Feasibility Analysis of Bluestar Ski Lodge Resort and Hotel - Report Example

Running header: Feasibility analysis Student’s name: Instructor’s name: Subject code: Date of submission: Introduction Bluestar Ski Lodge Resort & Hotel will be a 3 diamond hotel offering luxury accommodation as well as associated amenities mainly to locals and tourists who practice ski tourism as well as other forms of tourism. The hotel will also offer a wide range of facilities including conference and meeting rooms among other tourist facilities. I will be the sole owner of the hotel and will employ a management team with direct knowledge of tourism and hospitality industry in a bid to ensure that the hotel offers the best quality services to our guests that becoming the ultimate hotel of choice in the region. In addition, I intend to establish strategic partnerships with other service providers such as travel agencies and tour operators in a bid to ensure our guests find a one stop shop hence enhancing their comfort during their stay in the hotel. Below is the hotel’s feasibility analysis report which is aimed at ensuring the establishment of a unique hotel in the region hence enhancing its success probabilities. The tourism Industry overview The tourism industry is a vital one in Australia. For instance, the industry earned $35 billion an equivalent of 2.5% of the GDP in 2013. 73% of the income was attributed to domestic tourism with international arrivals contributing 27%. Since 2012, the sector has been receiving over six million international tourists. The industry employs over 500,000 people according to (Wallace, 2013). Tourism has also been noted to contribute almost 8% of the country’s total export earnings. Australia is a famous tourist destination with its most popular tourist destinations including the coastal cities of Melbourne and Sydney, Queensland, the world’s largest reef or the Great Barrier Reef, Australian outback and the gold coast. Other major tourists’ attractions in Australia include the world life.. The tourism industry trends Tourism in Australia has been improving since 2010 in spite of the recent global economic challenges owing to increasing numbers of international tourists. In 2011, international tourist arrivals improved by 4.4% while domestic tourism improved by only 2.1%. The sector is expected to improve further with the government having released its 2020 industry potential estimates which are aimed at ensuring the sector is worth $140 billion by the year 2020. Such growth will come from new markets which include china which is emerging to be the country’s largest tourist’s source. For instance, tourist arrivals from china hit 626,400 in 2012 according to Tourism Australia (2014). The Great Barrier Reef has emerged the largest tourists’ attraction site in Australia with 2 million people visiting the site in 2012. The industry’s Key driving forces and key success factors The growth in the tourism industry has been occasioned by the country’s vast landscapes, rich indigenous cultural heritage, the country’s sophisticated cities and regions, its nature based tourism offerings and the country’s friendly and culturally diverse population. The country’s sophisticated and interconnected tourism infrastructure has also been a contributing factor. Other tourism key driving forces include; i) Due to the increasing household incomes, households can now have enough to spend in tourism and leisure. ii) There has been rising numbers of retiring baby boomers who have enough to spend on leisure and tourism. iii) Due to increased globalization and improved communication channels thus leading to increased awareness, there has been increased desire to see the world globally including Australia (Mathew, 2009) iv) The strategic location of Australia to the Australian emerging markets has provided opportunities for growth and investment in tourism (Chattel, 2013). v) The country’s strong domestic market which contributes over 60% of the country’s tourism. vi) The country’s sophisticated high class accommodation facilities. vii) Globally, the expanding aviation capacity has been reducing the cost of air travel which has enabled more people to travel for leisure and tourism. viii) Australian government support via policy directions such as tourism 2020 with the aim of expanding the industry’s potential. Description of products/services Bluestar ski lodge resort and hotel will offer the following services to its guests. a) Accommodation –this will consist of various suites including business, deluxe and honeymoon as well as single and double rooms. The rooms with include air conditioning systems, TV, mini bar, internet access and a bathroom. The rooms will either have a panoramic view or a garden view. The hotel will also offer security coded entrance to rooms and buildings, secure luggage storage, 24 hour reception, helpdesk as well as business amenities. b) Food service/Grill – the hotel will offer a complementary breakfast. We will also have room service offering