Financial plan . Costs and revenues report .

Financial plan. Costs and revenues report.

Graphic-calculation of breakeven point.

REVIEW.

Main point of the project

Creating of the hotel complex network under the trademark «VM – RESORT CLUB» - comfortable resort in the city Bukovel (Ivano-Frankivskaya region), c. Kiev, for the tourists and its habitants to spend their time in a comfortable and special way; providing full range of services for living and rest for families with children and business events as well.

The further step is to create the hotel complex network in the Ukrainian cities with population exceeding one million (Kharkov, Dnepropetrovsk, Odessa, Lvov)

CONCEPTION

Name of the complex

VM - RESORT CLUB

Positioning

Hotel complex for comfortable rest, entertainment and business events

Price bracket

Middle, middle +

PROJECT MISSIONS

1. Creating of high profitable enterprise.

2. Providing locating and living service in hotel complex for population.

3. Getting profit by providing of the abovementioned service.

TARGET TERMS

Target term of the project – __ months.

Payback of the project – __ months.

PROJECT COST

Necessary investments value for two complexes is - 6250000, 00 UAH or 250000, 00 $

PROJECT SOURCE OF FINANCING

Private investment promotion.

PROJECT BENEFITS AND RISKS

Benefits: commercial and social (providing h locating and living high-quality service in hotel complex for population, getting profit, creating workplaces).

Risks: opening new hotel complexes in the region, i. e. increasing of market competition; damping of demand for the providing services due to reducing of population income level.

Below are the risks which can influence business activity:

Risk type	Risk	Risk management methods
Law	Permanent legislative changes	Changing of taxation forms, property forms and business activity
Law	Necessity to form new license for chosen business activity	Getting license
Financial	Lack of fund	Private investment promotion.
Market	Low demand	Determining clients demand, prices variation
	Increasing of market competition	Competitors activity analysis
	Increasing of market competition	Their strengths and weaknesses determining

External environment SWOT-analysis of hotel complex

Strengths	S	Opportunities	O
Unique form under own trademark High-quality and comfortable rest both for families and enterprises Full range of services Large complex area Comfortable transport availability The complex is located in the forest, on the top of the mountain with all-round view Swimming pool and entertainment events are included “Western” level management “Western” level service Rather low competition level Restaurant with vegetarian menu High-quality conference hall SPA and treatment procedures Not daily, but package selling Year-round occupancy rate High rating in search systems		Region development and human wellbeing improvement Population ability to pay High-quality resorts deficit Increasing of high-quality service culture of consumption Construction high-quality roads in the region Creating of hotel complex network
Weaknesses	W	Threats	T
Complexity for complex attendance forecasting Time to promote hotel complex Presumable high service cost		Annual increase of building value Annual building materials appreciation Competitor appearance Reduce of population purchasing power

HOTEL COMPLEX AREA

The restaurant with events hall for 40 persons and stylized VIP-zones for 10-15 persons will be located in the area. Also there are summerhouses for 4-6 persons. One of the buildings will locate hotel for 34 comfortable rooms with SPA service and conference hall for running corporate events for 40 persons. The rooms in hotel are divided into “standard” (24) and “lux” (10). Besides that, the complex area will locate 5 cottages. Each of the cottages will contain 6 persons and private SPA-pools.

Hotel complex will provide full range of services for additional payment: sauna, steam baths, SPA, treatment procedures, sports ground, ping-pong field, pools, billiard, Ropes Park, bicycles and Quadra cycles hire. Kid room and special playing ground will be worked for children. Skiing gear hire will be arranged in winter season.

CORE AUDIENCE

Visitors categories

Families Families with children having average revenue level, who follow healthy lifestyle, appreciate rest at nature, comfort and worthy service. Young people People who want to have a rest on fresh air, , to abstract themselves from day-to-day routine and enjoy nature beauty. Young active people, who like conversation and funny leisure time. Audiences having separate interest Yoga-groups and groups with other interests Business audience Companies, organizing corporate events, meetings, conferences, seminars, etc. Age 22-65 years

MAJOR TYPES OF SERVICE

· Restaurant (40 per., VIP-zones – 10-15 per.)

· Hotel ( 24 “standard” rooms and 10 “lux” rooms)

· Cottages with Jacuzzi – 5 pc.

