Destination Managementjnursyamsi.staff.gunadarma.ac.id/Downloads/files/9270/The+feasibili… ·...

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Destination Management

Lecture 3

University of Applied Sciences StralsundLeisure and Tourism Management

WS 2006/2007

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Part Two

Explores the issues involved in the developmentof new attractions, including feasibility studies,

financing design and project management.

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Types of development

• New purpose-built attractions on “Greenfield” sites- Tropical Islands Dome (former Cargo Lifter)

• New purpose-built attractions on existing attraction sites- reanimation of closed attractions

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• Major new developments at existing attractions- major new rides at a theme park

• New developments to improve visitor facilities (services)- new retail outlets, themed catering, on-site transport

• Creation of new events or staging of “moving” events- Olympic Games, Expo (World Exposition),

Part Two \ Development process

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Motivation for development

• Public sector- conserve heritage, provide leisure facilities, education, improve image of country/area, economic development, gain political advantage

• Private sector- diversifying product portfolio, increasing market share, new targeted markets, boost profit

• Voluntary sector- mainly conservation and education

Part Two \ Development process

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The Feasibility Study

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Case Study „Rio Nuevo“

Objectives:

Content:

Part Two \ Development process \ Feasibility study

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The feasibility study

• The term encompasses a wide range of studies that differ somewhat in respect of their purpose and content

• Main objective is to test the potential viability of a proposed project

• It is a systematic, logical and neutral tool for rational decision-making

• BUT: in some cases it is designed to legitimize a decision that has already been taken


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Feasibility study objectives

• Assessing financial viability• Clarifying and refining the original concept• Forecasting the likely nature of size of targeted market• Providing support for applications for finance• Helping to find the optimum site• Supporting planning • Attracting potential sponsors, franchisees, …• Analysing operational issues such as labour availability• Identifying sources of potential financial assistence• Providing useful marketing information


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Additional objectives

• Assist in selling a site or venture;• Assist in obtaining government approval

- Local and State;• Gain support from State or Federal Government;• Provide basis for business and marketing plans;• Ensure sufficient time and resources are committed to

ensure success.• Obtain approvals, permits, licenses, …

- environment


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What must be addressed by the analysis?

• Is there an existing or potential market for the project?

• If so, what is the likely level of demand?• Can the project generate sufficient revenue to

achieve commercial viability?

• IS THE PROJECT FEASIBLE?


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Successful Tourism Project

• A successful tourism project is one that:• Will attract sufficient customers to be financially,

or commercially viable;• Is environmentally sustainable;• Is capable of obtaining all necessary approvals –

permits, licences etc.;• Can be built, or developed at the proposed

costs.

• = Preconditions to GO AHEAD


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Scope of the Analysis

• Depends on various factors:

• End-user requirements;

• Location;

• Type and size of project;

• The project components.


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Feasibility Study Stages

• Preliminary concept• Rough costings • Market feasibility study• Revise concept• Identify location and site• Revise costings• Visitor number and spending projections• Financial evaluation• Identify sources • Impact studies• Sensitivity analysis


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Feasibility study contents

• The market study

• Who will visit the attraction?- domestic and foreign holidaymakers, day trippers, School and college groups, local residents- age, sex, class, stage in family life-cycle

• How many people will visit the attraction?- population of catchment area, number of holidaymakers visiting the area, competitors targeting the same market segments

• Where they will come from?- catchment area

• When will the visitors come?- degree of seasonality affects staffing, attraction capacity and cash flow management


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• Site selection criteria

• Proximity to major centres of population• Transport networks and their reliability• Existence of other attractions in the area• Socio-economic profile of the catchment area• Availability of suppliers/services• Amount, type, quality and costs of land• Regulations on the use of land• The climate• Availability of qualified labour at acceptable costs• Public sector financial assistance and ‘help in kind’• Attitude of local community towards planned project• …


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• Financial viability

• based on calculation of COSTS and REVENUES• Depending on the type of organization viability means

to produce a profit or surplus on running costs• Cashflow management• Break-even analysis

Break-even point

Number of visits

Cos

ts

0

Profit

Variable costs

Fixed Costs


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Who should undertake the feasibility study ?

