Traditional Style Hotel in Transylvania County

Traditional Style Hotel in Transylvania - Heritage Project

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Business Plan

Building a 3 Stars Hotel

  1. Summary……………………………………………………………………………………………………………..3
  2. The project………………………… ………………………………………………………………………………..4
  3. Market research……………………………………………………....……………………………………………..6
  4. Marketing strategy………………………………………………………....……………………………………….9
  5. Financial Plan……………………………………………………………..…………………………………………12
  6. Duration of works …………………………………………..………………………………………………………14
  7. Founding sources ………………………………………………………………...………………………………….15
  1. Summary

 

Me and my fiancée are proposing to build a 3 star Hotel in Transylvania County, Romania. We didn’t decide on a final location since we are still looking for land to buy.

 The hotel will consist of 10 rooms with double bed and will also include an restaurant that can be accessed by people in the Hotel and also visiting tourists .

The personnel of the hotel will facilitate the accommodation and also play the role of a guide for the tourists attractions in the area , when the clients request it .

The Hotel will offer accommodation in an authentic atmosphere and traditional food . The clients will have the possibility to rest and also to relax in the communal area and the beautiful surroundings  .

Also , companies will be able to organise training sessions or team-building events in a quiet place far away from the busy city life and everything will be based on the high standard that we will like to offer .  .

The total value of the project is approximated at £500.000,00

The money will come from the following sources:

  • Crawdfunding - £300.000,00
  • EU Funds - £200.000,00

As a result the company will employ 5 people: 1 maid ,  1 receptionist , 1 cook and 2 waiters .

Besides the new accommodation created we plan on building an organic food restaurant, a small farm and a small vegetable garden as a source for the organic food that we will offer.

  1. The project

 

We want to build an hotel in this area because it’s frequently visited by tourists and the demand is above what the zone has to offer in terms of accommodation

We plan to acquire at least 4000 Sq. M .

The hotel will be build following the national laws and norms : The order of the ministry for small and medium businesses , tourism and liberal professions 636/2008 .  

The level of comfort that we would like to offer is 3 Stars .

The hotel will have a capacity of 10 Rooms, 20 beds . The restaurant will have a capacity of 32 sits that will be located on the ground floor.

At the ground floor we plan on building the kitchen also in the basement we would like to build a cellar .

Because we plan on building the Hotel in a mountain area we plan on hiring a sky instructor in the winter time. 

 

The structure of the building will be the following : Basement , Ground Floor , 1st Floor , 2nd Floor.

At the ground floor area we will also have the reception that will have a waiting area with a couch , 2 armchairs and one coffee table . In the vicinity of the reception we will have the restaurant and the bar . In the restaurant we will have 8 tables with 4 chairs for each. The kitchen will also be located at the ground floor and will be fully fitted to fit the needs of the restaurant.

For the accommodation we will have 5 rooms per level , every room with its en-suite bathroom  .

At the start of the business we will employ the minimum amount of people needed. In the winter when the request is higher we will hire additional staff to accommodate the needs of the costumers.

Because of the location where we plan on building the hotel we will be able to find extraordinary landscapes and the costumers will be able to enjoy the traditions in the area .

We are proposing the next objectives:

  • We would like to reach an occupancy level of 60% per year and going forward from year three we would like to reach 90% occupancy level per year. We will be able to do this by offering qualitative and competitive prices .
    • The development of an brand and increasing the value of the intangible asset; in the same time this will help with the sales .

     

We will take actions for the improvement of client fidelity and we will try to reach a 50% returning rate of the clients . In the first place we will offer qualitative services that will satisfy all clients and we will implement bonus schemes for the clients that return .

Given the area where we would like to build the hotel we can say the we will have different type of tourism in the area : Cultural Tourism , Ecological Tourism ,  Adventure Tourism and Sport Toursim.

We will like to offer extra services that are specific for the area where the Hotel is located in terms of traditions .

