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PROJECT FEASIBILITY STUDY 4 Star Resort - ( mid range market ) www.maldivesmyway.com
P R O J E C T F E A S I B I L I T Y S T U D Y
4 S t a r R e s o r t - ( m i d r a n g e m a r k e t )
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Distance from Ibrahim Nasir International Airport : 130KM (north)Transport: 4hrs by Speedboat from Airport35mins by Seaplane from Airport
L o c a t i o n
A r i e l v i e w o f t h e i s l a n d
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MAJOR TOURISM INDICATORS
Total number of arrivals in 2010: ............................ 791,917 (record figure)
% Change over 2009: ........................................... 20.7%
Demographics
Gender
Male ...................................................................... 393,207
Female ................................................................... 398,710
Age
Children (0‐14yrs) ................................................. 4%
Youngsters (15‐24yrs) ........................................... 4%
Economically Active (25‐44yrs) ............................. 41%
Middle Aged (45‐64yrs) ........................................ 45%
Year
Tourist
2005
395320
2006
601923
2007
TOURIST ARRIVALS
T O U R I S M S T A T I S T I C S
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T O U R I S M S T A T I S T I C S
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R e s o r t C o n c e p t
A r i e l V e w
This is an idea only not actual drawings
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R o o m C o n c e p t I d e a - 1
O v e r W a t e r B u n g a l o w
Number of rooms : 30 rooms Area : 70 Sqm Turnkey cost : 500,000.00 US$ per room
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R o o m C o n c e p t I d e a - 2
B e a c h f r o n t B u n g a l o w
Number of rooms : 70 roomsArea : 60 Sqm Turnkey cost : 275,000.00 US$ per room
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P i c t u r e s
B e a c h , V e g e t a t i o n , S e awww.maldivesmyway.com
ASSUMPTIONSBasic
1. Required Capital US$ 43 million to build 4 star standard resort
2. Pay back period in 10 years assumed with a reasonable cash flow
3. Acquisition Fee of the island US$ 6 million USD 4. Construction value US$ 42.9 Million to build a 4 star resort with the exsisting facilities which there like, Power House,
Water Plant, Antena and Staff quarter
5. We need running capital and concept marketing US$1,000,000.00 ( for the construction period )
6. Operational Expenses, Admin, Marketing and Financial expenses assumed total average 43% in the project.
7. We pay total interest 17 million dollars with an interest rate of 6.5 % per annum within 10 years
8. We have included 5% for duly diligence in P&L for the others & admin expenses.
9.Room rate Water bungalow is priced on Dbl US$1190.00 and Deluxe rooms US$ 69.00, which is lower than the resorts of
this range, and will gradually increase year by year.
10. IRR of the investment 84% and the Profit return on Investment is 15%
11. Gross income in 10 years US$ 82,937,351.65 and after repay back the loan amount and after deducting operative
administrative marketing, maintance expenses, we make a net profit of US$ 35.9 Million within ten years.
12. Even the first year shows a loss of 7841 $ the cash flow seems to be healthy for the operation of this 4 star resort.
13. We have made Occupany at average of 67.5% to run the Resort hotel compare to the national average occupancy is 72%
NOTE:
Departmental expenses are estimated based on departmental revenues and using industry norms under international
conditions.
** TGST 15% is not included in the Room Rates
CONCLUSION
Forecast profit & Loss account projects a 15% as profit after depreciation in 10 years. We make a profit of US$35.9 million
gross profit in ten years before loan pay back. We should pay the loan within 10 years in order to sustain the cash flow of
the resort operation. Therefor based on the results subject to the assumptions made on the project appears to be
financially viable and simple investments pay back period is 10 years. The room rates are made taking in a moderate
demade of the market standard room rates.
STATEMENT OF LIMITING CONDITIONS
All assumptions made in order to appraise this project were based on information obtained from past experience and
figures that are justified projected figures in the resort business and its revenue.
E s t i m a t e d C a s h f l o w c h a r t - 1 0 Y e a r s
YEAR
(FIGURES IN USD) REF YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10
NUMBER OF ROOMS 100 100 100 100 100 100 100 100 100 100
AVERAGE OCCUPANCY 55% 68% 70% 70% 70% 70% 70% 70% 70% 70%
REVENUE:
