F Hotel Business Model Selection And Risk Problem Research

With the development of market economy, the hotel industry will face increasingly fiercecompetition; select the appropriate mode of operation is particularly important for the survivaland development of the hotel. The owner of a hotel in Guangzhou City in the case of lack ofhotel operations experience and qualification of construction want to enter Star hotel industry,and not only serve the market with guest rooms, restaurant and office rental, but also achievethe goal to maintain the original value of the assets and its increment. This paper will providealternative business model for this project (hereinafter short for “F hotel”), and select certainfinancial indicators in-depth analysis of the pros and cons of each model to provide sufficientinvestment information for the owners.This paper, on the basis of comparative analysis of domestic and foreign common-starhotel business model, discusses the overview of the development of the BOT model, as wellas the BOT model in the hotel industry. Based on application of analysis methods such asMichael Porter’s Five Forces Model, SWOT model, financial net present value and internalrate of return analysis, Cost-volume-profit analysis, it analyzes the macro environment in thehotel industry, the competitive environment, the development trend and the return oninvestment of F hotel.Macro environment and competitive analysis shows that, although the global economy isfacing downward pressure and domestic hotel supply growth substantially, but the profit ofdomestic star hotel industry which has higher threshold is the best, along with China’seconomic boom continue, mass market demand will be released in the future. Therefore, it isa better market opportunities for F hotel. The owner of F hotel’s goal is having the value ofassets increased. The way-out is operate the hotel as soon as possible for the sake of deducethe loss of unused land.Alternative management plan, according to the financial return on investment analysisand probability analysis results recommend the use of the BOT model (IRR=10.3%). Thebreakeven analysis shows that the BOT mode of operation of this project has a high safetymargin (the margin of safety greater than30%).Also, this paper analyzes the risks of F hotel comprehensively during its’ implementationof BOT model. Some risk analysis and their preventive measures are carried out on creditors,partners and entrusted operators, also on investor’s selection, contracting, secret leakage andother accidents.