The Client

A resort development company headquartered in Greece.

What did Hotel Solutions Partnership achieve for the client?

HSP submitted feasibility study reports incorporating Market Studies, Concept Reviews and Financial Projections for the two different sites to the client.

The feasibility studies confirmed the viability of the projects. It was determined that one development will be a luxury integrated beach resort with branded residences and an authentically Greek wellness offer, and the other development will be a more boutique offer focusing on fitness, agri-tourism and the digital nomad market. Our reports were used to prepare information memoranda for an operator search and separate investor and funding searches.

Background

The client required feasibility studies for two proposed resort hotels to be developed on Skiathos, in the Sporades Islands in Greece. Our feasibility team worked alongside a specialist resort masterplanner and a well regarded resort architect.

Client Need

The client approached Hotel Solutions Partnership (HSP) to undertake the feasibility studies which would comprise market studies, concept reviews (including the appropriate branding and operating solution), and financial forecasts.  Delivery of HSP’s reports informed, and were informed by, a masterplanning and design process.

As the developments could have a mix of uses; hotel, wellness and residences; HSP’s feasibility team comprised hotel, residential and wellness specialists working together to research wellness tourism and the saleability of residences at these destinations.

Scope of Work

Visioning Workshop & Market Study

• HSP Consultants conducted desktop research to profile the country and the Greek tourism industry, air and ferry links and the seasonality of visitation to Skiathos. We assessed supply and demand conditions and identified competitive hotels and comparable hotels of interest to the envisioned development.
• Our team of experienced consultants travelled to Skiathos to view the sites, and participated in a structured workshop with the design team to explore ideas and agree a high-level vision for the development.
• We prepared a report detailing our market findings and quantifying market potential, making recommendations with respect to market positioning, achievable room rates and occupancy levels, and target client mix.

Concept Review and Operating Options

• HSP Consultants worked with the project design team to advise on area programming to determine the ideal number, size and mix of guest rooms for both hotels.
• We provided descriptions of the food and beverage offer, functions facilities, adult-only vs. family friendly zones, sustainability and other relevant design and planning considerations.
• We incorporated the inputs from our wellness and residential experts and the client’s design consultants.
• HSP provided guidance on spa and fitness programming and crucially, we advised on the number, sizes, mix, pricing and management arrangements for the branded residences to be sold to help finance the developments.

We made recommendations on the appropriate operating options (e.g. branded operator, white-label operator + brand franchise or white-label operator plus own-brand).

Financial Projections

• HSP established price/quality positioning for the proposed hotels and residential units and projected likely average daily rate and occupancy levels based on competitor set data purchased from a recognized industry source.
• We prepared a 10-year forecast of income and operating costs based on cost ratios for hotels of comparable scale and concept in Greece.
• We modelled the cash flows, taking into account the development program, likely sales pace of the residential units and the build up of the hotel’s trading performance.
• HSP computed the project’s return on investment by preparing a simple unleveraged (pre-tax) ROI computation based on stabilized year projected EBITDA and the development cost estimates provided by the project team.