ROOMS NOTE 1 14,290,940 95% 17,905,252 95% 23,585,074 96% 23,585,074 95% 23,585,074 95% 25,534,793 96% 25,943,582 96% 25,943,582 96% 28,537,940 96% 28,537,940 96%
FOOD & BEVERAGE NOTE 2 441,204 3% 553,103 3% 670,656 3% 690,775 3% 690,775 3% 690,775 3% 711,499 3% 711,499 3% 711,499 2% 732,844 2%
TELEPHONE INCOME NOTE 3 11,765
0% 15,085
0% 18,291
0% 18,291
0% 18,291
0% 18,291
0% 18,291
0% 18,291
0% 18,291
0% 18,291
0%
RENTALS & OTHER INCOMES NOTE 4 348,262 2% 386,315 2% 405,685 2% 405,685 2% 405,685 2% 441,685 2% 441,685 2% 441,685 2% 459,685 2% 459,685 2%
TOTAL REVENUE 15,092,171100% 18,859,755 100% 24,679,705 100% 24,699,825 100% 24,699,825 100% 26,685,544 100% 27,115,056 100% 27,115,056100% 29,727,414 100% 29,748,759 100%
DEPARTMENTAL EXPENSES
ROOMS 2,858,188
20% 3,581,050
20% 5,188,716
22% 5,188,716
22% 5,896,269
25% 6,383,698
25% 6,485,895
25% 6,485,895
25% 7,134,485
25% 7,134,485
25%
FOOD & BEVERAGE 176,481
40% 221,241
40% 268,262
40% 276,310
40% 276,310
40% 276,310
40% 284,599
40% 284,599
40% 284,599
40% 293,137
40%
TELEPHONE 6,471
55% 8,297
55% 10,060
55% 10,060
55% 10,060
55% 10,060
55% 10,060
55% 10,060
55% 10,060
55% 10,060
55%
TOTAL 3,041,141
3,810,588
5,467,038
5,475,086
6,182,639
6,670,068
6,780,555
6,780,555
7,429,144
7,437,682
TOTAL OPERATING INCOME 12,051,031 80% 15,049,167 80% 19,212,667 78% 19,224,739 78% 18,517,18675% 20,015,476 75% 20,334,501 75% 20,334,501 75% 22,298,269 75% 22,311,076 75%
UNDISTRIBUTED EXPENSES:
ADMIN & GENERAL 1,509,217
10% 1,885,976
10% 2,467,971
10% 2,469,982
10% 2,469,982
10% 2,668,554
10% 2,711,506
10% 2,711,506
10% 2,972,741
10% 2,974,876
10%
MARKETING 422,581
2.8% 528,073
2.8% 691,032
2.8% 691,595
2.8% 691,595
2.8% 747,195
2.8% 759,222
2.8% 759,222
2.8% 832,368
2.8% 832,965
2.8%
PROPERTY OPERATION MAINTANCE 377,304
2.5% 471,494
2.5% 616,993
2.5% 617,496
2.5% 617,496
2.5% 667,139
2.5% 677,876
2.5% 677,876
2.5% 743,185
2.5% 743,719
2.5%
ENERGY COST 603,687
4.0% 754,390
4.0% 987,188
4.0% 987,993
4.0% 987,993
4.0% 1,067,422
4.0% 1,084,602
4.0% 1,084,602
4.0% 1,189,097
4.0% 1,189,950
4.0%
TOTAL 2,912,789
19% 3,639,933
19% 4,763,183
19% 4,767,066
19% 4,767,066
19% 5,150,310
19% 5,233,206
19% 5,233,206
19% 5,737,391
19% 5,741,510
19%
TGST - GOVERNMENT TAX 2,263,825.69
15% 2,828,963.29
15% 3,701,955.78
15% 3,704,973.73
15% 3,704,973.73
15% 4,002,831.59
15% 4,067,258.33
15% 4,067,258.33
15% 4,459,112.06
15% 4,462,313.80
15%
BED TAX 267,358
342,325
413,753
413,753
413,753
413,753
413,753
413,753
413,753
413,753
EARNINGS BEFORE FIXED CHARGES 6,607,058
55% 8,237,946
55% 10,333,775
10,338,945
9,631,393
10,448,581
10,620,283
10,620,283
11,688,013
11,693,499
39%
FIXED CHARGES
RENT SCHEDULE 4.8 520,000
3% 520,000
3% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2%
TOTAL 520,000
3% 520,000
3% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2% 520,000
2%
EARNINGS BEFORE DEPRECATION 6,087,058
40% 7,717,946
41% 9,813,775
40% 9,818,945
40% 9,111,393
37% 9,928,581
37% 10,100,283
37% 10,100,283
37% 11,168,013
38% 11,173,499
38%
DEPRECATIONS 913,059
15% 926,154
12% 686,964
7% 687,326
7% 546,684
6% 595,715
6% 606,017
6% 606,017
6% 670,081
6% 670,410
6%
NET EARNINGS 5,173,999
34% 6,791,793
36% 9,126,810
37% 9,131,619
37% 8,564,709
35% 9,332,866
35% 9,494,266
35% 9,494,266
35% 10,497,932
35% 10,503,089
35%
BALANCE BROUGHT FORWARD 0 6,791,793
15,918,603
25,050,222
33,614,932
42,947,797
52,442,064
61,936,330
72,434,263
82,937,352
CASH FLOW SHEET
EARNINGS BEFORE DEPECIAYION 6,087,058 7,717,946 9,813,775 9,818,945 9,111,393 9,928,581 10,100,283 10,100,283 11,168,013 11,173,499 DISCOUNT FACTOR 10% 6,087 7,718 9,814 9,819 9,111 9,929 10,100 10,100 11,168 11,173
DISCOUNTED CASH FLOW 6,080,971
7,710,228
9,803,961
9,809,126
9,102,282
9,918,652
10,090,183
10,090,183
11,156,845
11,162,325
ACCUMULATED DCF 6,080,971
7,702,387
10,696,792
13,975,618
16,826,856
20,494,464
24,612,860
29,010,512
34,754,082
40,782,388
Running Capital 1,000,000
LOAN Installment with 6.5% InterestNOTE 4.7 7,088,813
6,809,556
6,530,300
6,251,044
6,251,044
5,971,788
5,692,531
5,413,275
5,134,019
4,854,763
ACCUMULATED CLF (7,841) 892,831 4,166,492 7,724,574 10,575,812 14,522,677 18,920,329 23,597,237 29,620,063 35,927,626
REQUIRED FINANCE FOR THE PROJECT RATIOS
CAPITAL $6,000,000.00 1,000,000.00 84% IRR
Purchase Value Const. Value Total cost Running Capital15% PR
Earning in 10yrs bfr Loan payment 82,937,351.65
Cash Flow end of 10th year aftr loan 35,927,625.94
RENT SCHEDULE 4.8
RENT PER YEAR $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00 $520,000.00
520,000.00
CONSTRUCTION COST
Constructions Cost 6+ Star.
Water Suite 30 500,000.00
15000000
Deluxe Suite 70 275,000.00
19250000
Total Rooms 100
Duly duligence 5% 1,712,500.00$
Total Cost
$35,962,500.00 $42,962,500.00
34,250,000.00
35,962,500.00
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