· Conference hall containing 40 per.

· SPA, steam baths, sauna

· Pool

· Ropes Park, sskiing gear bicycles and Quadra cycles hire

One of the greatest advantages is year-round seasonality providing additional service: ski – in winter, bicycles – in summer.

There is a forest next to the complex, where you can find bicycles track.

Guided tours and mountains hikes will be organized for guests of the complex.

GROUND AREA CHARACTERISTICS

The ground area is formalized as private ownership of land, which is building as an assignment. The ground area has all the communications and electricity and roads are provided as well.

RESTAURANT

The first floor will locate major restaurant, zone-lunge (closer to the hotel) and manufacture (kitchen, support spaces and own bakery) First floor square percentage corresponds the requirements: 50% - restaurant, 50% - manufacture.

Restaurant manufacture includes the following processes:

Cold dishes, meat, fish, pastry shop

The second floor will contain events hall, VIP-zone, billiard room, administrations room for staff work.

Restaurant cuisines: European, Ukrainian, vegetarian, individual.

Major directions:

• Salads and cold dishes

• First course (borsch, fish broth, solyanka)

• Second course (meat, fish and vegetable dishes)

• Chicken dishes

• Chef’s specialty made in “hunting cuisine” style

• Grilled dishes (meat, fish, vegetables)

• Garniture

• Desserts

• Own bakery and bread

• Hot beverages (tea, coffee, chocolate, Горячие напитки (чай, кофе, шоколад, glogg)

• Cold beverages (water, juices, lemonades compotes, fresh juice)

• Beer

• Wine list (wide range of red and white wines)

• Strong alcohol beverages (vodka, whisky, cognac, etc)

• Kalian

Additional directions:

1. Kids menu

2. Banquet menu

3. Catering menu

Outdoor performance stage will be located in front of the restaurant. Glades with flower and wonderful flower-gardens will surround the outdoor performance stage. Besides the restaurant, this area will contain summerhouse for 4-5 and 6-8 persons. Two summerhouses seem to be closed and heated by fireplace in order to be used in winter season.

In order to make events (banquet and corporate), tent beautifully adorned with flowers will be set on the glade in summer season

Restaurant design should be done in serious way, and such zones as major hall, manufacture, additional rooms and administrations rooms should be planned in accurate from, as well.

Equipment and working zones should be located due to the actions which will be done. It’s important to foresee cooperation between departments and waiter’s serving zone. The kitchen is separated. It must be ventilated, have good kitchen hood (but its noise must be maximally reduced), have good lightening. Waste traffic route must not intersect with food. Correct equipment location will improve the efficiency of staff work, release from useless movements and raw material spending. Good restaurant design let us create comfort in working zones and improves personal efficiency.

HOTEL COMPLEX

Hotel complex consist of hotel and 5 cottages staying separately on the complex area.

· Lobby (hall, reception, support spaces) Лобби (холл, служба рецепции, подсобные помещения)

· Conference hall containing 40 per.

· SPA, steam baths, sauna

· Hotel room capacity is 34 rooms:

“lux” rooms – 10

“standard” rooms - 24

5 VIP cottages (each contains 6 persons + kids)

Total: hotel capacity is 98 adults and 72 children)

· Each floor contains linen room

· Equipment room

· Laundry

· Storage

· Boiler rooms, control room, water filter and so forth and so on.

The first floor will locate receptions, lobby, restaurant, kitchen, rooms for SPA and treatment procedures

The second floor will have conference hall and rooms.

Floors with hotel room capacity must have linen and equipment rooms.

Basement is suggested to contain boiler rooms, water-supply facility, laundry, raw material storage.

Hotel services:

· Breakfast – open buffet

· Bar-lounge, where you can order alcohol, snacks and tea/coffee

· Information service

· All day security system

· Parking

· Communication service

Hotel living cost:

Room	Low season	High season	Holiday season
Standard	750 UAH	1300 UAH	1900 UAH
VIP	1500 UAH	2500 UAH	3500 UAH

CONFERENCE HALL

Conference hall will provide full range of business services for organizing conferences, business meetings, seminars, banquets and corporate events.

Conference hall will be located on the first floor, in the central zone.

