INVESTMENT PLAN for Hotel

“Financial Management for Services”

INVESTMENT PACKAGE

Contents

1. EXECUTIVE SUMMARY
C.I.G. Exclusive Resort is today the leading resort hotel on the island. It is acknowledged both by its guests and its competitors as the one way stop for tourists who seek high quality services at a stunning natural environment. Our collection of distinctive rooms and villas categories and the chain-branded name addresses successfully the demands of a variety of guests.
During the last 5 years a rapid increase in arrivals of upper class tourists, especially from Russia and the Arab Emirates, has been recorded on the island. This emerging market is ready to spend lots of money on their holiday and at the same time has very high expectations of customer service.
By offering the type of luxurious accommodation we present here and personalized customer service that addresses the needs and the demands of this new prosperous market we aim to establish the firm’s position on this niche market hence strengthening our position in the Greek tourism industry.
2. FACT SHEET
Regal Palazzo Imperiale
3-Bedroom Palazzo, Waterfront, Sea View
INDOOR 200m2, OUTDOOR 300m2, SLEEPS 6
Special Features
Private entrance
Wooden decks to a private beach
Furnished garden courtyard
Outdoor lounge and dining furniture
Spacious master bedroom Ensuite bathroom with ‘river bath’ for two
Second bedroom with marble bathroom with sea view whirlpool plus separate shower cubicle
Nanny or staff quarters with ensuite shower and WC
Walk-in wardrobes
Exercise equipment.
Fully-equipped kitchen
Office facilities and Wi Fi internet connection
TV security system
Private parking
Yachting possibilities

Famous Class Services
Welcome and escort to the villa by the management
VIP Check In & Check out
Twice Daily Maid Service
Private transfer from & to airport
Personal temperature-controlled Wine Cellar and Cigar Humidor
Personal shopper & shopping assistance
Private Butler
In-villa Spa (massage, manicure, pedicure)
In-villa exclusive private dining (dinner, BBQ etc.)
Organize a celebration - birthday, anniversary, honeymoon, kid's party

3. BUSINESS PLAN
With a mission to overlook no detail or desire the firm Is focused on delivering a seamless experience for each guest and every request. Behind the amenities and beyond the design details lies signature service philosophy. Discerning international travelers with a penchant for culture and luxury know that C.I.G. quality will always meet their expectations!
In the 30 years since its establishment the firm has always been on the forefront of novelty striving to offer differentiated products and services to its loyal guests. Having researched the local and national tourism market we have come to the conclusion that the building of a new villa, the Regal Palazzo Imperiale, the summer home of royalty and jetsetters, as we call it, is the novelty that will carry on our successful business in the following years.
The statistical data shows the growing numbers of upper class - both social as well as financial- international tourists, who select our beautiful island for their holidays. The market research has clearly demonstrated that these people spare no money for their satisfaction, but at the same time they have very high and concrete expectations in terms of customer service quality as well as accommodation quality. A most common phenomenon until now is that such guests, prefer to stay on friends’ or businessmen’s yachts because they want to enjoy the Greek blue sea but at the same time shield their serenity and extravagant way of living.
It is a new market with great possibilities for profit for the businesses that will enter it first. This is why today we present you with our plan to raise the Regal Palazzo Imperiale. Our resort stretches on 7000m3 providing us with enough space to construct the Palazzo. Our highly qualified managers and well trained staff reassure the quality of the offered services. The project is meant to provide the guests with a rewarding multilayered experience that will escort the guest before and after his/her arrival.
Our competitive advantages are:
Our geographical location, at the heart of the island, breathtaking sea and mountain views, ease of reach from the airport makes it an ideal place for the guest who wants to relax as well as for the guest who wants to discover the island.
We are the very first resort hotel, that decides to invest in this promising high end market
We own the land where to raise the Palazzo and a very well trained, hence keeping our costs in moderate figures.
We have significant experience in the organization of exclusive events and the mother firm will provide extra training for the butler service.
Our chain-branded name is already well known to the markets in question. Royal guests have already enjoyed our hospitality in previous years. Especially for the Russian tourist market we cooperate with A.A. the major tour operator that distributes Russian tourists to Corfu.
Our firm is going to make good use of its strengths to create new opportunities in the marketing of the new project. In fact we have already got in contact with A.A. concerning the project, and they have promised in writing to make a reservation of 6 weeks on behalf of a Russian businessman and his family next June. The project, as the company that is going to undertake its development has assured us, is going to be ready before Easter holidays. These facts give us the safety net we need for the start-up of this promising project.
Other steps that we are taking in terms of marketing are its presentation in the upcoming Xenia Exhibition in Athens and in London next month and its promotion on our website, which is also to be translated in Russian and cooperate with all major online booking sites.

