Introduction
The main aim of this assessment is to focus upon the development of 15 days Cruise itinerary from Singapore of Dubai. In context to engage into the planning, the feasibility analysis of the project has been carried out with the important planning stages and the recommendations have also been provided to resolve any issue in the Cruise Itinerary project. The feasibility and planning for the Cruise Itinerary is basically bring out for the Oriental Resort Hotel in Japan.
The identity and qualities that distinguish potential customers and therefore are the perfect solution for standing out and rethinking again rely on the tourism and the hotel industry alone. You have plenty to do with what you want your hotel to be and for how you are the best client in the travel and hotel industry. The rebranding of the travel and hotel industries is not about a superficial shift of established systems, and the style and practice must be reclassified. In addition, the best technique begins also by listing a good interior designer, essential for branding your picture and making the image and correspondence of your hotel special.
Background
Oriental Resort Hotel is one of the leading travel and tourism service providers in the Japan and it is offering the adorable quality services along with fulfilling the expectations of its valuable customers. On the other hand, the feasibility and planning process has been assessed with respect to the cruise itinerary service for 15 days with respect to The Oriental Resort Hotel.
Feasibility analysis
The feasibility test will allow you to analyze the planned resort and see if a viable and successful business model would be feasible. A feasibility analysis decides whether planned hotel construction is commercially viable and if, when the project is finished and operational, the profitability of the proposed project meets or exceeds the production costs (Hein, 2019). To order to assess the worth of the new project against its projected construction expenses, the hotel feasibility report must evaluate the sales, expenditures and net profits. The feasibility analysis is as follows for the cruise itinerary for the Oriental Resort Hotel in Japan.
Area, Demographic, and Neighbourhood Analysis: The Oriental Resort Hotel cruise is entitled to establish at the Japan location so the feasibility of business model will be examined with relation to the geographical, demographic, neighbourhood analysis around the hotel. In context to this, the population of Japan is reported as 12.65 crores in the year 2018 but the trend is showing in increased graph trend since last 1980 with the growth rate of -0.2% from the year 2012. On the other hand, the income of households is increasing and in this market different race or ethnicity households are living (Jeon, 2019). Furthermore, the largest corporations are operating in the Japan market as Toyota Motor Corporation, SoftBank Group, Mitsubishi UFJ Financial Group. ippon Telegraph and Telephone, Sony Corporation, and Honda Motor Company so on. So, there is good environment for generating the income from the highly revenue generating corporations. With this, there are lots of tourist attraction points such as Mount Fuji, Kinkaku-ji, Fushimi Inari Taisha, Imperial Tokyo, Historic Kyoto, The Island Shrine of Itsukushima and Chūbu-Sangaku National Park and the Japanese Alps so on.
In context to this, the rail, road and the personal transportations system are allowed to go for the cruise itinerary at these places. In context to the neighbourhood analysis, the Japan is the best location for establishing the hotel in the market because the location is highly supportive from all the ways of transport. At the same time, there are several hotels occupies with the staying of travellers in the Japan amanemu, ise-shima national park, aman tokyo, the ritz-carlton kyoto, andaz tokyo toranomon hills. st regis osaka, and park hyatt Tokyo.
Site Review: At the North side Japan, there is enough space a territory where it easily supports to the planned hotel. On the other hand, there is also room for the future expansion. Once one of the biggest hotels in Japan, the abandoned Oriental Resort Hotel in the island of Hachijojima. The island of Hachijojima is suitable for a short ride from Tokyo. The volcanic island from Haneda Airport takes just 55 minutes by rail. Extend your trip to Tokyo, just 55 minutes away from Tokyo. It has a swept form and is composed primarily of two major volcanic mountains: Mount Hachijo Fuji, located in the west of the Gourd, and Mount Mihaara in the east. Tokyo is the second-largest island on the islands. The island is covered by the Kuroshio Current (Black Tide) and has a dry and diverse atmosphere. There are several endemic species of animals and natural monuments, because of the island’s nature and the environment (Kastarlak, 2011).