Conference hall services

· Multi Media Projector

· Projection display

· Laptop

· Loudspeaker equipment

· Radio microphone

· Video

· Flip-chart

· Wi-Fi

SPA- salon

All the conditions for restoration to physical and moral strengths will be created with the help of full treatment and SPA procedures, and inner harmony acquisition as well, that makes the rest in the complex be unforgettable.

STEAM BATH

Guests can have get steam bath and beck services in the complex area (near artificial water body). Steam bath is definitely the bet place to relax, talk to friends, and have a great rest, combining with health benefit. If homelike surroundings and privacy are added here (which are created for all the guests), this place will be able to become “highlight” of our restaurant-hotel complex.

	Room	Low season	High season
Steam bath	200 UAH/hour (8$)	300 UAH/hour (8$) (12$)	400 UAH/hour (8$) (16$)
Beck	300 UAH/hour (8$) (12$)	400 UAH/hour (8$) (16$)	500 UAH/hour (8$) (20$)

POOL

Pool (total area is 70 square meters) will be located directly on the complex area in front of the administration building with stunning Mountain View. The pool will be opened, double-deck depth (2, 20 m and 1, 20 m), additionally water heating are foreseen for swimming in winter season.

The pool may be attended by guests who live in hotel and cottages on a paid basis and free of charge and by the people who don’t live in complex. Pool cost per day for adult is 1500 UAH (6$) and for children is 100 UAH (4$).

In spring and summer season the pool zone will be equipped with hammock-chairs, umbrellas, and food and drinks order system will work. Changing room and shower will be installed as well. Location of pool zone will have a small room, where the towels will be given.

SPORTS GROUND

People who like active leisure time can find a sports ground for tennis, volleyball, basketball and mini-football

COMPLEX AREA

Resort area will be fenced and secured 24 hours per day. A lot of attention will be focused on landscape design because the complex area (and full range of service) will create climate for guests and add comfort and homelike atmosphere as well.

The complex area will contain paths, hotel and restaurant zones will be build with the help of stone, for instance. It is important to foresee lightening which harmonizes and adds complex style: highlighting fixed along the paths, flashlight, flower-garden highlighting, etc.

All the area will be adorned with green grass, bright flower-gardens, stone slides and natural bush fence. In addition, the area will contain decorative elements (benches, sculptures, vases etc.)

PARKING

Parking is set for visitors comfort. Parking is for guest and it is located at the complex entrance.

Due to abovementioned features of the restaurant-hotel complex we can define the following advantages:

Unique form under own trademark

High-quality and comfortable rest both for families and enterprises

Full range of services

Large complex area

Comfortable transport availability

The complex is located in the forest, on the top of the mountain with all-round view

Swimming pool and entertainment events are included

· Unique form

· Good location and infrastructure

· Having rest near the nature at unique resort in Karpaty

· Big opened pool

· Full range of services

· Service and infrastructure concentration in the only one place

· Low competition level.

Hotel complex’s concept is unique because it combines full range of services both for guests with children and for corporate events.

MARKET ANALYSIS

Ukraine has great potential in hotel-restaurant sphere because this business has being developed for last 2 years and foreign developers take interest in it. Indeed, hotel restaurant business dynamics can be assessed as very positive.

Unfortunately, supply is lower than demand. Hotel quantity index per 1000 per. in Ukraine (in compare with European countries) tends to be the lowest one.

DIAGRAM. UKRAINIAN ROOMS QUANTITY PER 1000 PERSONS IN COMPARE WITH EUROPEAN COUNTRIES.

Data in the diagram assert the hotel sphere in Ukraine has great potential. Private investment promotion into hotel business and international networks appearance seem to be the question of civilize market growing and developing due to the world dogmas.

Crucial moments in hotel estate development in Ukraine became the following:

· Annual session of European Bank for Reconstruction and Development in Kiev in 2015;

· Arranging final part of UEFA football championship with the Republic of Poland in 2012. Host cities: Kiev, Donetsk, Dnepropetrovsk, Lvov, Odessa, Kharkov.

Hotel market in Ukraine is attractive for international agents because of good proposition absence and increasing demand. Taking into account implementation of planning projects, demand for high-quality hotel service will be higher than supply during the nearest 10 years, and capacity level of existing hotels is expected to be rather high. If we talk about tendency, successful hotels will be sold to foreign investors.