The services that we will offer will be the following :

  • Accommodation
  • Restaurant
  • Sports
  • Hiking

                     

The accommodation

In the first instance the Hotel will offer accommodation for tourists in 10 rooms , every room equipped with double bed where an extra bed can be added for families that travel with children .   We opted for this option because usually families that travel with kids like to have the children in the same room.               

The bookings will be made through websites (i.e. booking.com ) or through phone , travel agents . 

The food you will eat

Besides the accommodation we would like to offer the possibility for the guests to eat at the hotel’s restaurant . 

The restaurant will be located on the ground floor , will have 32 seats and a bar . We will offer organic traditional food but we will include in the menu international food also .

All the required food ingredients will come from the garden/farm that we would like to build

Free Time

We would like to offer to the clients a place where they can relax and also be active. We will organise hiking’s , camp fires , open air barbeques , music events and the list can go on .  

For the people that want to learn the art of skiing , in the winter time ,  we will employ an instructor to teach them .

For the tourists that are curious on the traditions of the places we will organise trips to typical peasant households where clients can see how people in the area live .

  1. Market Research

 

The start of the business it’s often conditioned by the nature , diversity and the relationship that is developed . Other facts that we must take into consideration is the supplies of goods , utilities in the area , the relationship with different public.  By interacting with these components, tourism now targeting different objectives whose achievement required various practical ways that fall within the scope of marketing.

Potential suppliers

The suppliers of goods , services , workforce plays an very important because the day to day business is based on them .

The supply chain that we want to build will be mainly companies that offer different type of products / services but we aim to make a local supply chain from the people in the area that will provide traditional goods and also different type of organic products and through this the community will flourish. 

Through the marketing strategy that we have in mind and through the relationship that we will build with our suppliers we will always inform them with the volume of demand , the quality of goods/services  , prices that we use , delivery times and guarantees , the opportunity to use multiple companies and the commercial strategy that we are using .

To make sure that we have the required man power we will build professional relationships with people in the field of human resources, training centres , recruiting agencies or we will employ locals to help with the growth inside the community. 

For the tourism business we will make sure that we will have a large variety of services to suit the needs of every costumer. We will keep in contact with different specialized advisors in the tourism business, transport companies, telecommunication companies, non-governmental organisations  that will help us sell out product.    

Knowing the needs , the demands and the behaviour of the costumers are essential in a tourism business and we aim to get to know every client . We will not see the clients as a source of income but we would like to see them as family and we will try to make them feel like home . 

The potential clients are represented mainly by tourists coming from the cities. This is explained by the fact that the surroundings are well known for their beauty. 

 

Future Costumers

As a general structure the possible tourists are categorised as follows :

Ø      60 %  foreigners, mainly Germans, Austrians , Italians , British;

Ø      35 % Romanians

Ø      5 % other nationalities .

Also we can do another classification given by their motivation they have and the why they visit the areas :

Ø      70 % tourists

Ø      20 % business

Ø      10 % transit

 

The age of the people that visit this area can be categorised also :

Ø      50 % with the age  18-40 years old

Ø      40% with the age  40-55 years old

Ø      10 % with the age  above 50 years old

Also it has been observed that the categories of the tourists can be classified by the way they travel also  ::

  1. a)Family - 80 %;

                Unaccompanied         - 20 %

  1.   b)   Individual                  - 30 %

                      In groups                  - 70 %

These approximations on the possible clients were based on the demand of accommodation from different Hotels that run in that area . The information was acquired from different travel agencies , from people that organise trips .

The Catholic Church plays an very important role in the area because of their relationship that they have in countries like Germany , Italy , Austria .

Also , we took into consideration the fact that the Germans that left Romania but still have people that they know around the area and usually spend the holidays with friends in Romania . If at first they were give accommodation by their friends ,  slowly  , the idea of living in a neutral place seemed an better one and an Hotel is the first choice . This need is given by the influence coming from the occident , influence that can be seen especially in the last few years .  

