PROJECT FEASIBILITY STUDY

4 Star Resort - ( mid range market )

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Location
Ariel view of the island

Distance from Ibrahim Nasir International Airport : 130KM (north)

Transport: 4hrs by Speedboat from Airport
35mins by Seaplane from Airport

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TOURISM STATISTICS
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 (014yrs) ................................................. 4%
Youngsters (1524yrs) ........................................... 4%
Economically Active (2544yrs) ............................. 41%
Middle Aged (4564yrs) ........................................ 45%

TOURIST ARRIVALS
Year
Tourist
2005
395320
2006
601923
2007

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TOURISM STATISTICS

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Resort Concept
Ariel Vew
This is an idea only not actual drawings

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Room Concept Idea - 1

Over Water Bungalow

Number of rooms : 30 rooms

Area : 70 Sqm
Turnkey cost : 500,000.00 US$ per room

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Room Concept Idea - 2

Beach front Bungalow

Number of rooms : 70 rooms

Area : 60 Sqm
Turnkey cost : 275,000.00 US$ per room

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Pictures
Beach , Vegetation, Sea
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ASSUMPTIONS
Basic
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.

Estimated Cash flow chart - 10 Years

YEAR

REF

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

YEAR 6

YEAR 7

YEAR 8

YEAR 9

YEAR 10

(FIGURES IN USD)
NUMBER OF ROOMS
AVERAGE OCCUPANCY

100
55%

100
68%

100
70%

100
70%

100
70%

100
70%

14,290,940 95%
441,204 3%
11,765
0%
348,262
2%
15,092,171100%

17,905,252 95%
553,103 3%
15,085 0%
386,315 2%
18,859,755 100%

23,585,074 96%
670,656
3%
18,291 0%
405,685
2%
24,679,705 100%

23,585,074 95%
690,775 3%
18,291 0%
405,685 2%
24,699,825 100%

23,585,074 95%
690,775 3%
18,291 0%
405,685 2%
24,699,825 100%

25,534,793 96%
690,775 3%
18,291 0%
441,685 2%
26,685,544 100%

25,943,582
711,499
18,291
441,685
27,115,056

DEPARTMENTAL EXPENSES
ROOMS
FOOD & BEVERAGE
TELEPHONE
TOTAL

2,858,188 20%
176,481 40%
6,471 55%
3,041,141

3,581,050 20%
221,241 40%
8,297 55%
3,810,588

5,188,716 22%
268,262 40%
10,060 55%
5,467,038

5,188,716 22%
276,310 40%
10,060 55%
5,475,086

5,896,269 25%
276,310 40%
10,060 55%
6,182,639

6,383,698 25%
276,310 40%
10,060 55%
6,670,068

TOTAL OPERATING INCOME

12,051,031 80%

15,049,167 80%

19,212,667 78%

19,224,739 78%

18,517,186 75%

UNDISTRIBUTED EXPENSES:
ADMIN & GENERAL
MARKETING
PROPERTY OPERATION MAINTANCE
ENERGY COST
TOTAL

1,509,217 10%
422,581 2.8%
377,304 2.5%
603,687 4.0%
2,912,789 19%

1,885,976 10%
528,073 2.8%
471,494 2.5%
754,390 4.0%
3,639,933 19%

2,467,971 10%
691,032 2.8%
616,993 2.5%
987,188 4.0%
4,763,183 19%

2,469,982 10%
691,595 2.8%
617,496 2.5%
987,993 4.0%
4,767,066 19%

2,469,982 10%
691,595 2.8%
617,496 2.5%
987,993 4.0%
4,767,066 19%

REVENUE:
ROOMS
FOOD & BEVERAGE
TELEPHONE INCOME
RENTALS & OTHER INCOMES
TOTAL REVENUE

NOTE 1
NOTE 2
NOTE 3
NOTE 4

TGST - GOVERNMENT TAX

2,263,825.69

15%

2,828,963.29

BED TAX

267,358

EARNINGS BEFORE FIXED CHARGES

6,607,058

55%

8,237,946

FIXED CHARGES
RENT SCHEDULE 4.8
TOTAL

520,000
520,000

3%
3%

520,000
520,000

EARNINGS BEFORE DEPRECATION

DEPRECATIONS
NET EARNINGS
BALANCE BROUGHT FORWARD

6,087,058
913,059
5,173,999
0

40%
15%
34%

CASH FLOW SHEET

EARNINGS BEFORE DEPECIAYION
DISCOUNT FACTOR
10%
DISCOUNTED CASH FLOW
ACCUMULATED DCF
Running Capital
LOAN Installment with 6.5% Interest
NOTE 4.7
ACCUMULATED CLF

