Feasibility Study On Extension Of Hotel

TR hotel is a four-star comprehensive tourism hotel which located at Wuxi City. At present, TR hotel is undergoing renovation of the hotel’s planned expansion project. Can it be trial operation smoothly after expansion? To solve this problem, the paper will analyze the feasibility of trial operation based on the data about TR hotel before and after expansion and the market operation of hotel industry in Wuxi. And aiming at the existing problems, the paper will offer some constructive suggestions for the colleague reference. We’ve come to the following conclusions through our research:(1) According to the market environment analysis, TR hotel has very advantageous geographic traffic conditions, the policy environment, investment climate and tourism and cultural resources; but, the quantity of high star-level hotel in this region is increasing quickly, therefore, TR hotel must be accurate positioning and continuously innovating and developing in facing of many threats in its trial-operation. (2) According to the economic feasibility analysis of the project operation, the TR’s NPV is greater than zero, while the benchmark discount rate is less than the internal rate of return, and its payback period is significantly higher than other similar hotels in the area, therefore, this project is economically feasible.(3) According to analysis of profit and loss of sensitivity analysis, we can see that TR hotel has a strong ability to resist risks, which has a great impact on operation revenues and Project profitability. Therefore, TR hotel should focus on improving the revenue and fine the cost management in its trial operation stage.In addition, the TR hotel has actualized energy saving and environmental protection. It uses environmental protection materials in building materials which can promote the image of the city and can win more profits in future ten years. Also, it can bring more tax revenue to local finance. So, this project has high economic and social benefits.