand for logging and conference spaces in Yellow Springs the business may not meet its anticipated cash flows. Legislation The most significant way to establish the modern restaurant facility in Yellow Springs is to hire land. According to Center for Urban and Public Affairs (2005, p. 12), exactly 10 years ago, 46 acres of land were purchased by Yellow Springs and Miami Township Community Improvement Corp for exactly 400,000 dollars. Over the years, the cost of land in Ohio has gone up it is estimated to be around 400 million per acre. The Ohio State adequately controls the leasing and hiring of land. In this case, adequate laws and regulations are in place to guide hiring and leasing of land and property. Conclusion From the study, the Yellow Springs market could potentially sustain additional 30-50 guests units. In this case, a construction of a new restaurant facility would be an adequate way of absorbing the additional influx of guests. In this case, the construction of the new facility should be close to the main business generators in Yellow Springs. 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