lunch and dinner to guests (Kotler, 2013). We intend to serve healthy foods as well as provide special diet services on request. c) Recreation – Bluestar will offer a wide variety of recreational facilities including pool, sauna /whirlpool. We will also offer access to facilities in the surrounding areas including skiing services, walking; hiking, parasailing, boating and similar water sports city tours among other services. However, it should be noted that skiing will be a differentiating feature for the hotel. In this connection, our services will also include ski rental/ clothing shop. Differentiation and benefits As can be seen above, the hotel will offer a wide range of services to make the gusts life memorable and comfortable. This is in conjunction with establishing strategic alliances with other service providers to offer services that our hotel doesn’t offer thus making us a one stop shop. In addition, our services will be offered at relatively low prices in a bid to ensure as many guests as possible enjoy our exceptional quality services. The benefits to specific groups will include; i) For family guests, Bluestar will offer childcare and children facilities and accommodation that suited for babies and children ii) We will offer business tourists with a whole range of conference facilities including internet access (Mullins, 2013). We will also offer Limousine and tax services from the hotel to the airport and other regions. iii) We will offer a large variety of amenities for the young and old including such recreational activities as skiing, hiking and related sports iv) We will offer services designed for group tourists including sports and recreation, dinner dance evenings, guided tours among other related services. Competition analysis The region has over fifteen hotels that offer the same services we intend to offer. As such, we expect the competition to be strong. However, the biggest competition is expected to come from Perisher and Thredbo resorts. As such, we intend to offer our customer a different hotel experience not possible in any of the above hotels. Bluestar will offer tourists with a comfortable environment that will ensure return visits by offering them all the services they need as described above. In addition, guests will have the opportunity to gather in our main room for drinks and light music around a large fire place. Our main competitive advantage will be on our pricing, the quality of service and our location. Operations objectives Bluestar Ski Lodge Resort & Hotel will be operational all year round although we expect our main season to be during skiing times .the following operational plan details out how we will run the company (Donald, 2004). It details out the location, the roles to be performed by our team, how resources will be acquired and the financial resources needed for effectively running the Hotel. Bluestar Ski Lodge Resort & Hotel location We will be located along church road on the outskirts of the city. This is an ideal location strategically selected for its visibility and image. It is easily accessible by both our guests and our employees. The following are the reasons that informed the selection of Bluestar location; i) The location is outside the city and has been selected for the charm of the natural surroundings, accessibility to surrounding infrastructure including airport, bus station and highways and hence it will offer an ideal retreat for our tourist and business travelers. ii) The hotel’s proximity to the airport is expected to increase our short stay tourists iii) This is a popular tourist destination and this increases our chance to make good business Premises Bluestar Ski Lodge Resort& Hotel will acquire 200,000 square foot building which will house our services including offices, storage, accommodation as well as conference and catering space. It will also house our 100 rooms including suites and several conference facilities. As such, high costs will be required to finance acquiring of the premises (Sampad, 2012). The property will be leased from ideal properties limited. Leasing as opposed to building has been favored due to the associated cost savings. It is estimated that $3 million will be used in leasing the building. Bluestar service flowchart As stated above, Bluestar will offer a number of services to its guests. These services will start when the customer makes a hotel booking online up to the time he/she leaves the hotel. On arrival at the airport, the hotel will transfer the guest to the hotel either using our own vehicles or through our appointed travel operators. When in the hotel, the guest will be assigned his/her room or suite depending on his/her preference. The hotel will then offer the services outlined above in conjunction with our appointed tour operators. It should also be noted that food at the hotel will be optional and hence guests can opt for outside catering. When the guest’s stay comes to an end, the company will transfer the guest to the airport. Below is the