Judging by the estimations done above on the possible clients we estimated that occupancy level will be at 50%. The medium holiday duration for a client is approximately 5-6 Days and is based on the information obtained from the travel agencies. 

As a conclusion of the above we can conclude that the Hotel will have clients that will travel in groups or as a family and most of them will be 25 years old and beyond .

The cultural tourism plays a very important role at the moment and is taking an increasing trend every year since people want to discover more about the traditions in the area .

Promoting the business

 

Because the tourism is not something new in the area it will need promoting. Through this process possible clients will be informed on the business and what services we offer

To be able to make this happen we will use the following promoting procedures:

Ø    To start with the promoting will be realised through promotional materials using the services of a printing factory. In these flyers we will explain what we offer and the way to access the Hotel . Also the flyer will contain the exact address , telephone number , e-mail address where clients can request accommodation and it will have the following slogan : ‘Our hotel offers those relaxing moments that all of us are searching for’    .

Ø    Given the fact that most of the clients are foreigners a website will be required that will show the amazing mountains in the area and also pictures of the picturesque places in the area . The website will also include pictures of the rooms/restaurant and also a description of the services . 

Ø   Another way to promote the business is  by contacting local newspaper , internet newspaper and also tourism magazines . We will also try to get the local radios and internet radios to promote our new hotel .

Ø    We will also contact travel agencies that handles groups of foreign people and websites that handles tourism ( e.g. booking.com)

Competition in the area

In this field the competition is fierce given by the increase of the tourism industry and by the better services offered.

Most of the competition comes from the hotels located in the cities that are in the area . This is a major advantage but also a big disadvantage. Also the services they offer are more diversified and with higher standards but out hotel will offer clients a place where they can retreat and run from a busy city life. Building a warm atmosphere where you will feel like home, adopting an friendly approach   will be our main target and the client won’t be treated as possible income but he will be treated as ‘family’.

Distribution

The services will be based on a booking system , the room will be  available from 14.00 on arrival and the checkout will be done at 12.00 on the day the client leaves .

The company also wants to collaborate with tourism agencies and the services will be based on the contract that we will sign with the agencies.

The accommodation will be offered with breakfast included but there will be options to include lunch/dinner in the package .

  1. Marketing strategy

 

 

Our strategy is to build a solid image to ensure de fidelity of our costumers .

We aim to identify and use everything that is new and also use what nature provides .

The main objectives are as follows :

  • Building a brand
  • Establishing long term relationship with out suppliers
  • Wining the fidelity of the clients

Following the SWOT review we can conclude the following :

Advantages :

  • The variety of the services offered
  • The company will have loyal costumers
  • Trained personnel or in the process of getting trained („in house training”);
  • We aim to keep the cash flow and the profit on a positive line
  • We aim to build long term relationship with the supplier of services

     Disadvantages :              

    • An increase or the offer for accommodation in the area
    • In the first years of business we will depend on supply companies

    Opportunities  :

    • The development of potential of other tourism businesses in the area
    • We will identify new potential clients
    • New government laws in favour of tourism

    Threats :

    • Competition in the area is increasing
    • Workforce leaving Romania to go work in other EU countries
    • shortage of skilled labour force

    As a strategy we aim to use the opportunities to consolidate the advantages and to reduce the impact of the disadvantages in the SWOT review through the following :

    • Creating a brand that people can trust
    Ø  Attacking the priority of all segments of the market corresponding to the activity undertaken
    • Improving trade opportunities;
    • Customer loyalty by negotiating favourable clauses in contracts
    • The company will also pursue a strategy of strengthening its market position by raising the quality of services provided;
    • Maintaining a correct position on the market, the financial plan including higher costs for implementation of the marketing strategy;


    The Company will follow and will treat separately, depending on the importance of everyone in the activity of his business, all the main elements that define the marketing strategy. Such elements will be as follows:

