Hotel Project Investment Cost-benefit Analysis

In the context of booming economy,especially the rapid growth of the tourism industry in recent years,investment in hotel business has observed significant promotion by professional investors,because of its long-term stable revenue and growth potential.Stemming from their brand strategy and business plan,many prestigious real estate corporations invested in a series of hotel projects,in conjunction with development projects of urban complex,high-end residential as well as community businesses.However,under such trending movement of hotel investment,the operational status quo of hotels in China is barely acceptable.The functional configuration of a hotel and its target market are often mismatch.The scale is not right,either.Meanwhile,long return period with low benefit,heightened competition featured by price warfare and parity product and services cause significant turn over and severely short of talent in upper management.It becomes a crucial step in hotel investment projects to conduct systematic assessment and analysis on the operational status quo,and to identify the bottle-neck and corresponding root causes,and finally to form a solution to the future operation and development.This essay comprehensively analyzes the cost benefit for a hotel investment project,using post-project assessment theory and methodology.It is a prerequisite for a scientific assessment to establish scientific,systematic and comprehensive metric system.Hotel projects are a type of special and complex commercial real estate projects.Many factors have impact on the result.By literature and expert review,this essay attempts to identify the characteristics and impacting factors during hotel operations,and finds the measurements for the hotel investment result,and further establish acceptable measurement system.The choice of the methodology is the key in the entire assessment;it has direct influence on the effect of the work.This essay applies the state-of-the-art Fuzzy Analytic Hierarchy Process(FAHP)to comprehensively evaluate the operational status quo of a hotel project,and build the cost benefit measurement model.The author first uses Analytic Hierarchy Process(AHP)to analyze the investment assessing metric system for the hotel project,and find out the weighting for each hierarchy and factor.And then the author applies Fuzzy Comprehensive Evaluation(FCE)to establish the assessment model and produces the assessment.This essay takes Kunshan DL Hotel project as an example to demonstrate the workflow of assessing hotel project investment.It deduces the subject comprehensive evaluation score and grade by assessing its operational status quo and future development projection.Meanwhile,this process find out the root causes by analyzing each metric and hierarchy and factors that affect investment return.The conclusion should provide good suggestion for the future operation and improvement.