Feasibility study

Feasibility studies are a standard component in the preplanning of hotel and tourism projects. They involve the collection and analysis of data intended to provide stakeholders with objective and independent perspectives on development opportunities. Unlike appraisals and valuations which usually only estimate an existing property’s market value, feasibility studies determine potential profitability of a proposed project and present strategies to maximize its profitability.

Feasibility studies are often a valuable tool due to the complex and expensive process of property development and the involvement of multiple stakeholders who often have unique and conflicting objectives (Currie et al. 2009). Investors, operators, government bodies, regulators, lenders, and consultants, for example, often use different criteria to evaluate a project’s potential and thus may advocate projects which are unlikely to satisfy the other parties’ requirements. To minimize subjectivity, feasibility...