Proposed Development Recommendation Cost: The cost is an important aspect for the functioning of hotel and cruise itinerary in the Hachijojima Island. The cost planning for cruise itinerary is as follows
Initial there is no architecture plan at the location so the architecture plan will be introduced for the physical development of the cruise. The cruise is going to offer the 100 rooms in its ship for the travellers. On the other hand, there will be proper facilities for the food and beverages with the excellent quality and the menu will be decided as per the preferences for the customers (London, 2014). On the other hand, the travellers will get different food for three times in a day and they will also be offered with the desired facilities for their entertainment. Moreover, at the initial level, the hotel will be with the independent property but after a year it will develop its business through the franchisee so that it can explore its business activities.
Market Analysis, occupancy and ADR
There is a fierce competition in the Japan market because there are around more than 82,000 hotels is there and all of these are offering excellent an innovative services to its travellers. Bu my hotel has performed in a significant manner because the occupancy rate is higher by 50% as compare to the other competitors in the perspective market. On the other hand, the average daily rate is set for the new visitors as $5500 and it $6000 for existing visitors along with offering the vibrant services for the already visited people. So it will be significant benefits for the existing customers. Further, in the Japan market, there are approximate 82,000 hotels in which there were registered hotels in the year 2017. But in the near future, there are lots of chances to open the hotels by 1500 in upcoming 3 years as the increasing number of travellers in Japan (Muangasame, 2013). According to the Japan Tourist Board, the overall demand for room nights rose 5.6 percent over the year from January to September 2015 given the low volume of arrivals. Revenues from tourism stood at stable 23, 8 billion dollars of Japan ($16, 9 billion) compared to the previous year, suggesting that tourists lived longer and were spending more during their visits. As at September 2015, around 11.4 million available room nights were registered in the Japan Tourism Board, an increase of 6.5 percent over 2014. Over the projections, the rate of hotel room occupancy will be 75% for the next 2 years and the average daily rate will be the $5000 so that more number of visitors can visit the cruise hotel.
Financial Analysis with the feasibility evaluation
As per the review of market performance, it is expected to generate the gross revenue by $8000000 and it will bring the net profit by $1500000 in its first 4 years of project development. Furthermore, there will be significant amount of expenses in the different departments like marketing, finance, human resources and mostly in its operational department, the project costing is as $800000 for each department.
Discounted cash flow is as follows
| Year | Net Cash Flow ($) | PCV Factor at 10% | Discounted Cash Inflows ($) |
| 1 | 5000000 | 0.909 | 4545454.55 |
| 2 | 5500000 | 0.826 | 4545454.55 |
| 3 | 5300000 | 0.751 | 3981968.44 |
| 4 | 7600000 | 0.683 | 5190902.26 |
| 5 | 7100000 | 0.621 | 4408541.39 |
| 6 | 8200000 | 0.564 | 4628686.23 |
| 7 | 8800000 | 0.513 | 4515791.44 |
| 8 | 7800000 | 0.467 | 3638757.57 |
| 9 | 9200000 | 0.424 | 3901698.09 |
| 10 | 9500000 | 0.386 | 3662661.25 |
| Total Present Value of Cash Inflows from Project | 43019915.76 |
Comparison of Value Created to Project Cost
From the above presented discounted cash flow, the hotel project has generated the net value for the operation as $43019915.76 at the end of 10 years and it will be better for the future business development.
Part 2: Planning Cruise Itinerary from Singapore to Dubai:
Dubai is one of the most beautiful places of the United Arab Emirates, as a multicultural city where you will discover all that you would want to see in this amazing edge city. The city will take you through the world-class shopping and extravagant approaches to walk around Dubai. The cruise from Singapore is full of amazing sights to look forward to and numerous yachts and tall structures on the sandy sea shore.