4. SOURCE AND USE OF FUNDS

40% Internal Equity Required 120,000€
60% Loan Required 180,000€

Funding will be used for the construction, decoration and start-up costs of the investment.
5. PHOTOGRAPHS AND RENDERINGS

Palazzo house plan

Palazzo Private Beach

Living Room
Master Bedroom

Master Bathroom

6. PROJECT BUDGET

Constructing Price 150,000 €
Furnishing & decorating Price 120,000€
Third – party Inspection Reports (Environmental, engineering and cost reports) 10,000€
Operating Funds (Start – up working capital) 20,000€
Total Cost 300,000€

7. QUALIFICATIONS OF THE PROJECT TEAM
Axiacon, architectural design and Construction Company with its professional team of construction management consultants is the contractor company that will undertake the design, building and maintenance services of the project.

Axiacon utilizes advanced technologies and innovative engineering techniques in order to offer superior security, comfort, safety and aesthetics while keeping the cost low. The voltage supervisors, the ground-fault protection throughout the property, as well as the alarm and fire detection networks offer the highest level of security.

The expertise, positive energy and technical input added by the workers increase the value of any project, making each work unique and individually exceptional. All the members of the team are scientifically qualified and have extensive experience in the construction of high standard buildings with the use of new technologies and eco-friendly materials.
The company’s head architect participated at the 4th Biennale of Young Greek Architects in 2004, at the Algorithmic Design Workshop of APOMECHANES in 2010 and more architectural competitions, while Axiacon has received the 1st prize for the Olympic Village for Winter Olympics SOCHI 2014.

8. INVESTMENT ANALYSIS

INCOME AND EXPENSE STATEMENT
3 YEAR PRO FORMA

Year 1
Year 2
Year 3
Season Occupancy in nights
30
40
50
Average Daily Rate
2,333
2,750
3,000

Revenues in €

Villa
70,000
110,000
150,000
Food & Beverage
10,000
15,000
20,000
Private Banquets, Parties Organization
20,000
25,000
30,000
TOTAL REVENUES (€)
100,000
150,000
200,000

Departmental expenses

Villa
2,500
2,500
2,500
Food & Beverage
1,500
2,000
2,000
Private Banquets, Parties Organization
500
500
500
Undistributed expenses

Marketing
2,000
1,500
1,000
Unallocated expenses
2,000
1,500
1,500
Fixed expenses in €

Depreciation
20,000
20,000
20,000
Interest payment
70,000
70,000
70,000
TOTAL EXPENSES (€)
98,500
98,000
97,500

*Since the new lodgings will work inside the existing hotels no extra budget for payroll and administrative costs is required.

The projected financial data presented in this plan is based on the company’s financial statements taking under consideration the socio economic situation in the local market as well as the tendencies in competitive markets. Room revenue for the first year derives from the number of pre-bookings, and on an anticipated increase in arrival levels in the upcoming years based on the researched growth of the targeted tourist market. Expenses for marketing are going to decrease in the next years since the new villa will already be known to the large tourism agencies, responsible for bringing the upper level guests we aim at. Hence the word of mouth is expected to be the major marketing tool after the first year of operation.
Cash flows are estimated at 150,000€ pro year. With a 7% required rate of return the company’s value based on the calculation of the NPV of the project is expected to increase by 85,500€. Therefore we are certain that it is a low risk project proposal that guarantees earnings and viability and that it presents the company not only a good opportunity for financial gain, but also and even more significantly the opportunity to take the lead on a still new yet promising high end tourist market.