FEASIBILITY STUDY

Project Cost:
Basis for allocation:
Floor space
Condition of structures
Status of building
Degree of renovation
ESTIMATED COST:
(As per MPTC estimate
2014 )= 80 Crore (80
lakh/room)

Revenue mode : Profit from operation of

Heritage hotels
Project Allocation Basis:
Cost /room = Price capoccupancy
(Promote tourism)
Tenure of project = 15-25
years
=>> Minimum combination.

Financial Feasibility: Rough Estimation

Assumptions:
Average demand : Grows CAGR
5.26%
Average rate : Rs.25k/Room
Typical Debt 40% & Equity 60%
Interest rate: 10%

Funding Options:
Equity

Debt

Heritage
Hotels
labo
r

MP Tourism

Ops &
Maintenance

Constructio
n

Herita
ge
MPTD
C

80
%

Promotio
n

Type

Stake holder

Technical
feasibility:

Renovation cost bore by

company.

LESS-technology involved -outsourced

Price cap: ( first 10 years)

Legal
feasibility:

MPTDC owns the site

LESS-Contracts can be made.

Occupanc
Profit/roo
y
Price/Room
m

Schedule
feasibility

Contract company

LESS-Can start to operate once 25% of

rooms are ready

Market
feasibility

Company External
Demand

MODERATE- Avg. tourist visits increasing.

Economic
Feasibility

Company & MPTDC

LESS- As per estimate break even

can be achieved in 15 years /
Promote tourism

25%

26667

5333

50%

13333

2667

70%

9524

1905

100 %
equity

NPV CALCULATION:
10 years: -ve
20 years: BEP -21
Years
30 years: +ve

60 % equity

Feasibility issues