                    Product Policy - This policy relates to both environmental requirements and social-economic achievements and trends manifesting the other competitors on the market. Component of the marketing mix, product policy involves many and complex activities. Outside material needs, physiological, modern consumer demands manifest social, aesthetic, psychological, etc., hence the fact that the tourism product consists of a complex of services and goods, in which the first prevail, but only reunited ensure the unitary character of the tender. Product policy practiced by us will be based primarily on identifying ways to association tourism product and opportunity offered by numerous symbols located in the area, likely to favor recognition of the company and to render it a distinct identity in relation to the competition. These symbols are as follows: uniqueness of natural resources (beauty of the landscape, climate conditions, historical sites, etc.)
    traditional cuisine, the atmosphere in which they were consumed, the hospitality of its residents, etc

                   
                   Pricing Policy - Among the product, the price enrol between policy fundamentals of marketing. Its importance is even greater as, unlike other variables of the marketing mix, designing and carrying out a policy of price does not involve financial and material efforts. The objective of maximizing profit, we  will not practice high prices, contrary to enlarging the market and increase its market share, now will practice market average prices, as higher turnover, ensure the rule, getting significant profits. Price policy practiced by us will also take into account the intensity of tourist traffic in the area, the scale of demand in different calendar periods (higher price in full season and lower prices during the off season), depending on the customer segments targeted (prices applied to individual tourists can be different from those applied in the case of organized tourism, providing discounts for tourists accompanied by children, pupils and students, etc.

    Promotion and communication policy - Communication marketing is part of the marketing mix that shows great importance to the work of tourism both in strategic and operational point of view.

     

    Also the scope of communication strategy will be:

    • To increase the turnover
    • To create a favourable image for the company, the brand;
    • To inform existing and future clients

      Selling methods

       

      No other aspect of the business is more important than that of determining the modality to achieve effective sale. Any business is designed to obtain profit from the sale of its products or services. How it is done for the product to reach the end user (method of sale and distribution) is essential. Sales methods practiced by us are the following:

                     