Economic insecurity in the country influences hotel market. Companies (which used to use five-star hotels) are saving money now and send their co-workers to cheaper hotels. Business trips quantity as well as corporate events, conference (which are organized in our country) in Ukraine have been reduced.

In general, hotels try to reconstruct themselves and find new ways to lure customers. The good news is business activity return in 2015.

According to the destination management statistics, as of 20^th May 2016 Kiev had 12 019 hotel rooms, 1449 of them are five-star rooms, 2428 – four-stars rooms, 4139 - three-stars rooms, 891 – two-stars rooms, 175 – one-star rooms. Other 2937 rooms are hotels without category.

The question regarding hotel market saturation should be discussed using two views. If we talk about current economical and political situation in country, rooms’ number is not big but too big. If we estimate this segment through the prism of room security in compare with European capitals, certainly, Ukraine is able to grow.

The most demanded categories in the hotel market are four and three-star hotels. Foreigners traditionally demand high-price rooms; there are a lot of such rooms. Inner tourist is oriented on middle price, good location and good service, but there are not a lot of good affordable hotels.

Thus, there is increase of Ukrainians as hotel clients. There are almost 50% of Ukrainian visitors in some of the hotels.

Major problems of hotel market in Ukraine.

1. Small percentage of famous multinational hotel corporations. Hotel market in Ukraine is really attractive for international agents due to good supply and growing demand. Nowadays Ukrainian market has such hotel operators as «Radisson SAS», «Rixos», «Hyatt International», «Hilton», «Inter Continental». Significant obstacle ifor foreign investors is difficult to get permission in local power structures as well as government policy which is not assigned to make investment climate better.
2. There is no good proposition in the country – old-fashioned material and technical resources, need to reconstruct hotel fund, low service level, lack of competent personal.
3. There is no attractive investment climate in the country. During creating of investment climate which would assist material and technical resources attraction into hotel sphere the crucial requirement is taxation reduce and guarantees to ensure property. The question regarding taxation reduce must be discussed through the prism of interest rate reduce for three major tax types – value added tax, income tax, charge on payroll tax that let it reduce part of expropriate income and will stimulate interest in business development in hotel sphere.
4. Political instability in the country.
5. Some difficulties in bank sphere – Ukrainian commercial bank can loan entities and persons at high percent that is not good motive to develop place of accommodation material and technical resources.
6. Difficulties with land uptake, deficit of free ground areas, especially in the capital and big cities.
7. Hotels in three-stars segment and lower are unoccupied in Ukraine and are introduced by enterprises with too low service level and low range of services.

Advantageous directions and market development tendency in Ukraine can be considered the following:

1. Active development of small hotels and private complexes. This is connected with wishes which are formed by modern tourists: they want hotel to be not only room for temporary living but they want to fill homelike atmosphere, uniqueness that is one of the identities of independent hotels. Competitive advantage of private hotel is private approach to each client, i. e. they use personal approach, create home atmosphere far from home. Segment advantage of mini-hotels seems to be rather short payback period and rather small investments.
2. The most required will be the cheapest rooms – hostels. There is no competition, but demand is huge because most of the visitors are detailed staff, students, low-cost segment of tourists who need minimal comfort and overnight stop, and they can’t spend money in “stars” hotels. There are more the ten hostels in Kiev. To compare: more then 100 hostels work in Kharkov. Their owners are mini-hotel owners, pension and apartment house. домов.
3. Perspective advantage may become apart-hotels market which has not get good development in Ukraine. World widely apartments tend to be furnished hotel rooms which combine home coziness and hotel service accept. Apart-hotels tend to be located in expensive districts. Apartments can be offered in short-term and long-term rent as well as sold. All over the world it is normal to purchase hotels in property, but in Ukraine the same projects are on realization step. Nowadays Kiev has 5-7 objects, which belong to apart-hotels.

4. Due to domination of businessmen coming to negotiate in Kiev and other big cities there is demand in VIP hotels, for example, congress-hotel ( with big conference halls, meeting rooms and event halls) located not far from offices and business centers.
5. As far as market being full of 4-5-stars hotels there is a shift of priority development direction into the middle level projects – 2-3-stars hotels and less categorical hotels.