service production chart for Blue Star Ski Lodge Resort and Hotel. Arrival of customer at the airport Reception Catering services The required facilities The following facilities are required for smooth operation of Bluestar. They will either be bought or leased depending on their nature and cost. i) Parking related facilities –we intend to construct our own parking lot to accommodate full capacity of the hotel. The parking and related facilities will be bought or built by the hotel at an estimated cost of $20,000. ii) Security facilities- Bluestar will be outfitted with state of the art security facilities, smoke and sprinkler systems in a bid to enhance guest security. This is expected to cost $50,000. iii) Vehicles -will be necessary for transporting our guests as well as undertaking other services outside the hotel. As such, we have budgeted $50,000 for use in leasing the vehicles. We have opted to lease since it is cheaper than buying. Besides, the lesser will undertake their maintenance. iv) The company has budgeted $10,000 for purchase of office furniture. V) Catering related facilities – these will be bought at an estimated cost of $20,000. vii) Computers, printers, photocopiers and their related software –these will be bought by the company at a cost of $7500. These are important for business operations. They are required for obtaining information as well as for use in recording transactions between the hotel and the clients. Assets maintenance process at Bluestar Ski Lodge Resort and Hotel As has been stated, Bluestar will enter into a contract with the company leasing the required vehicles. One of the conditions in the contract will entail the lesser undertaking maintenance for the vehicles. In addition, I intend to employ a team of experts who will undertake the maintenance of the computers and software. An expert from the company selling the catering equipment including machines will also visit the company once in a year for their routine check up. He will also be available for repairs and maintenance whenever requested. As far as all the other equipments are concerned, the company intends to come up with their maintenance procedures. Suppliers of materials and supplies Bluestar Ski lodge and Hotel will be a big establishment requiring a lot of materials and supplies. These include; i) Office supplies including stationery, promotional materials, letterheads etc ii) Vehicle and catering related fuel iii) Food supplies iv) Cleaning and toiletry supplies v) Beddings /guest room facilities vi) Lighting equipment etc. The company therefore plans to undertake competitive bidding for the supply of all the above materials and supplies apart from for fuel which will be supplied by my own petrol station (Rhonda, 2010). Factors to be considered in qualifying bids will include cost and quality of the supplies. This is a very costly process and hence $5000 has been budgeted for it in addition to $55 non refundable fees at which tender qualification forms will be sold. Successful binders will enter into a three years supply contract that will be renewable subject to their performance. The company’s inventory management system As can be seen above, the new business will involve a lot of supplies/consumables. It is for this reason that sufficient quantities are maintained so as to avoid the problems related with overstocking or stock outs. Such problems include loss of revenue as well as incurring a lot of stock holding costs in case of overstocking. As such, my company will install a sound stock management system that will aid in determining stock usage, maintenance of adequate stock levels and reordering supplies whenever set reorder levels are achieved (Kano, 2012). The stock management system will ensure that Bluestar adopts correct ordering times adopting stock safety levels as well as observing of minimum and maximum inventory levels. Other services to be rendered by the inventory management system will include service management, asset tracking, as well as product identification features including barcodes. The inventory management system will be helpful by helping the company; i) Cut down on product obsolesce and spoilage costs ii) Keep track of inventory levels iii) Track inventory movement iv) Maintain minimum balance of inventories v) Receive supplies Dealing with seasonality of demand at Bluestar We intend to operate throughout the year in a bid to maximize revenue and hence sales. However, we appreciate the fact that the tourism industry is bound to experience seasonality in demand which would lead to poor performance during the low seasons. As such, we have devised the following strategy for dealing with seasonality of demand based on the nature of our customers. i) Skiers – the Melbourne region has grown to be among the best ski resort areas in Australia. As such, we intend to capitalize on skiing during the winter months (Tripadvisor.com) ii) During the months of summer, we will capitalize on hiking as well as other outdoor activities. iii) We