THE CASE TO BE MADE FOR NOT DOING THE PROJECT.
The Project often starts with a great idea, a magificent plot of land or beach, a new concept or an enormous ego.
The momentum grows as colleagues, governments, architects, engineers, construction groups, chains and brands climb on board and enthusiastically support the Project.
Part of the Project is financed and the momentum grows.
Consultants are hired and Market and Feasibility studies support the idea of the visionary.
The numbers support the pretty pictures.
Why is it that so many of these projects fail financially for the first and second owner? There are several answers to this question which include,
- Enthusiasm and support initially comes principally from those who would benefit but with little at risk.
- Consultants for market & feasibility studies generally conclude in favour of the client's opinion.
- Projects sometimes start before the final financing is concluded. The last dollar is the hardest to find.
- Pre-Opening Expenses and Starting losses are not properly financed, if at all.
- Owners overlook that they do not generally represent a typical client but insist on using their personal tastes.
Developers that allow for the process to reach the point of 'go/no go' may save a fortune compared to those whose beliefs are so strong that there is no exit.
David McMillan has been lucky enough to have had the following experiences,
- To open and operate hotels that have enjoyed enormous & surprising success.
- To operate hotels that are poorly conceived and should not have been built.
- To take a poorly performing property and turn it around.
- To re-conceptualise hotels & resort facilities.
- To participate in potential projects that were not built for good reasons.
I have also had the pleasure of advising several potential investors that their project is marginal or high risk from a business perspective. The decision to 'go-no go' is then theirs.
Fo further information, contact [email protected]
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