The beautiful Kite Beach or Sunset Beach or the lodging Burj Al Arab or Souk Madinat Jumeirah town, pass Arabian-style inns, Al Fahad led neighbourhood, Al Farhadi Historical District, and the feel of the 1960s is everything to look forward to. The beautiful walks or a visit to the Dubai Museum, and the beautifully established existing structure in Dubai are the best places to visit (Tham, 2019). Ethereal perspectives on the city from the highest point of the Burj Khalifa are equally fascinating.
Planning and Itinerary:
SECTION 2: Planning for a Cruise Itinerary (water based resort)
Itinerary:
2.1 Element for cruise planning
What are the essential elements that are required for planning a cruise itinerary?
| Essential Element | Remarks |
| Name and address of each passenger | It is needed for the identity purpose because any kind of issue can be resolved in easy manner. |
| Pricing | The pricing should be declared before the trip so that the more number of travelers can be attracted (Ward, 2015) |
| Destination | It is also an important element that should be considered while planning the cruise itinerary |
| Cheap availability of fuel | Fuel prices are very important so the lower price of fuel should be considered for significant planning |
| Entrainment and other resources planning | The planning of resources is very important for the cruise planning because lack of resources may affect the planning in an adverse manner. |
2.2 Choice of destination
What are some of the factors Cruise operations decide to choose a destination for a cruise itinerary?
| Factors | Remarks |
| Exclusivity | Cruising is considered a social grouping domain for the rich and elitist |
| Demand | The demand factor is important in the perspective market |
| Capacity | It can also affect the |
| Speed | The velocity in knots is measured. 1 nautical mile per hour equals 1 node. A coastal mile is theIt corresponds to 1,852 meters or 1, 15 miles of dirt. |
| Human risk by crew | It is also important for the planning of operations of cruise |
2.3 Port of call
What are some of the considerations when Cruise operations decide to choose a port of call for a cruise itinerary?
| Port of call | Remarks |
| Timing for port of call | Pre –planning for the port of call can support to successful and enjoying journey without any risk |
| Resource requirement for short –time stoppage | Management of resources are also crucial for the cruise planning to not to waste the time |
| Service orientation | It should be service oriented so that can be supported from the passengers as well, their entertainment should not be disturbed (Zaidan, 2016) |
| Including land activities | Short –time stoppage can also be entertaining for the passengers |
2.4Tendering
Why is tendering important to cruise itinerary planning?
| Reasons | Remarks |
| Value for money | In the client’s opinion, tenders give the best benefit for the money expended. That is how consumers will select the highest performing good or service at the lowest price point from a wide pool of possible suppliers (Tham, 2019) |
| Encourages Competition | The tendering process helps promote a market that is competitive. |
| Easier Entry | It also helps to promote the new service provider in the cruise industry |
| No favoritism | The best one and suitable is chosen |
| Compliance and transparency | It will also be important in terms of increasing the transparency and compliance to offer the service |
2.5 Market research
How does market research impact the planning of cruise itinerary?
| Impacts | Remarks |
| Supportive decision –making | Market research can support to such a successful planning for the effective decision-making for cruise itinerary |
| Socio-economic changes | The changing preferences can easily be identified through the market research and lead to valuable planning |
| Potential new partners and suppliers | Market research can also determine the perspective competition in the market |
| Recognizing business opportunities | The cruise planning can also be improved through the market research (Tham, 2019) |
| Keep track of the competition | Market research can easily determine the market competition and can also enable for better planning. |
Recommendations
1 Keep it elegant, classy, yet contemporary
Redesigning the Oriental Resort Hotel will be an extraordinary planning of the property and will stand apart with the meaning of the idea, and shall need an entire force of ideas to be incorporated. These variables must be completely considered by the designers executed at Oriental Resort Hotel. Oriental Resort Hotel will always have a royal touch to it, so concentrating on royally motivated embellishing components that allude to the royal idea for the architecture. Oriental Resort Hotel should speak of these components that can reach out in the books of royal hotels.
