This action might not be possible to undo. Are you sure you want to continue?
INVESTMENT OPPORTUNITY PROFILE FOR 3 STAR HOTEL IN NWFP
SUBMITTED TO AYESHA KHAN CHIEF TECHNICAL ADVISOR Community Based Livelihood Recovery Program (CBLRP) United National industrial Development Organization (UNIDO)
BY Sardar Shahid Farid Chartered Accountant
Disclaimer All material included in this document is based on data/information gathered from various sources and certain assumption. Due care and diligence has been taken to compile this document. The document may contain human, mechanical error or non accuracy of the information at the source. No liability for error, or omission or unintentional misrepresentation will be accepted. We reserve the right to make correction and changes wherever desired in this document or its subsequent versions.
The object of establishing a three star hotel is to facilitate the internal and external tourist and provide them with the best boarding and lodging facilities.e 150 double rooms and allied services is Rs 370 Million.Franchise Project description Foreign collaboration sought Studies Available Date: 1 . The sale at full occupancy i. The completion time for the project is two years and six months. The hotel will provide accommodation facilities for 150+ guests at any time. thus the total cost would be 148 million. The human resource requirement is 119 personal in the managerial. The region has access to all public amenities including water electricity and telecommunication facilities.2 FINANCIAL SUMMARY • • • • • • Sales Gross Profit Margin Net Profit Margin Internal Rate of Return NPV @ 10% Pay back period Rs 370 Million 46% 36% 21% 137 Million 03 and Half year Joint – Venture Loan Market access Sub contracting Buy – back arrangement Equipment purchase Feasibility study Other Specify 25 October 2007 Management expertise Technical expertise Marketing expertise Technology transfer Joint R&D Other :. There is no problem of entry into the market as the people here are known to be very friendly and there are no monopolies in this area of the economy.1 PROJECT BRIEF This document is being prepared for the establishment of a three star hotel. PROJECT EXECUTIVE SUMMARY 1. The project is proposed to be located at Manshera providing comfortable facilities to the tourist and donor community. The competitive advantage of the current project would be its prime location and provision of excellent and competitive services to occupants and non-occupants. 1.1. restaurants and club facilities would also be available to non occupants. The capital cost is Rs 118 million while the initial working capital required would be Rs 30 Million. skilled and semi skilled level. Manshera is considered a gate way for all the tourist activities of the locality. Apart from the usual guest entertainment facilities and the banquet halls. There will also be numerous jobs created indirectly.
The management will be in an advantageous position as they will get maximum support in their strategies and policies from the international chain. facilities. The occupancy and visits show some decreases at times. Kaghan. the government policies are inclined towards foreign investments and inflow of funds in the economy. therefore. linkages with the international chains and market standing. The large capital requirement of the project raises significant barriers to entry which constrains new entrants into the market. There is a big gap in the tourist market of our identified location. however the overall availability of the guests is constant in the market throughout the year. the fruit and fresh water trout fish of these areas is considered to be the best in the country. its risks are considered as further reduced. As the project will be providing employment opportunities for the local people. There are no other 3 star hotels available in the market. PROJECT RATIONALE Manshera is the gateway to some of the most scenic and traditional beauty spots in this part of the country. This is due to the fact that this city is gateway to all tourist sites of the area. costs.Maluk and Sirree Paye. the raw materials required for the operations of the project are widely available in the market and there is no need to be dependent on any particular supplier or manufacturer of a commodity. therefore. the dependence on subcontractors is reduced. However.2. with some key tourist attractions like Lake Saif-ul. there will still need to be a focus on capturing a substantive market share. particularly when vying for external tourists. therefore. The project should be able to fully leverage its international linkage the project. This area has an established tourist market in which the number of internal tourists shows increasing trends over the past five years. The external factors usually applicable to a project are political pressures. As most of the services are being provided by the hotel itself. namely: Balakot. 2 . Showgran. The policies and incentives for the employees will be set in such a way that the retention will be easier for the organization. There is a fair presence of internal and external tourists and guests flowing to the area. To attract the local market there is a need of strong personnel to take charge of the marketing activities and attract the local and internal customers through good relationships. Furthermore. Naran. thereby providing its service quality image and ranking in the market a distinct advantage. The trends in the local economy and the government and international community efforts of revival and recovery further provide a favorable environment for such an initiative. The employees should be treated as the main assets of the project. extra value added services and discounts. so the project is differentiated on the basis of services. the project is of a non-political in nature in the local market. Among the fresh food delights. Because of its inclusion and linkage with the international chain of hotels the project will enjoy the privileges of the international market by itself. This area is renowned for its natural beauty and friendliness of the residents makes the market of the Manshera favorable for this type of project. All these places are renowned tourist havens. since there is a presence of alternative accommodation providers in the area. no negative effects are perceived on its viability due to this aspect. Since. The competitive forces on the project are not very strong at the moment.
