HUNDREDS OF MILLIONS OF DOLLARS THROWN AWAY BECAUSE THE RESORT DEVELOPER IGNORES THE FORMULA FOR SUCCESSFUL DEVELOPMENT
Hundreds of projects waiting to happen, wrecked on the rocks of a dream, a great location, new potential sustainable employment for hundreds.....and the project stalls.
The Caribbean, Latin America, the Black Sea, the Maldives, Hawaii, Central America, SE Asia, Africa, the Middle East. Every region of the world wants to capitalise on the explosion in travel, the potential to profit from creative real-estate development and the appetite for governments to get on the tourism bandwagon.
The Developers of most stalled projects today blame their demise on the 2008/2009 credit crunch.
"It was the bank's fault".
In a nutshell, it was'nt the bank's fault. It was the Developer's fault.
In a separate blog on this site, interested developers can learn what is needed to prepare a project for potential execution. There is a sequence to the actions that are necessary and if the developer gets them out of sequence, this is the first step taken in veering toward the rocks, a route that is expensive to correct and
from which the escape is extremely costly.
Here are some of the reasons why developers fail.
- They are experienced in construction and are itching to get started ......and they do.
- They are inexperienced developers and they listen to consultants....that need to be paid.
- They hire an architect when all they need is a basic plan.......and they get full, expensive plans.
- They complete a feasibility study before establishing what will be built.
- They get a cheap feasibility study from a local consultant......... that must be re-done.
- They have a great plan for land that they don't own or have optioned......... yet.
- They create a construction budget instead of a development budget.............whoops.
- They choose a hotel group and are flattered & encouraged by their enthusiasm.
- They have no financial architect that ensures that financing can be secured .........& get a loan.
- They do not understand that development is actually a science.
Here are some of the questions that a Developer must ask and must stay around long enough to listen to the answer. The sequence of these events is CRITICAL. Not one can be left out or skipped.
- What am I developing and am I experienced?
- Do I own the land?
- If not, can I secure it under an option?
- Do I have an experienced team?
- Do I know what each of them has to do?
- Have we prepared a realistic, competitive Master Plan?
- Is it financially feasible and are the valuations realistic....done by an independent consultant?
- Do I have an LOI from one or more operators and brands?
- Do we have all the financing committed?
- ......If all the above points are ticked, start building. If not, go back to Step 1 & start again.
If you do not know if you have answered 'Yes' in error, check with a professional.
THE ONLY WAY FORWARD
PLAN - TEAM - CHECK - STUDY - FINANCE - BUILD
For more information on any of these points, contact firstname.lastname@example.org