2 Execute a good plan for finances that will not fall apart:
Set up a task execution plan for Oriental Resort hotel rebranding and spending plan, and development process. The spending plan characterizes the accomplishment of a hotel redesign and the whole execution process. The general spending plan can improve the executives and provide finances and cash that would fortify both the lodging idea and the needed productivity. For instance, the accentuation is set on the voyagers’ understanding and it is also dependent on the manners in which the explorers are fascinated with. The remodel financial plan of Oriental Resort hotel can improve arrangements as most plans are specially made at the last moment and will require last minute cash. Having the correct financial plan can accomplish conveyances and influence the task’s predictable completion. And the remodel plans, while you will need more data. Having a planned financial policy always does wonders.
Conclusion
Planning a trip or an itinerary is not an easy task and the effort that goes into it is unbeatable. Hospitality industry stands tall on the establishment of 25% of the world population working under it and hence adds largely to the world’s economy. The tourism and hotel industry also face equal challenges and thus as this report suggests, whether it is rebranding a hotel or planning a trip into the tourism industry, the work and effort that goes into it equally requires a lot of diligence. This report helped in understanding of the planning, implementation, feasibility planning involved in the tourism sector.
Bibliography
Hein, C.(2019). (Wiley Interdisciplinary Reviews:). Port cities and urban waterfronts: How localized planning ignores water as a connector.
Jeon, J. D. (2019). Cruise port centrality and spatial patterns of cruise shipping in the Asian market.
Kastarlak, B. a. (2011). Fundamentals of planning and developing tourism.
London, W. a. (2014). Power in the context of cruise destination stakeholders’ interrelationships.
Muangasame, K. a. (2013). Enhancing Tourism Competitiveness of Hong Kong via Tourism Planning: A Comparative Case Study between Hong Kong and Singapore.
Tham, A. (2019). Envisioning Eden: the manufactured ecotourism environment of Singapore.
Ward, D. (2015). Berlitz Cruising & Cruise Ships 2016.
Zaidan, E. (2016). Tourism shopping and new urban entertainment: A case study of Dubai.
Feasibility analysis and planning of resort
Abstract
Lately, the quantity of sightseer’s or tourists has grown rapidly in the southern area of Japan, and with this expansion in travellers, there has been an increment in the number of hotels. In Tokyo, there is Hachijojima (or Hachijo Island) which is one of the gatherings of 7 volcanic islands in Pacific Ocean called the Izu Seven Islands (Izu Shichito).
At around 287 kilometres, from the principle island of Japan is where Hachijojima is situated at the end of 7 islands. With the population of about 8363 people, the 63 km² large volcanic island has exceptional nature with forests, mountains and beautiful view of the ocean. Situated in the south locale of Tokyo and Japan, travel industry and accommodation businesses are the main sources of income in the island. The Hachijo Royal Hotel which is situated in Hachijo-jima, an Izu island about 287 Kilometres south of Tokyo has been in ruins for over 10 years. It first opened its doors in 1963 and officially shut down in 2006. Before the final shut down they tried to rebrand in 2004 to Hachijo Oriental Resort.
The Hajicho Royal Hotel before closure
To confirm the viability of the proposed hotel redevelopment, an inspection of the site, market and financial returns for the investors needs to be done. A comparison of the new hotel against the existing competitors like lodgings, Airbnb or international hotels in the area will help the developer to make an inform decision. To analyse the hotel’s competitiveness, ability to generate revenue and income a feasibility analysis needs to be performed (HVS, 2011).
Introduction
Due to its affordable hotels, low living costs and general value for money, Japan is one of the favorite tourist destinations in the Asia-Pacific region. Japan’s hospitality sector has strong fundamental values notwithstanding the few challenges like natural calamities they have experienced. Minpaku regulated the industry competitiveness and high supply levels that could put unnecessary pressure. In 2018, Japan enjoyed an increase in tourists at 31.2 million, an increase of 8.7% year-on-year (YoY), overtaking the 30 million guest achievement unpredictably (Kodir, Karim & Paksi, 2019). Local tourist spending increased for the seventh sequential year, rising 2% to 4.5 trillion yen. These record figures were accomplished in spite natural disasters. Inbound tourism to Japan seems to have entered a period of stable development that could demonstrate growth even during economic slowdown.