Karachi Hotel Mehran. Abbotabad. Components 1.3 3. 1 47 27 546 187 22989 1 47 31 580 226 25814 0 0 14. Karachi Beach Luxury Hotel.8 2. Islamabad. It is an industry of huge dimensions in its own right. Swat Serena. Dream Land Motel.3.9 12. • • • • • • • • • • • • • Sarbon Hotel. Rwalpindi. The hotel industry is both capital as well as labor intensive. Swat 3 . the Ministry of Tourism of Pakistan supports the Hotel industry and makes plans to cover various operational aspects of the industry. Amer Hotel. Lahore. Gulf Hotel. Flashman’s Hotel. Karachi Hotel Days Inn. Islamabad United Hotel. Karachi Hotel Flatti’s.2 20.7 7.8 6. MARKET INFORMATION The hotel industry is the backbone of tourism activity everywhere in the world. S. The statistical highlights of the hotel industry in Pakistan are as follows. Private Sector Hotels / Motels Hotels / Motels Rooms Public Sector Hotels/ Motels Hotels Rooms Motels Rooms Private Restaurants AC only Restaurants Seats Years 2005-06 1605 37590 1729 10519 % Change 2006-07 7. Karachi Hotel Jabees. Lahore. Margalla Motels. The information on hotels has been arranged province wise as reflected in the following table Provinces Hotel Establishments 2006-2007 66 604 161 570 155 120 53 1729 Rooms Islamabad (ICT) Punjab Sindh NWFP Balochistan Northern Areas Azad Jammu and Kashmir 2222 14445 7196 10235 3453 2024 944 40519 Following is the list of three star hotels currently operating. In Pakistan. in Pakistan. Rawalpindi.No.
D.500 Other Operation Departments Telephone 300 Laundry 200 Pool. Accommodation Per Double bed room Food and Beverages Room Service Room Refreshments Restaurants Parties Out Side Service Price 5.000 Reservations 54.800. 4.500 43.000 3.950.000 2. BUSINESS PLAN Non. Furthermore.082.950.000 30. If clean and comfortable stay is provided to the customers. Club and others 300 Shop License Fees Number of Shops 9. Other major customers include trade bodies and international adventure tourists. water and utilities.000 370.250. laundry.250.000 1.250.4 Distribution/Marketing Channels.000 1. 4 .000 18. 4.825. There will be one time and regular commission for the sales people. restaurant. Main customers would be the seasonal tourists. Multan. Bahawalpur Currently there are 13 Hotels in Mansehra with the capacity of 10-25 rooms each. the raw materials required for the operations of the project are widely available in the market and there is no need to be dependent on any particular supplier or manufacturer of a commodity.737. Hotel East Inn. Hotel Humere.3 Services provided The services provided will be rooms for night stay. the first year of the project’s expected occupancy would be 50% room occupancy with an annual growth of at least 10% anticipated. All the requirements are easily available at low costs.availability of three star hotels creates a profitability margin window for the first time investor.000 500 2.500 1.2 Raw Materials The basic requirements for running the hotel business are the amenities.750. G. Khan.900 365 365 Amount 273.000 1.000 10 Total Sales 4.000 50.000 87. Sindbad Hotel.737. 4.665 21. Shalimar Hotel.832.000 10. then with a very conservative estimate.750 10. the business houses and the donor community with their conferences and seminars.125 9. Peshawer.000 10.500 Rooms 150 Days in year 365 60 1 1 Parties 365 365 365 125. Faisalabad.782. 4.1 Product sales.125 9. halls for seminars and parties.300.125 2.950 7. Multan.500 7.• • • • • • Hidatgat Hotel. Shezan Residence.
Bell boys Drivers Janitors Guards and others Total Number 8 20 50 6 20 15 119 Monthly salary for the position 50.000 100. the promotional activities should start from the first year of the project. linkage with international chain of hotels.3 Working Capital Initial working capital required for the project is Rs 30.300.000 10.000 5. (RUPEES) Land (10 kanals) Building and Equipment Furniture Fixtures and Computers Vehicles Crockery Lenin and Others Total 20.000. 4.000 5.000.000.000 72.000 Monthly salary Total monthly salary 400.000 117. Description/designation Operating Management Cooking Staff Waiters.000.000. the allied services are expected to increase like wise.5 Human Resource Requirement.Marketing and related promotional activities will require a well thought out strategy and full advantage of international chain of hotels may be taken.6.000 4.405.000 20.300.000 300.6.000 75.000 1.6 Project Financials 4.000 30.000 2. the main sales pitch will be taken from the second year of establishment. This may include awareness-raising among the potential internal tourists.000. and provision of various added attractions to increase the (hotel’s) customer value. Although. 4.000 500.6. discount campaigns.000 15.000 3. 5 . The Human resource requirement directly associated with the hotel is listed below.2 Fixed costs The project capital cost is detailed below.000 5.000 4. It is expected that the room occupancy would be 50% in the first year and will increase gradually.1 Operational data The capacity of the hotel is 150 rooms and allied services.
200 1.200 513.560 178.002.6.000 340.512.000 340.800 196.4.4 Overhead cost In the first year following overhead cost are estimated.960 6 . Admin and marketing Salary Heat Light and Power Communications Printing and Stationary Traveling and Conveyance Entertainment Office Supplies Repair and maintenance 750.200 4.000 172.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.