      Ø  Products will be sold through direct marketing company having regular contact with customers;
    • Ø  Products will be sold through travel agents;
    • Ø  The sale will be done through commercial representatives of some prestigious national and international companies (tour operators);
    • ØThe company will track the distribution methods of the competition
    • Financial Plan
      No Name Value VAT Value including VAT
      Construction  Costs
      1 Design  £                10,000.00  £    2,000.00  £                    12,000.00
      2 Structural works including foundations  £                90,000.00  £  18,000.00  £                  108,000.00
      3 Finishes  £                24,000.00  £    4,800.00  £                    28,800.00
      4 Electrical Instalations  £                18,000.00  £    3,600.00  £                    21,600.00
      5 Water Instalations  £                24,000.00  £    4,800.00  £                    28,800.00
      6 Heating/Cooling Instalations  £                36,000.00  £    7,200.00  £                    43,200.00
      7 TV/Media/Internet Instalations  £                  6,000.00  £    1,200.00  £                      7,200.00
      8 Landscaping costs  £                  5,000.00  £    1,000.00  £                      6,000.00
      9 Pathways  £                  1,500.00  £        300.00  £                      1,800.00
      10 Car Park costs  £                  6,000.00  £    1,200.00  £                      7,200.00
      11 Animal Farm costs  £                20,000.00  £    4,000.00  £                    24,000.00
      12 Vegetable garden costs  £                15,000.00  £    3,000.00  £                    18,000.00
      Sub-total  £             255,500.00    £                  306,600.00
      Equipment
      1 Pellet Boiler system  £                  8,000.00  £    1,600.00  £                      9,600.00
      2 Sollar panels system  £                  7,500.00  £    1,500.00  £                      9,000.00
      3 T1c electrical panel, fully equipped  £                  1,000.00  £        200.00  £                      1,200.00
      4 TEE1,TEM electrical panel, fully equipped  £                  3,500.00  £        700.00  £                      4,200.00
      5 Fire/ Smoke detection system  £                  3,000.00  £        600.00  £                      3,600.00
      Sub-total  £                23,000.00    £                    27,600.00
      Furnishings
      1 Tea tables in rooms  £                  2,500.00  £        500.00  £                      3,000.00
      2 Reception couch  £                      600.00  £        120.00  £                          720.00
      3 Reception arm-chairs  £                      600.00  £        120.00  £                          720.00
      4 Reception Tea Table  £                      250.00  £          50.00  £                          300.00
      5 Shoes stand  £                  1,500.00  £        300.00  £                      1,800.00
      6 Hangers  £                  1,650.00  £        330.00  £                      1,980.00
      7 TV-Stand  £                  1,500.00  £        300.00  £                      1,800.00
      8 Nightstand  £                  2,000.00  £        400.00  £                      2,400.00
      9 2 person beds (incl. matress)  £                  8,000.00  £    1,600.00  £                      9,600.00
      10 Arm-chairs in Room  £                  4,000.00  £        800.00  £                      4,800.00
      11 Restaurant tables  £                  5,250.00  £    1,050.00  £                      6,300.00
      12 Restaurant chairs  £                  9,000.00  £    1,800.00  £                    10,800.00
      13 Bar chairs  £                      750.00  £        150.00  £                          900.00
      14 Bar  £                  1,500.00  £        300.00  £                      1,800.00
      15 Reception desk  £                  1,500.00  £        300.00  £                      1,800.00
      16 Kitchen furniture  £                  2,500.00  £        500.00  £                      3,000.00
      Sub-total  £                43,100.00    £                    51,720.00
      Room facilities
      1 TV  £                  2,500.00  £        500.00  £                      3,000.00
      2 Lamp  £                      500.00  £        100.00  £                          600.00
      3 Pillows  £                      300.00  £          60.00  £                          360.00
      4 Table cover  £                      150.00  £          30.00  £                          180.00
      5 Bed covering  £                  2,000.00  £        400.00  £                      2,400.00
      6 Towels  £                  1,200.00  £        240.00  £                      1,440.00
      7 Window curtains  £                  1,800.00  £        360.00  £                      2,160.00
      Sub-total  £                  8,450.00    £                    10,140.00
      Kitchen Equipment
      1 Freezer  £                      900.00  £        180.00  £                      1,080.00
      2 Cooker  £                  1,500.00  £        300.00  £                      1,800.00
      3 Stainless steel  table  £                      600.00  £        120.00  £                          720.00
      4 Coffee machine  £                  1,000.00  £        200.00  £                      1,200.00
      5 Microwave   £                      600.00  £        120.00  £                          720.00
      6 Kitchen robot  £                      500.00  £        100.00  £                          600.00
      7 Blender  £                      100.00  £          20.00  £                          120.00
      8 Dish washer  £                      800.00  £        160.00  £                          960.00
      9 Sink  £                      350.00  £          70.00  £                          420.00
      10 Slicer  £                      500.00  £        100.00  £                          600.00
      11 Fryer  £                      400.00  £          80.00  £                          480.00
      12 Grill  £                      800.00  £        160.00  £                          960.00
      13 Stainless steel rack  £                      600.00  £        120.00  £                          720.00
      14 Pots/Pans  £                      900.00  £        180.00  £                      1,080.00
      Sub-total  £                  9,550.00    £                    11,460.00
      Other equipment
      1 Vacuum cleaner  £                      200.00  £          40.00  £                          240.00
      2 Washing Machine  £                      600.00  £        120.00  £                          720.00
      3 Iron  £                      300.00  £          60.00  £                          360.00
      4 Phones  £                      550.00  £        110.00  £                          660.00
      5 Reception PC/Laptop  £                      250.00  £          50.00  £                          300.00
      Sub-total  £                  1,900.00    £                      2,280.00
               
      Grand Total  £  341,500.00    £     409,800.00
    • The difference given by what we need and what is already planned to be required is given by the raw materials required for cooking, animals required in the farm (cows, chickens, turkeys, pigs, horses etc.) , electrical/water connections , local taxes etc.