As a conclusion there is need to mark that tourism industry in many countries was being from during the decades, and now it is developing, create new working places for millions of people that influence government economy in positive way. In our conditions tourism has to become driving power to from market engine of companies running and flow of funds into budget. That’s why we should take into account creation of advantageous conditions to lure foreign investors in order to develop and improve hotel market in Ukraine. Upgrade of legislation, stabilization of political situation, improving of economical conditions will assist success.

Let us view rest places in summer season in Karpaty (competitive environment) taking into consideration the fact that hotel complex will be located in Bukovel.

Slavskoe – hotel “Perlyma Karpat”

MARKITING PLAN

PR- strategy

№	Method
1.	Working with business, special and entertainment media Goals: • to establish relations with magazines • to initiate free publications issue in form of articles, news notes about events having organized in t he complex; • to increase of awareness about hotel restaurant complex among all the target audience; • to create interest in visiting создание заинтересованности в посещении hotel restaurant complex among all the target audience • to form positive image of the complex
1.1.	PR-articles about complex opening
1.2.	Interview with chef/restaurant CEO
1.3.	Permanent video and photo materials giving to mass media regarding complex
2.	Organization of special events, promos: Goals • to create awareness in hotel restaurant complex among all the target audience; • to lure maximal visitors number
2.1.	Organization of special parties in restaurant Approximate schedule: • 31.12 – 01.01 – New Year • 06 – 07.01 – Christmas • 8 March • 01.04 – Fool day • Eastern • Troitsa • 24.08 – Independent day of Ukraine • 19.12 – St. Nickolay’s Day
2.2	Organizing of kids fets (clowns, kids theater)
3.	Organizing of special presentation: Goals: • to form contacts with potential partners, journalists • to sign agreement regarding the cooperation with tourist companies.
3.1.	Show-tour for tourist companies and event- agencies.
3.2.	Press-tours for mass media and restaurant critics invitation for dishes degustation

Marketing strategy

1.	External advertising: Goals • to lure passing people attention to the complex • to increase complex capacity/attendance
2.	Internal advertising: Goals • to form positive image; • to increase complex recognition; • to create guests complex loyalty
2.1.	Restaurant menu, folders for payment, business cards are made in one style
2.2.	Menu-holders on tables, banners with major or special propositions
2.3.	Flyer about each event
2.4.	Souvenirs on the table
2.5.	Hotel price list
3.	Radio advertising: Goals: • to create awareness of the complex among all the target audience; • to lure maximal visitors number
4.	TV advertising Goals: • to create awareness of the complex among all the target audience; • to lure maximal visitors number
5.	PUBLICITY MASS ADVERTISING: Goals • to inform people about new events in complex, SPA-services, etc. • to lure maximal visitors number
5.1	To distribute image advertising materials in boutiques. Cross-promotion might be used( to take boutiques material into to the complex)
6.	Internet-advertising: Goals: • to create awareness of the complex among all the target audience; • to lure maximal visitors number • to inform people about new events in complex, SPA-services, etc.
6.1.	Paid search in Internet-portals
6.2.	Hotel restaurant complex Web-site
7.	Advertising in special publications: Goals • to create awareness of the complex among all the target audience;

Sales promotion

1.	Price promotion: Goals: • to lure maximal visitors number • to increase bill size • to create guests complex loyalty
1.1.	Discounts for permanent clients (discount cards 5%, 10%, 15%)
1.2.	Discounts by table order, rooms through Internet and web-site
1.3.	Discounts for corporate clients if complex order is made: conference hall rent + banquet+ hotel living
2.	Goods promotion:
2.1.	Free chefs specialty degustation
2.2.	Present from chef

Direct-marketing

1.	Direct-mail Goals: • to establish relations with potential partners: • to sign agreement regarding the cooperation with tourist companies.
1.1.	Addressed mailing regarding cooperation proposition with tourist and trainings companies, event-agencies Пакет предложения – фирмовый конверт, диск с презентацией комплекса, визитка, коммерческое предложение.
2.	Sms- mailing Goals: • to inform people about new events in complex, SPA-services, etc. • to lure maximal visitors number
2.1.	Sms with special propositions, for example, например, show sms in complex and get discount

My experience shows that resort complex exploitation needs peculiar knowledge in marketing and management. In this business the following aspects are important:

- Complex positioning

- Service quality and quantity

- High quality service

- room cost whish is based on the complex uniqueness and providing services.