As discussed in prior reports, the leading concern of hoteliers remains a high level of upcoming supply. Over the 2018-2020 period, Tokyo is projected to grow its room stock by 24.9%, while Greater Osaka and Okinawa are estimated to see upsurges of 23.0% and 19.4%, respectively (Shimamoto, 2019).
The supply to Tokyo and Osaka consists of limited-service hotels, while Okinawa will see a boom in the full-service and resort markets. This rapid growth is not shocking for some of Japan’s top tourist destinations, though other areas in the country are set to see a substantial growth of their hospitality industry as well (Rushmore, O’Neil & Rushmore Jr, 2012).
To be sure, developers have considered increasing tourism to remote areas and are reaching out to such markets.
Bearing in mind the challenges faced by the hotel industry in 2018, limited-service hotels held by J-REITs seem to have done fairly well. In 2H/2018, average daily rates (ADR) and revenue per available room (RevPAR) posted YoY growth of 0.5% and 0.3%, respectively, while occupancy held at around 88% (Kondo, 2019).
Lacklustre ADR growing may be moderately clarified by domestic demand. While arrival guests increased by 11.1% YoY, overall nights stayed, 83% of which is accounted for by local tourists remained flat. Local tourists normally pay fewer premiums for accommodation, which likely weighs on ADR’s growth for limited-service hotels. Further, some Local business tourists cannot afford room charges in low-priced hotels due to initial price increase caused by incoming demand.
Real Capital Analytics data estimates 287 billion yen of hotel transactions took place throughout Japan in 2018. While this marks a 3% reduction YoY for the industry, total real estate venture was down 30% equated to 2017, as inadequate opportunities moderated business volumes across most asset types.
The number of hotel rooms in Japan had increased to 138,286 in 2015, against 2010 where the number was 63,460. International tourists in japan increased from 24 million in 2014 to approximately 30 million in 2015, a 20 percent rise in overseas visitors. The growth is as a result of improved infrastructure including better roads, expansion of numerous of the Japan’s airports, allowing tourists access to multiple places in Japan, increasing choices for travelers to tour new tourist destinations. Japan’s satisfactory economy grants opportunities for new investors to develop new tourism destinations to meet the growing needs (Lau & Yip, 2020).
Disregarding the expansion in vacationers, financial analysts are worried that the hotel supply may exceed consumer demand. Hotels, restaurants, and airlines fixed stock supplies that need overseeing, especially in an unusual occasional demand. Hotel rooms, seats and meeting spaces are perishable inventories; if these rooms are not engaged, the hotel may be unable to generate revenue. Products have a degree of insubstantiality; production and usage are concurrent; and the charge structure inclines toward high fixed costs (Ohmura, Frisch, Lendemer & Nakanishi, 2016).
In Tokyo tourism and hospitality industries are growing rapidly with increased number of hotels and restaurants. According to the National Statistical, the number of hotels and guest houses (officially registered with the government) in the southern has risen from 550 in 2008 to 1,854 in 2013. The use rate of hotels in the southern region of Tokyo has grown from 40.29 percent in 2010 to 57.68 percent in 2015.
The proposed project is by the developer who wants to revive Hachijo Royal Hotel as Hachijo Oriental Resort which has been in ruins for over 10 years. Tourism industry is developing quickly in Hachijo; this tendency supports development of hotels, guest houses and motels to cater for the increasing tourist demands. Target customers for the hotel will be of all ages, but mostly will target middle class individuals, families and couples that have vast travel familiarity, and are eager to embrace new experiences by staying in local hotel. Guests will enjoy cultural experiences through interaction with local employees, local delicacies and facilitaties. The price rates for the guest rooms will be approximately $80-$130 USD (Ruengtaveesil, 2015).
The hotel will embrace local and tradition designs that are eye-catching to both local and international tourists. The goal for the projected hotel is that it should benefit both the owners and also be culturally beneficial and suitable to the nearby environment. It means that the hotel is to be designed in a contemporary Hachijo culture, with vegetation that covers the property, and attractive beautification. The architectural plan must abide by the law which regulates specific structure features such as structural heights, setbacks, roof appearance (such as color and style).
