how we can help you

The Process of Developing a Hotel
In normal circumstances the process of developing a hotel follows a logical sequence:

• Secure the title to the site.
• Conduct a market and financial analysis of the project.
• Obtain concept design from an architect.
• Obtain costing for the project from cost consultant.
• Conduct investment appraisal, and adjust design if necessary.
• Engage hotel management company.
• Prepare detailed design.
• Secure planning consent.
• Secure funding.
• Tender the construction contract.
• Construction.
• Fit-out and commissioning.
• Pre-opening.
• Opening.

This is a relatively simple model of the hotel development process, and in reality several of the steps will run concurrently, rather than consecutively as shown.

The Process
Our consultancy services include:

• Preparation of market and financial feasibility studies
• Operator selection and contract negotiation
• Design reviews
• Project coordination as Owner's Representative
• Asset management.

The Feasibility Study
The market and financial feasibility study is an essential first step in the process, after securing the site, and we specialise in the preparation of such studies.

There are five main reasons for carrying out a feasibility study of a hotel project for the benefit of the promoter, to ensure full understanding of the risks and rewards of the project; to determine the most appropriate facility provision for a given site and market; to brief the architect as to what the market requires in terms of facilities; to attract the attention of an operator and to form the basis for contract registration and to support submissions to debt and equity providers.

In general terms, the output of a feasibility study is information, conclusions and recommendations on :

• the current and projected future economic, political and social environment in which the proposed hotel will operate;
• the location for the proposed development, and the strengths and weaknesses of the site;
• the current and projected future market environment in the project location, with a detailed supply and demand analysis;
• product concept and market positioning, the number and type of guest rooms and other facilities; operating factors of relevance, including aspects of management and marketing of the property;
• projections of revenue, cost, profit and annual cash flow, and a calculation of the resultant return on investment.

Development Advisory Service
The sooner the operator is on board, the better. The international operators have specific requirements regarding the design of the hotel, which need to be taken into consideration now, rather than incurring the expenses later of changing what has been built. Domestic operators tend to be less prescriptive in their requirements. We can advise on the choice between domestic and international operators, and help to implement the decision.

It is likely that the concept design and preliminary costings are carried out before the operator is signed up. We can provide input on the design, to derive a concept that will be acceptable to most operators, and that will be more efficient to operate.

In addition to the design reviews, we can stay involved after the selection of the operator, and during the construction phase, as project coordinator, acting as the Owner's Representative at site and project meetings, and advising on the selection and procurement of FF & E and other materials. We also oversee the activities of the operator, to ensure compliance with their contract and with the Owner's objectives. And we are there as an information resource for the Owner to tap into.

Finally, once the hotel is open, we can provide asset management services, which ensure that the Owner's investment goals are being met by providing the information tools required to make appropriate decisions and ensuring that the property is managed and maintained as an investment in accordance with the Owner's expectations regarding financial returns, value creation and maintenance, and financial risk mitigation.