A developer in Palau, Micronesia.
What did Hotel Solutions Partnership achieve for the client?
HSP’s preliminary conclusions and report were delivered to, and discussed with the client before submission of a final format report. HSP’s research, analysis and conclusions informed the client about relevant competitive and comparable hotels and hotel markets, and confirmed potential trading performance, and overall viability for the proposed upscale boutique hotel.
Katrina Craig, Jude Bolger, Etienne La’Brooy, David Williams
The client acquired land in Palau, Micronesia with a view to developing the nation’s first condominium resort complex, whereby investors purchase condominium units and place in a letting pool managed by a hotel operator with an expectation of an annual return on the investment. The proposed development comprises a mix of studio and one-bedroom apartments with a dual-key configuration supported by ancillary facilities: food & beverage outlets, spa, pool, duty free retail shop and, of course, a world-class dive centre.
The client approached HSP to carry out a resort feasibility study and to critically assess the draft plans and configuration to date.
The client’s main requirements from this study were as follows:
- to inform massing of the site in terms of recommended gross floor area and associated allocation to the various components of the development relative to optimum market positioning.
- to estimate likely trading performance for the resort based on a number of configurations.
- to conduct an investment appraisal of the proposed development based on a range of capital and unit sales assumptions.
Scope of Work
HSP conducted the following scope of work, as agreed with the client:
- Visit Palau and undertake a site appraisal. Consider the site in terms of access, visibility, fit with surrounding area and suitability for an accommodation development.
- Conduct interviews within the Palau market including but not limited to competitive operators, tour operators, government, planning and tourism officials, Belau Tourism Association personnel and project development associates.
- Conduct interviews with tour operators located in key inbound markets to gain insight into the dynamics of demand markets.
- Present interim findings to the client based on primary research identifying the proposed business model, business mix and market positioning for the site.
- Conduct a local economic profile citing key economic measures, with a focus on future development of the nation, associated timing and profile of development that will generate accommodation demand.
- Provide a local tourism market profile, highlighting visitation trends, origin of visitors and key tourism assets of the nation. Profile Palau airport as a key strategic access point.
- Produce an accommodation market profile, identifying the competitive accommodation landscape, associated facilities and highlighting market gaps where present. Custom benchmarking analysis will be included that will identify market performance parameters including occupancy, average room rate and revenue per available room for a collection of hotels in Oceanic islands of a similar nature and supported by commentary with local operators.
- Based on our research, develop an appropriate concept for the site and provide recommendations in terms of market positioning, prospective branding, size, scale, configuration, food & beverage facilities, ancillary facilities, approximate gross floor areas car-parking and operating structure.
- Identify and discuss likely demand markets, highlighting key information from our research with inbound operators and local market dynamics.
- Develop a bespoke financial model for the development that includes a 10-year year profit & loss forecast as well as investment appraisal of the development based on cost parameters provided by the Client.