Feasibility Study to Assess Hotel Accommodation Development

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Feasibility Study to assess Hostel Accommodation Development Consultancy Project

2010
Mr. Hew Tze Yee
Hospitality Excellence Pte. Ltd.
1/10/2010

1.0 Executive Summary
School of Hospitality and Resort Management (SHRM) is one of the private colleges that provide their students with hostel accommodation in Singapore. However, it has been found that the hostel operates as a cost centre instead of profit centre. Thus, it is proposed that the hostel be upgraded to attract more students to stay in the hostel. This project involves the renovation of the bathroom and toilet, the upgraded facilities in both hostel room and public area. The proposed program will be conducted under the close supervision of the school management, with requested funds totaling S$ 2,460. Future maintenance of the project will be possible through appropriations from SHRM management.

2.0 Introduction
School of Hospitality and Resort Management (SHRM) started its operation in 2008. It is owned by the Hospitality Excellence Private Limited. SHRM strategically located at the sub-urban area in Singapore where it provides a great study environment for students. Till today, there are more than 100 students who are pursuing their study at SHRM. In late 2009, SHRM offered hostel accommodation service to their students. SHRM and its hostel share the area with Focus Camp Challenge, an independent leisure centre. Basically, the hostel is divided into two categories. There are 16 units of twin-bedded room and 4 units of six-bedded room. The hostel is currently running at full capacity due to the high demand among their students. The hostel features with number of shared facilities such as bathroom and toilet, washing machine and an open kitchen.

3.0 Problem Statement
As far as we concern, the hostel only act as the core centre which it supports the main business – SHRM, operates under the Hospitality Excellence Private Limited. It has also been found that the hostel is a cost centre rather than a profit centre and it suffered from an average net loss of S$3,800/month. Thus, this proposed project would be beneficial as it could allow the client to turn the hostel into a profit centre. To assess the extent to which the proposed project remedies the problems noted above, it will be necessary to quantify the results to measure the project’s effectiveness. The following are the project objectives: (A) To improve and upgrade the facilities within the hostel. SHRM must improve and upgrade the facilities to create a better living environment for their students. (B) To increase the hostel rental fee.

According to our client, the current rental fee was set based on the actual renovation cost. The profit generated from the hostel rooms is not enough to cover the hostel’s monthly expenditures or either the hostel rental. This resulted in an average loss of S$3,800/month. Thus, it is proposed that the hostel rental fee should be increase to at least cover the monthly expenses. (C) To lower the monthly expenditures by tighten the hostel rules. It has been found that the monthly expenditures are on an increase within the hostel. Thus, hostel rules need to be tightening so that the cost could be lower.

4.0 Situational Analysis
A situational analysis has been conducted to allow us to acquire a better understanding of the hostel’s current situation. The analysis has been divided into two categories: (A) SWOT Analysis

Strength
The hostel is close to the SHRM campus where it is only a 3 minutes’ walk to the school. The convenience accessibility to the campus is the major factor that attracts the students to stay in the hostel. Besides, the hostel is located at sub-urban area. There are no business centers or shopping centers surrounded within the hostel. Thus, it is relatively quiet and it provided student a great study environment. Moreover, the hostel is only open to students who study in SHRM where it invisibly...
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