EXPENDITURES ANALYSIS

MONTH EXPENDITURES, UAH

№№	Account cost	Amount, U AH
1.	Service ( signalizing, Internet, telephone, electricity)	28 000, 00
2.	Salary budget	170 000, 00
3.	Taxes	37 4 00, 00
4.	Advertising and promotion	10 000, 00
5.	Laundry	15000, 00
6.	Other expenditures	5 000, 00
7.	Total amount	270 000, 00 (11000$)

Project works:

· Graphic design

· Working design

· Interior

· Engineer calculations

Major hotel equipment:

· Furniture from natural wood which will serve in long term period – beds and double beds, bedside chest, mirrors, tables, chairs, sofas. Take to consideration reception design.

· Computer equipment for reception and “lux” rooms.

· Cooling equipment and mini bar equipment and bar design.

· Laundry equipment, ability to do laundry for guests every day – irons, washing machines and other equipment.

· Kitchen equipment;

· Bathroom equipment: shower cabin, hangers, white robes, green and blue ceramic tile, liquid soap, glasses, shampoos, soap, bathrooms (in light colors);

· Cleaning equipment: vacuum cleaner, push broom.

· Mechanical dust-collecting devices

Staff schedule for administrative-institutional personal

Position	Quantity	Salary, UAH	Annual payroll taxes, UAH
CEO	1	25000 (1000$)	300000 (12000$)
Administrator	4	32000 (1280$)	384000 (15360$)
Chief accountant	1	8000 (320$)	96000 (3840$)
Cook	2	20000 (800$)	240000 (9600$)
Junior cook	2	10000 (400$)	120000 (4800$)
Barmen	2	10000 (400$)	120000 (4800$)
Waiter	4	16000 (640$)	192000 (7680$)
Chamvermaid	4	12000 (480$)	144000 (5760$)
Logistics manager	1	8000 (320$)	96000 (3840$)
Guard	3	9000 (360$)	108000 (4320$)
Bath attendant	4	20000 (800$)	240000 (9600$)
Total	28	170000 (6220$)	2040000 (74640$)

Financial plan

SCOPE OF FINANCE

In order to create 2 hotel complexes we need funds for building, its repair and equipment, getting HIS and fire fight permission as well as expenditures cover during first year.

Expenditures for 2 complexes opening:, 00 U AH или 250000$

PRICE POLICY

It is really practice to set prices upper than medium market prices but a little lower than other hotels’ prices which have been working for long period. гостиниц, работающих на рынке продолжительный период времени.

Competition environment is crucial; this influences pricing. Expenditures will be changed while pricing. There are expenditures for building, staff keeping nad accountant.

We are focusing not on the lowest prices but high-quality service and uniqueness.

FINANCIAL CHARACTERISTICS

Major characteristics:

Execution PLAN-GRAPHIC

Project steps	Execution conditions	Execution terms
Investment agreement signature	1 month	1-30 banking days
Entering State Register, Tax and Administrative institutions	Investment agreement signature	1-30 consecutive days
Location choice and documentation	Предварительные работы	1-30 consecutive days
Building - ground area purchase - making and getting building documentation	Investment agreement signature	Purchase - 30 consecutive days. Building – 180 consecutive days
Furniture and equipment purchase	Investment agreement signature	1-30 consecutive days
Area modification	Getting investment fund	1-30 consecutive days
Personal hire	Manufacture activity	1-30 consecutive days
Marketing strategy implementing	360 consecutive days	1-360 consecutive days
End of the project		Less than 12 months

CONCLUSIONS

So, hotel complex is high profitable and perspective business if manufacture is organized in a perfect way in spite of the market conditions which became rougher. Citizens quantity (who wants to have rest) has not been reduced, but vice versa, it has been increased due to family money saving during It increases visitors quantity Complex creation with the help of large investments will bring income and paybacks the services during 2 years. That’s why financial investment is really legitimate.

This investigation shows that such business as hotel complex and providing following service is profitable and perspective. On of the crucial activity conditions is skilled labor that can lure client and keep for a long period. Hotel business requires CEO’s discipline, knowledge and effectiveness and he needs to realize that such project requires perfect elaboration to attract clients and to make perfect staff system.

Financial plan. Costs and revenues report.

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