Project Objectives
The overall objective of this project is to conduct a feasibility study to determine whether it is viable to re-build a hotel that can be profitable. Specific objectives are as follows:
To complete a feasibility study which serves as a guideline on whether this particular hotel if re-built will be a success or not.
To construct a hotel that meets the demand of local and international tourists to appreciate island and its culture, and to create sustainable employment and income for locals.
To build a financial asset for the developer and owner of the property that is capable of generating reasonable income. Thus, the hotel will contribute to the generation of income for local businesses and Japan’s overall economy.
Overview of the Hotel Industry in japan
Tourism in japan is one of the main contributors to the nation’s economy. The number of visitors to Japan is still on the rise in spite of the growing concern regarding the political unrest in the country that damages image to ‘the land of smile’. Statistics show that international visitors in Japan are reaching approximately 30 million people annually.
For over a decade, Japan has had one of the biggest hotel room inventories among Asian countries with more than 300,000 guest rooms in lodging properties. Several of these properties are located on the beaches and on islands in southern Tokyo. Spending a holiday in bliss, surrounded by walls of palm trees, sandy beaches, and sun-soaking climate in a tropical-style resort has been an image that interests tourists to destinations in Asia-Pacific region such as Japan.
Local hotels are becoming prevalent with the growing curiosity from the new generation of travelers. Tourists now pursue a more intimate and private experience with the locals and their surroundings. Comparing to other forms of lodging properties, analyses found that local hotels are better in delivering various qualities, such as local culture services and relations and unique design. Further studies have discovered that the additional aesthetic impression of domestic hotels are that they are chic, hip and trendy, and were appealing to the upper and middle class.
Feasibility Study
A feasibility analysis is a crucial process in the preparation stage of development. Before any property development, the customers would seek services of a quantified assessor or assessment expert to conduct the market and financial feasibility analysis. For an actual evaluation of whether the proposed hotel project is viable, a feasibility study should be conducted (Donahue, 2011).
Area, Demographic, and Neighborhood Analysis
Hachijojima has beautiful scenery full of attractions, and it is not far from Tokyo because it only takes 45 mins by direct flight from Haneda Airport. Hachijojima Island can either be reached via airplane or ferry. To save time one can use Flights that operate 3 times daily from Haneda Airport, Tokyo. By ferry, it takes about 10 hours to Hachijojima Island; a large overnight ship leaves from Tokyo Takeshiba Ferry Port at 10:30PM every day. On the island public bus service is available but it’s unreliable, so it’s recommended for one to hire a car for flexibility purposes.
Some of the notable tourist destinations on the island include;
Nagono Tenbo: Situated 180m high in south of the island where clear view of the ocean, the mountain and the local fish port from the top.
Noboryu Toge: The viewpoint at the pass in middle-east part is where one can enjoy the view of north east part of the island with Hachijo Fuji Mountain and coast line
Nambara Senjojiki: This is a black lava plateau when Hachijo Fuji eruption formed. Hachijojima has a mountain named “Hachijo Fuji” where the highest peak of the island at 854 metres. The entrance of the mountain is 15 minutes’ drive from Hachijo Airport where one will need to climb up 1280 steps stairs to the peak. It could be hard for the first time but do not stop since one will get an amazing view.
One can enjoy several games like diving/ snorkeling since Hachijojima is surrounded by the ocean with crystal clear water and there are several beaches. Do not be disappointed because the sand there is not white because the clear waters ideal for surfing, diving, snorkeling and swimming with the wild turtles will give you an amazing experience. Also there are popular spots for fishing.
Hachijojima has many more fascinating destinations such as forests, waterfalls, river, natural hot springs and delicious local food. One can also explore some of rare wild species. A taste of local Ashitaba tree which is enjoyed as tea, noodles, and tempura are taken for medicinal purposes (Tokuda, Kawauchi, Kikuchi & Iwasaki, 2015).