6,087,058
6,087
6,080,971
6,080,971
1,000,000
7,088,813
(7,841)

15%

342,325

6,809,556
892,831

15%

3,704,973.73

413,753

413,753

55%

10,333,775

10,338,945

3%
3%

520,000
520,000

7,717,946 41%
926,154 12%
6,791,793
36%
6,791,793

7,717,946
7,718
7,710,228
7,702,387

3,701,955.78

2%
2%

9,813,775 40%
686,964
7%
9,126,810
37%
15,918,603

9,813,775
9,814
9,803,961
10,696,792
6,530,300
4,166,492

520,000
520,000

15%

2%
2%

9,818,945 40%
687,326
7%
9,131,619
37%
25,050,222

3,704,973.73

15%

100
70%

100
70%

100
70%

96%
3%
0%
2%
100%

25,943,582 96%
711,499 3%
18,291 0%
441,685 2%
27,115,056100%

28,537,940 96%
711,499 2%
18,291 0%
459,685
2%
29,727,414 100%

28,537,940 96%
732,844
2%
18,291 0%
459,685
2%
29,748,759 100%

6,485,895
284,599
10,060
6,780,555

25%
40%
55%

6,485,895 25%
284,599 40%
10,060 55%
6,780,555

20,015,476 75%

20,334,501

75%

20,334,501 75%

2,668,554
747,195
667,139
1,067,422
5,150,310

2,711,506
759,222
677,876
1,084,602
5,233,206

10%
2.8%
2.5%
4.0%
19%

2,711,506
759,222
677,876
1,084,602
5,233,206

4,002,831.59

413,753

413,753

9,631,393

10,448,581

520,000
520,000

2%
2%

9,111,393 37%
546,684
6%
8,564,709
35%
33,614,932

520,000
520,000

100
70%

10%
2.8%
2.5%
4.0%
19%
15%

2%
2%

9,928,581 37%
595,715 6%
9,332,866
35%
42,947,797

4,067,258.33

4,067,258.33
413,753

10,620,283

10,620,283

520,000
520,000

2%
2%

10,100,283
606,017
9,494,266
52,442,064

37%
6%
35%

9,818,945
9,819
9,809,126
13,975,618

9,111,393
9,111
9,102,282
16,826,856

9,928,581
9,929
9,918,652
20,494,464

10,100,283
10,100
10,090,183
24,612,860

6,251,044
7,724,574

6,251,044
10,575,812

5,971,788
14,522,677

5,692,531
18,920,329

REQUIRED FINANCE FOR THE PROJECT

15%

413,753

520,000
520,000

10%
2.8%
2.5%
4.0%
19%
15%

2%
2%

7,134,485
284,599
10,060
7,429,144

25%
40%
55%

7,134,485
293,137
10,060
7,437,682

22,298,269 75%

22,311,076 75%

2,972,741 10%
832,368 2.8%
743,185 2.5%
1,189,097 4.0%
5,737,391 19%

2,974,876
10%
832,965 2.8%
743,719 2.5%
1,189,950 4.0%
5,741,510 19%

4,459,112.06

15%

4,462,313.80

Purchase Value
Earning in 10yrs bfr Loan payment

82,937,351.65

Cash Flow end of 10th year aftr loan

35,927,625.94

$35,962,500.00
Const. Value

$42,962,500.00
Total cost

1,000,000.00

84%

Running Capital

413,753

11,688,013

11,693,499 39%

520,000
520,000

2%
2%

520,000
520,000

$520,000.00

$520,000.00

CONSTRUCTION COST
Constructions Cost 6+ Star.
Water Suite
Deluxe Suite
Total Rooms
Duly duligence
Total Cost

30
70
100

500,000.00
275,000.00
5%

15000000
19250000
34,250,000.00
$ 1,712,500.00
35,962,500.00

$520,000.00

$520,000.00

$520,000.00

11,168,013 38%
670,081
6%
10,497,932
35%
72,434,263

11,173,499 38%
670,410
6%
10,503,089
35%
82,937,352

10,100,283
10,100
10,090,183
29,010,512

11,168,013
11,168
11,156,845
34,754,082

11,173,499
11,173
11,162,325
40,782,388

5,134,019
29,620,063

4,854,763
35,927,626

5,413,275
23,597,237

IRR

15% PR

$520,000.00

$520,000.00

2%
2%

10,100,283 37%
606,017 6%
9,494,266
35%
61,936,330

RENT SCHEDULE 4.8

RENT PER YEAR
520,000.00

15%

413,753

RATIOS
$6,000,000.00

CAPITAL

25%
40%
55%

$520,000.00

$520,000.00

$520,000.00

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