Type of Submission
Hotel feasibility studies play an important role in the hotel development process as hotel developers, lenders, and operators all require an analysis of a hotel’s projected operating performance and the ensuing financial returns. Such studies are rarely effective, however, at predicting future performance. Although scholars and practitioners have repeatedly recommended numerous improvements to correct their methodological weaknesses and improve their accuracy, few changes have been incorporated. This study’s purpose was to identify the underlying reasons why the methodological improvements identified in previous studies have not been undertaken. The research employed a qualitative methodology based on interviews with leading hotel owners, developers, lenders, and consultants. The key findings of the research demonstrated that the way in which feasibility studies are used, the value the stakeholders place on them, cost and time constraints, and the limited incentives and accountability associated with improving underlying assumptions and methodologies are key drivers behind the marginalization and stagnant evolution of the hotel feasibility study.
Hodari, Demaian and Samson, David
"SETTLING FOR LESS: THE INSTITUTIONALIZATION OF THE HOTEL FEASIBILITY STUDY,"
Journal of Hospitality Financial Management: Vol. 22
, Article 5.
Available at: https://scholarworks.umass.edu/jhfm/vol22/iss2/5