“Shima Sushi” is must-try delicacy. It’s island traditional sushi which has quite different taste from usual sushi.
For alcohol lovers Shima Shochu is a must try which is produced in the island. It’s a very strong drink produced using the island’s special passion fruit (Liddicoat & McConachy, 2019).
Market Analysis
When forecasting demand, economic strong point of the market area is one of the essential considerations. The main purpose of the market analysis is to assess demographic and economic facts to determine the growth, stability or decline of a particular market. These factors will replicate on the variability of hotel demand. The forecast of room night demand of a subject hotel can be used to calculate the estimate annual occupancy (Lynn, 2011). Finally, the market analysis will also help in setting of the prices of services in the proposed hotel according to the market demand. Therefore, it is important to collect correct data that will back the assessment and forecasts for the project.
If performed properly, this analysis should avert major project failures and detect key opportunities. The owner and consultant should give proper and continuous attention to the analysis in the feasibility study due to its importance.
Findings
Site evaluation/ location
The proposed location for the hotel is the Hachijojima Island, the southern section of the Tokyo. Compared to other areas of Tokyo, the region has underdeveloped infrastructures by the government, which aims to resemble the old traditional and its exotic past. The composition of the area mainly consists of locals, schools, restaurants, temples, museums and historical buildings. Famous attractions include a large numbers of ancient temples.
The hotel will feature 40 guest rooms and have many facilities and amenities including a coffee shop, outdoor swimming pool, courtyard, and approximately ten parking spaces (Tsukui, Ichikawa & Kagatsume, 2017).
Access and visibility:
Hachijojima Island is effortlessly accessible by both local and international tourists. Local transport can organized via flights, buses and by ferry. Despite its massive land Hachijojima Island is relatively small since its geographical structure has many mountainous areas and preserved national forests. Nevertheless, transport within the island can be easily done by walking and local transportation (Shimauchi, Nambo & Kimura, 2019).
Surrounding development
Hachijojima Island is one of the most visited places in Tokyo due to its vast tourist fascinations and landmarks. It interests different groups of tourists around the world.
Temples, historical landmarks, museums, art galleries and local restaurants are some of the cultural destinations in the Island. For tourists who seek adventures and want to explore the natural beauty of Hachijojima Island the forests, zoos and outdoor activities destinations are available. Forests are naturally preserved and royal botanical gardens are considered to be the ideal attractions among tourists. To accommodate growing demands from tourists, Hachijojima Island and other outdoor exploration places have been undergoing significant face-lifts and expansion. Shopping destinations mainly include shopping malls and local shops including the recent shopping mall that opened in Southern Tokyo
Demand generators
The main market that the proposed hotel aims to capture is tourists with leisure purposes. These tourists include individuals, couples and families who seek new experiences and pursue relaxation, demands that Hachijojima Island is able to satisfy.
Competitive supply
According to an online travel agent website, there are nearly 500 hotels, guesthouses and other lodging facilities listed within Hachijojima Island area. The price ranges from 10 to 200 USD per room depending on the quality of the services offered and season. Competitors of the proposed hotel will be those with similar facilities, architectural designs, room rates, location and target audience. There are six hotels that provide similar services and facilities, located within 1 kilometer of proposed hotel with the price range of $80-$130 USD (Kojima and Takii, 2019).
Financial Analysis
Market hotel conditions an official report by Japan Tourism Agency contain data and evidence on the hotels in Hachijojima Island from 2015 to 2019. Historical market performance data demonstrates occupancy, average daily room rate (ADR) and Revenue per available room (RevPAR), as shown in Table 2. The statistics display the changes in supply and demand of Hachijojima Island’s market within the past several years.
| Year | Available Rooms | Occupied Rooms | Occupancy | Average Daily Rate | RevPAR |
| 2015 | 36,884 | 10,962 | 29.72% | $80.65 | $23.97 |
| 2016 | 30,587 | 12,256 | 40.07% | $85.03 | $34.32 |
| 2017 | 32,077 | 15,150 | 47.23% | $88.68 | $41.88 |
| 2018 | 32,948 | 20,490 | 62.19% | $91.83 | $57.11 |
| 2019 | 34,510 | 22,894 | 66.34% | $96.14 | $63.78 |
Market performance projections
The forecast of the occupancy and ADR of the competitive market was estimated and calculated from the past occupancy and ADR data attained, in addition to the influence of anticipating and continuing proceedings, and the development in hotel supply in the market.
