Development of Hospitality, Tourism or Events Facility

Report plan:

Discuss the key issues and considerations that ought to be included in a feasibility study relating to the development of hospitality, tourism or events facility

Student name: Cheung Ka Yan

Student Number: 40187731

Program: BA / BA (Hons) in Hospitality and Service Management,

Edinburgh Napier University (Part-time)

 Title: Facilities Planning for Hospitality, tourism and Events

The date of submission: 27 Nov 2014

Tutorial: Lawrence Cheung

1. Introduction

1. Background

"The majority of new restaurants opened by first-time operators fail within the first year. Even established chain restaurant companies sometimes open new locations that fail” (Buchanan, 2014). Thus, it is necessary to consider the key factor included in a feasibility study to determine the key issues and considerations for development of restaurant business. The purpose is to estimate the potential for the proposed concept. This is accomplished by examining the market for the concept and the potential return on sales and investment. The purpose of this report is firstly to discover the feasibility study such as location analysis, local market area, competition, and industry trends, financial projections, concept refinement analysis (Davis et al, 2012).

1. Feasibility study

"The feasibility study is concerned with testing those claims and checking how far they are likely to be achievable."(Hassanien, Dale & Clarke, 2010, p.110). According to Ransley & Ingram (2000), "feasibility study helps decision maker determining if the project of facilities should be carried out by impartially assessing the prospect and information of development". Santibanez (2013) comment that to make a decision about the potential success of a concept or plan for a business in a specific location, it is necessary to analysis and gather of a great deal of related information. The feasibility study should be completed after initial concept development and preliminary site selection that make your chances for success.

1.3 Methodology

The paper is based a summarized review of lecture notes, website, textbook, website, journal, government publication, industry report. The research the information in operation of restaurant from book and the definition though the textbook. The license of restaurant find from the website of FEHD department. Some fast casual dining restaurant would be selected as example

1.4 Proposed restaurant

The feasibility study relating of develop a fast casual restaurant. The characteristics of fast-casual restaurant which is not offer full table service, limited-service or self-service format. On the contrary, it provides a higher quality or healthier food instead of frozen or processed food than fast food restaurant. According to DaSilva (2014), "It is a fresh and growing trend positioned between fast food and casual dining relatively". The proposed restaurant will be located at the shopping mall at New Town City in Shatin. Ryan and Chrisler (2003) mention that the restaurant industry and its analysis    should be consider based on the area including location, local market area, competition, trends of industry, financial forecasting and concept refinement. The environment in the casual fast dining business is complex currently, thus, the prospective of industry is imperatively.

2. Main discussion

The briefly discuss the key issues and considerations that arise the property development of concept and planning take account into Concept and Design, Market, Finance, Legislation. For an example of fast casual dining restaurant, chain restaurants like Oliver's Super Sandwiches, Deliverance, and Mix are all fast causal concept.

2.1 Concept and Design

Concept and design can be defines as "normally consists of a service delivered in a purposely-designed property, whose quality, atmosphere, service style and content, supported by a specified operation and management in a specific location, determine price and define the product" (Ransley and Ingram,2004, p5). Kotler (1994) identifies there are three levels or components of the product such as core, tangible and augmented. Hassanien and Dale and Clarke (2010) mentioned that for the core product of fast food industry, the most significant purpose is to satisfy a basic hunger need by consumption of food quickly. Tangible product is the location, quality, brand and so on. And the augmented aspect of product arise that due to similarities in the core and tangible, it include the speed of service, the alternative of nutritional food and so on. Atmospherics is great attending the guests today and built with the restaurant concept (Lewis and Chambers, 1990).

For design of the owner or client, the most significantly expectations and requirements which is comply with all related legislation, the minimize design, construction, operating and maintenance costs; maximize revenue and profit and so on. Design would need to take into account:

The components of external aspects are finish, image, presence, appearance. The components of internal aspects are space planning, form, colour, lighting, audio-visual system, durability, technology, etc. The Elements of Hard dimensions are built environment and soft dimensions are furnishings, fittings, fabrics and decoration. According to The Mix restaurant & Oliver's Super Sandwiches, customer usually choose food from the menu board, then order food at cashier, waiter will deliver the food on your table and enjoy meal in dining area. Their atmosphere is causal with comfortable sofa area and their brand color is also green. There of The Mix is selling special fresh juice and Oliver's Super sandwiches provide wide spectrum of sandwiches.    

2.2 Market

2.2.1 Competitor Analysis

Porter's (1980) analysis that the five forces of Porter including intensity of rivalry, bargaining power of suppliers, threat of substitutes, bargaining power of buyers and threat of new competitors. For example, Oliver's Super Sandwiches location at New Town City shopping mall in Shatin.

i. Threat of New Competitors

When new competitors decide to enter in restaurant business, it will reduce the profits gain from existing business. Thus, production differentiation and loyalty  to existing brands can reduce the threat of new competitors.