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Feasibility study for a proposed hotel in South Lake Tahoe, California
The purpose of this paper was to develop and articulate a feasibility study to purchase and operate a 35 to 65 room hotel in California’s Lake Tahoe area. South Lake Tahoe is in the midst of a rebirth of new or updated hotels, eateries, and breweries. Hotels are being renovated to give a modern, elegant feel while maintaining the history of the buildings and sense of adventure that so many people visit Tahoe for. The paper begins by reviewing the area of South Lake Tahoe and hospitality businesses that are currently operating in the area. Past visitation, surrounding cities and demographics, and nearby attractions are presented as a foundation for a proposed hotel in the subject city. The framework for the feasibility analysis is set by reviewing past occupancy rates and average daily rates statistics for the South Lake Tahoe area and then projecting these figures into the future for a proposed hotel. Furthermore, expenses are estimated to complete proforma financial statements in order to paint a picture of what revenues, expenses, profitability are expected to be year to year and even month to month. A very rough estimation is made to purchase and renovate an existing hotel property. Finally, a conclusion is made on the feasibility of the proposed hotel and next steps, should the project be pursued further.