      1. Duration of works

       

       

      The planned works will go on for an approximate period of 6 - 8 months after we managed to gather the money required .

      The first step will be to buy the land needed. As mentioned above we still haven’t decided on a location because we are still checking the market but we do have indicative figures that will be presented in the financial information.    

      The second step will be to build the actual Hotel and to be able to start the Project we will need permits required under the Romanian Law. The Project design will be carried out by a authorised Architect Office from Romania and we do expect to receive the Permit to start in works in 8 – 10 months.

      The starting point in obtaining the permit will be to obtain the Urbanism Certificate. The first step will be to issue the Land Plans to Office of Cadastre and Land Registration . The next paper work will have to be submitted : Standard Form, Cadastral Plans of the land . The permits required can be grouped based on the issuers : Utilities providers , Telecom Networks (if there are any that have equipment on the Land ) , environmental permits etc.  

      After the Land is bought and all the permits are acquired the construction of the Hotel can start . The actual build will be executed with good quality inland materials.  

       

       

       

       

      1. Founding sources

       


      The investment will be financed from:

      • Crowdfunding - £ 300.000,00
      • EU Funds - £200.000,00

       

       

       

       

      Cash Flow ( first 5 years)

      No.

      Unit

      Price/Unit

      Year 1

      Year 2

      Year 3

      Year 4

      Year 5

      Accommodation

      Room

       £       65.00

       £  12,870.00

       £  21,060.00

       £  30,420.00

       £  38,610.00

       £  39,780.00

      Restaurant

      Person

       £       20.00

       £    3,960.00

       £    6,480.00

       £    9,360.00

       £  11,880.00

       £  12,240.00

      Other services

      Person

       £       10.00

       £    1,980.00

       £    3,240.00

       £    4,680.00

       £    5,940.00

       £    6,120.00

    • Average sale price (No. VAT included)  :

      • Accommodation £65 / room
      • Restaurant               £20 / person
      • Other Services              £10 / person

Profit and Loss ( first 5 years)

No.

Unit

Price/Unit

Year 1

Year 2

Year 3

Year 4

Year 5

Accommodation

Room

 £       65.00

 £  12,870.00

 £  21,060.00

 £  30,420.00

 £  38,610.00

 £  39,780.00

Restaurant

Person

 £       20.00

 £    3,960.00

 £    6,480.00

 £    9,360.00

 £  11,880.00

 £  12,240.00

Other services

Person

 £       10.00

 £    1,980.00

 £    3,240.00

 £    4,680.00

 £    5,940.00

 £    6,120.00

Total

 

 

 £  18,810.00

 £  30,780.00

 £  44,460.00

 £  56,430.00

 £  58,140.00

 

Costs - Operational expenses (first 5 years)

No

Name

Year 1

Year 2

Year 3

Year 4

Year 5

1

Raw materials and consumables

 £    3,500.00

 £     4,500.00

 £    5,000.00

 £    5,500.00

 £    6,000.00

2

Energy and water

 £    1,500.00

 £     1,550.00

 £    1,600.00

 £    1,650.00

 £    1,650.00

3

Expenditure on goods

 £        750.00

 £     1,000.00

 £    1,250.00

 £    1,500.00

 £    1,750.00

4

Expenditure on staff

 £    7,200.00

 £     7,920.00

 £    8,640.00

 £    9,360.00

 £  10,080.00

5

Expenditure on social security and welfare

 £        500.00

 £         700.00

 £       900.00

 £    1,100.00

 £    1,150.00

6

Depreciation expense

 £        125.00

 £         125.00

 £       125.00

 £        125.00

 £        125.00

7

Other operating expenses

 £    1,000.00

 £     1,000.00

 £    1,000.00

 £    1,000.00

 £    1,000.00

Total

 £  14,575.00

 £   16,795.00

 £ 18,515.00

 £  20,235.00

 £  21,755.00

As you can see in the first 3 years there will be minimal investments done from the profit but going forward there will be more and more money invested to satisfy all the needs of customers.