DisadvantagesAdvantages

• Less understanding of the organization‘s aims and objectives• High financial costs• Can simply put forward ideas used elsewhere that are not relevant to the current project

• Objective• Expertise of specialist staff• Can use experience gained

from other projects• Can be quick in that dedicated staff time is given to the project

Consultants

• Lack objectivity• High time costs• Can be restricted by attitudes and prejudices.• Can be slow as not the only job staff has to do

• Understand the organization‘s aims and objectives• Low financial costs

In-house


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Wenzel Consulting (No Product Placement !!!)

Please visit: http://www.wenzel-consulting.de

http://www.wenzel-consulting.de/eng/

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Sourcing Information and Data

• Process starts with 3 Questions:• What type of venture is being considered?• What factors affect the project?• What information is needed relative to the

development of the project and identification of likely demand?

• Need to determine the sources of the information.

• Need to ensure that you have sourced and are using the right information!!


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Types of Research

• Quantitative Research• Provides historical data on visitor numbers,

occupancy levels, travel type, accommodation type used, length of stay, etc.

• Qualitative Research• Addresses issues such as consumer travel

motivators, decision making, attitudes, needs and expectations, levels of satisfaction, etc.

• Both may be sourced directly or indirectly i.e. Primary or Secondary data.

• Growth trends may be projected and can be used as a basis for projections.


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Primary Data

• Data obtained specifically for the project itself and may include surveys, interviews, observations, focus groups,

• May be sourced in the following way:• Inspection of the site;• Observation of locality and region;• Visitor surveys, written or verbal questionnaires;• Telephone or mail surveys;• Interviews with operators & industry representatives; • Visiting competitors product;• Consultants report;• Statistical analysis.


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Primary Data cont.

• Number of issues to be considered when collecting primary data including:

• Personal or other bias;

• Relevancy of questionnaire;

• Validity and reliability of survey;

• Cost of research, both financial and time.


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Secondary Data

• Comprises all published and readily available information gathered previously.• Large amount of data available; • Is easily accessed;• Is far less expensive than primary data.

• Limitations:• Information can be out of date;• Validity of the data, sources, methods;• Gathered for a different purpose.


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Where to Source Information cont.

• Main Research Programs:

- Public sector

e.g. Federal and Regional Statistical Offices

- Privat / Voluntary

e.g. OSGV – Touristim Statistics


http://www.statistik-mv.de/

http://www.s-tourismusbarometer.de/



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Where to Source Information

• IMPORTANT NOTE:

• Always make sure that the information or data that you are using can be substantiated;

• Use accurate projections not marketing targets or “guestimates”.


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• “Gäste in MV” [Guests in Mecklenburg Vorpommern]

beside official figures from statistical office and FUR-study one of the most important source for secondary studies for tourism branch in Mecklenburg Vorpommern

• Provides decision-makers with detailed figures about the size, structure and development of the market of holiday makers in the region

• Carried out in co-operation with the University of Applied Sciences Stralsund

Secondary market research – market study

Part Two \ Development process \ feasibility studies

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• Market structure regarding:

- origin (country, federal state)- travel purpose, and benefits sought- duration of stay- suggestion to travel from- way and place of travel organization- means of transportation- type of ~ and expenditures for accommodation- amount of daily expenditures- companions- age, income- influence of cultural aspects of destination- degree of satisfaction



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11.02.1Internet

8.19.66.6Newspaper and journals (no ad)8.68.87.0Official travel brochures (tourism boards)8.710.613.6Travel guides (book)

1.53.74.4Consultation at travel agency1.01.11.7Travel fair

13.68.67.1TV, radio (no ad)35.842.841.4Relatives and friends62.453.356.9Earlier visits

2.8Hotel brochures and flyers3.56.54.7Tour operator brochures4.24.46.4Newspaper (no ad)

200319991997Guests totalSuggestion to travel from


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Our typical tourist

- is 43.6 years old- 1,743.50 € net income- accompanied by partner- travels without children- travels by car- travels regularily- by half from eastern and western Germany- is a regular customer- seeks a beach, nature and relaxation- stays in a hotel for 9 days- spents 45 € for the room and 20 € a day

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