intend to hire some staff on part time basis so that during low seasons, we will only maintain the permanently employed employees. iv) During the low season, we will capitalize on discounts and lowered prices in a bid to ensure continuous inflow of customers. Regulatory and legal issues Bluestar Ski Lodge Resort & Hotel intends to abide with all regulatory and legal issues before we can start operations. This includes ensuring that all our staff are certified by the public health department as well as obtaining all the necessary trading licenses. In addition, we will obtain all the insurances required under the law before we can start operation. The licenses to be obtained include; i) Hotel operating license- the registrations will be filed with both state and federal government agencies in compliance with necessary state laws ii) All necessary environmental compliance permits will be obtained from the necessary regulatory agencies iii) The necessary food catering licenses. The personnel plan As indicated above, the hotel will offer a range of services to the guests implying that we require a number of staff members. These are displayed in the table below; Personnel Numbers projected Proposed remuneration package Accounting and clerical staff 5 $3200 Engineering/plant 6 $2300 Accommodations 20 $1800 Security 8 $1800 Catering 10 $1800 Housekeeping 12 $2000 Marketing 5 $2700 + 5% commission Sales 4 $2000 + 3% commission Guides 6 $2000 Drivers 8 $2500 Conference 2 $2000 Total 86 The above employees will be required to possess a minimum of a diploma qualification in their respective areas of operation. With the exception of the office staff, the rest will be required to undergo a six months course in tours and travel in a bid to ensure that the hotel offers memorable experiences to our guests. It is expected that the above numbers of staff will increase as our operations expand. With the exception of the finance and marketing staff, most of the rest will be hired on part-time basis as a strategy of dealing with seasonality of demand. We have contracted a recruitment agency to undertake the hiring process. However, after the employees have been successfully hired, they will be required to undergo a three months probation period after which they can be employed on full time basis. Employee performance appraisal will be based on customer feedback, level of transactions as well as amounts of sales. The employees’ payment/remuneration packages for the employees including their allowances are displayed above. It should be noted that the above packages are inclusive of superannuation contributions. The packages are bond to rise as Bluestar operations and hence profits expand. The company will also have a policy of up to 7.5% annual increment in salaries depending on the employee’s performance. Bluestar’s technical feasibility/conclusion As has been established above, the tourism industry in Australia has a great potential given its major tourist attractions as well as the government’s commitment to improve the industry. As such, Bluestar has a great likelihood of succeeding. However, the company’s greatest challenge will be dealing with the already existing competition given my lack of experience in the industry. However, I intend to overcome the challenge by hiring a management team that has experience in the field (Jade, 2010). The resources that I require in establishing the business have been identified and arrangements are in advanced stages to acquire them. Although I may require $1 million to establish the business, I still have a deficit of $400,000. However, Fidelity bank has offered to bridge the gap by offering me a loan. I also intend to welcome an investor who has experience in the hotel industry on board so as to enhance the hotel’s chances of survival. As such, I am confident that the venture will succeed given the availability of all the resources required. I will hence embark on the next stage of establishing the business. References: Wallace, B2013, Australia’s tourism industry, Travel weekly, Retrieved 23rd April 2014. Tourism Australia.com, 2014, Tourism in Australia, Retrieved on 23rd April 2014 from; http://www.tourism.australia.com// Mathew, W2009, Fundamentals of sustainable business, London, Rutledge. Kotler, P2013, Marketing for hospitality and tourism, Sydney, Pearson. Mullins, J2013, Hospitality management and organizational behavior, New York, John Wiley & Sons. Donald, E2004, The hotel and restaurant business, New York, John Wiley & Sons. Sampad, K2012, Tourism: Principles and practices, Oxford, Oxford University Press. Rhonda, A2010, Successful business planning, London, Rutledge. Tripadvisor.com, 2014, Australia: Ski Australia/Where best, Retrieved on 23rd April, 2014, from; http://www.tripadvisor.com.au/Travel- Chattel, C2013, Australia targets China for tourism boost, ABC news, Retrieved 9th April 2014. Kano, M2012, Inventory management systems, London, Rutledge Jade, B2010, Technical feasibility analysis, Sydney, Prentice Hall. Read More