A feasibility study is very crucial to any entrepreneurship venture because it helps in determining the viability of any prospective project and justifies its undertaking (Hassanien, 2007). This report considers the elements that need consideration while conducting a feasibility study to build a hotel building. To complete this undertaking, literature review from various sources is explored. The report includes a discussion of these elements and links them with relevant existing hotel buildings in Hong Kong. The following elements need to be considered: location of the building, legislative considerations, current supply, funding and finance, competition, social and economic climate.
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- Building location
The intended building’s location is within the outskirts of an urban center. There are few hotels within this locality since most of them are located at the city center. Moreover, the site is accessible by road and railway. Nykiel (2007), states that location is one factor that clients consider before making decisions.
- Legislative considerations
Legislation considerations prevent confrontation with the governing authorities regarding laws that guide building procedures and practices. Such laws are meant to ensure that the building is safe for the users and does not interfere with the aesthetic value of the surrounding. Conrad hotel, located within Hong Kong’s business district is an example of a building that has followed legislation and has enhanced the aesthetic value of the surrounding due to its ambiance and beauty (Conrad Hotel Home Page, 2012). Before construction, its engineers consulted widely with government officials to ensure laws were observed.
- Current supply
Considering the current supply within the location helps to determine whether it’s rational to start the project or not. A deficiency in the supply is a sure base to support the viability of the undertaking (Panel Kerr Forster Associates, 2010). The supply of hotels within the location of this building does not match supply and, therefore, calls for additional hotels to meet the excess demand.
- Funding and finance
Constructing a building requires enormous financial resources that may not be available to those planning the building project. This fact makes funding and finance consideration a critical element is a feasibility study. This element explores the sources of funding such as investors and financial institutions like banks.
Competition within the locality of the establishment is important because it helps those planning the project to determine where their intended investment fits within the entire market. Evaluating the local competition helps in identifying weak areas in competitors’ businesses and maximizing on them to gain market share (Veal, 2006).
- Social and economic climate
Social and economic conditions of a location determine the profitability of a business. Such conditions include levels of disposable income, lifestyles and cultural values of the people within an enterprise. Grand Hyatt hotel, located in Hong Kong’s business district taps the disposable income of business people within the city (Grand Hyatt home page, 2012).
For a feasibility study to provide a viable report for an investor to proceed with a project, it should explore key elements of a feasibility study. These elements help to determine viability of the project and thus provide a ground for support by authorities, management and financiers.