Hotel market performance projections
| Year | Available Room | Occupied Room | Occupancy | ADR | RevPAR |
| 2020 | 49,137 | 33,196 | 67.56% | $105.05 | $70.97 |
| 2021 | 50,120 | 34,855 | 69.54% | $108.21 | $75.25 |
| 2022 | 51,122 | 36,598 | 71.59% | $111.45 | $79.79 |
| 2023 | 52,144 | 38,428 | 73.70% | $114.80 | $84.60 |
| 2024 | 52,144 | 38,428 | 73.70% | $118.24 | $87.14 |
Proposed hotel performance projections
The market performance forecast could then be used to make estimates on the financial performances of the proposed hotel. Features that should be included in the analysis are the location of the proposed property and the service quality that will be provided by the hotel.
Proposed hotel performance projections
| Year | Available Room | Occupied Room | Occupancy | ADR | RevPAR |
| 2020 | 14,600 | 10,301 | 70.56% | $103.00 | $72.67 |
| 2021 | 14,600 | 10,592 | 72.54% | $106.09 | $76.96 |
| 2022 | 14,600 | 10,890 | 74.59% | $109.27 | $81.51 |
| 2023 | 14,600 | 11,198 | 76.70% | $112.55 | $86.32 |
| 2024 | 14,600 | 11,198 | 76.70% | $115.93 | $88.92 |
Estimated revenues and expenses distribution
Table below shows the revenue and expense distribution of the proposed hotel. This allows hotel managers to understand the components that generate hotel income and operating costs.
| Projected revenues and expenses Proposed Hotel Operation | ||
| Revenue Distribution | Y1 2020 | Percentage |
| Occupancy | 68.86% | |
| Available Room Daily | 40 | |
| Total Available Room | 14600 | |
| Total Room Sold (Annually) | 10054 | |
| ADR | $100.00 | |
| RevPAR | $68.86 | |
| Total Revenue | $1,005,417 | 100% |
| Expense Distribution | Percent of Rev. | |
| Rooms | $130,704 | 13.00% |
| Food & Beverages | $100,542 | 10.00% |
| Fixed Charged | $94,509 | 9.40% |
| Administrative and General | $80,433 | 8.00% |
| Utilities | $68,368 | 6.80% |
| Property Operation & Maintenance | $60,325 | 6.00% |
| Sales & Marketing | $50,271 | 5.00% |
| Minor-Operated Department | $18,098 | 1.80% |
| Telephone | $3,016 | 0.30% |
| Total Expense | $606,266 | 60.30% |
| Net Operating Income (NOI) | $399,151 | 39.70% |
| Annual Interest | $44,000 | 2.00% |
| Earning Before Tax | $355,151 | 35.32% |
| Coporate Income Tax | $71,030 | 20.00% |
| Local Tax | $3,552 | 1.00% |
| Net Income | $280,569 | 27.91% |
Recommendations
Furthermore, energy conservation should be a priority where the design of the hotel encourages minimum usage of power and water as well as endorsing open space and clean air through a plantations and vegetation in the area. Energy conservation can be accomplished through; use of clean energy generated from solar panels, and ecofriendly lighting systems in the hotel.
Conclusion
Developers typically have an idea of the market when they originally consider a site or development plan. Investors, regularly check for developments, observe competitors and seek demand within the market. Through this knowledge, developers are likely to recognize an opportunity and create a business concept to take advantage of the situation. Nevertheless, intuition only cannot guarantee the achievement of a project without an appropriate analysis.
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