BUSINESS MASTER PLAN for Development and Construction of a Ski Cente R in the Galičica National Park
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BUSINESS MASTER PLAN FOR Development and Construction of a Ski Cente r in the Galičica National Park AD MEPSO d.d. Orce Nikolov b.b. 1000 SKOPJE MASTER PLAN SKI CENTER GALIČICA INTRODUCTION DISCLAIMER Our study and report are based on assumptions and estimates that are subject to uncertainty and variation. In addition, we have made assumptions as to the future behaviour of consumers and the general economy, which are uncertain. This Report is for your internal purposes and for submission to strategic partners and potential creditors of the project. Any use of the Report must include the entire content of such report in the form delivered to you. No portion or excerpts thereof may be otherwise quoted or referred to in any offering statement, prospectus, loan agreement, or other document unless expressly approved in writing by Horwath HTL. Reproducing or copying of this Report may not be done without our prior consent. MASTER PLAN SKI CENTER GALIČICA © COPYRIGHT 2014 by HORWATH HTL All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of Horwath HTL or a license permitting restricted copying. This publication may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without prior consent of Horwath HTL. MASTER PLAN SKI CENTER GALIČICA TABLE OF CONTENTS 1 ASSIGNMENT AND PROCEDURES _____________________________________ 10 1.1 Assignment ________________________________________________________________ 10 1.2 Procedures ________________________________________________________________ 10 2 SITUATION ANALYSES _______________________________________________ 13 2.1 MACEDONIA _______________________________________________________________ 13 2.1.1 General facts, geography _____________________________________________ 13 2.1.2 Traffic access ________________________________________________________ 22 2.1.3 Economic environment _______________________________________________ 26 2.2 GALIČICA AREA ____________________________________________________________ 36 2.2.1 Ohrid municipality - general facts _____________________________________ 36 2.2.2 Ohrid History and culture _____________________________________________ 37 2.2.3 Economy _____________________________________________________________ 42 2.2.4 Resen municipalities - general facts ___________________________________ 43 2.2.5 History and culture ___________________________________________________ 44 2.2.6 Economy _____________________________________________________________ 44 2.2.7 Regions Infrastructure and current planning framework ________________ 45 2.3 CONSLUSIONS OF THE SITUATION ANALYSIS _________________________________ 46 3 MARKET ANALYSES __________________________________________________ 49 3.1 MACEDONIA TOURISM AND HOTEL MARKET _________________________________ 49 3.1.1 Accommodation supply _______________________________________________ 49 3.1.2 Key attractions and destinations ______________________________________ 54 3.1.3 Demand _____________________________________________________________ 56 3.1.4 Macedonia mountain centres __________________________________________ 66 3.1.5 Performance _________________________________________________________ 67 3.2 OHRID AND RESEN MARKET _________________________________________________ 68 3.2.1 Accommodation supply _______________________________________________ 68 3.2.2 Demand _____________________________________________________________ 71 3.2.3 Performance _________________________________________________________ 74 3.3 COMPETITION ANALYSIS ____________________________________________________ 75 3.3.1 Regional competition overview ________________________________________ 75 3.3.2 Brief assessment of regional markets __________________________________ 85 3.4 CONCLUSIONS OF MARKET ANALYSIS ________________________________________ 86 Page 4 of 172 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA 3.5 MARKET POTENTIAL ESTIMATION ___________________________________________ 87 3.5.1 Assumptions _________________________________________________________ 87 3.5.2 Market potential 2013 ________________________________________________ 88 3.5.3 Market potential 2023 ________________________________________________ 90 3.6 KEY CONSLUSIONS AND RECOMMENDATIONS ________________________________ 90 4 MARKETING STRATEGY ______________________________________________ 94 4.1 STRATEGIC STRONGHOLDS _________________________________________________ 94 4.1.1. Introduction __________________________________________________________ 94 4.1.2. Strategic strongholds _________________________________________________ 94 4.2. MARKETING STRATEGY _____________________________________________________ 97 4.2.1. Market and competitive positioning ___________________________________ 97 4.2.2. System of experiences ________________________________________________ 98 4.2.3. Elements of differentiation ___________________________________________ 100 4.2.4. Unique selling proposition (USP) _____________________________________ 101 4.3. PRODUCTS AND MARKETS _________________________________________________ 102 4.3.1. Tourism products and product features ______________________________ 102 4.3.2. Target markets ______________________________________________________ 106 5 CONCEPT AND BUSINESS MODEL ____________________________________ 110 5.1 GALIČICA MOUNTAIN RESORT CONCEPT ____________________________________ 110 5.2 CONCEPT AND SPACE ALLOCATION FOR THE FIRST DEVELOPMENT PHASE ____ 113 5.2.1. Gradište location ____________________________________________________ 113 5.2.2. Upper Peštani location _______________________________________________ 117 5.2.3. Other concept considerations – Oteševo connection and development _ 118 5.3 business and management model __________________________________________ 119 5.3.1. Introduction ________________________________________________________ 119 5.3.2. Project development – foundation of development company __________ 119 5.3.3. Managing resort operations _________________________________________ 123 6 FINANCIAL EVALUATION ____________________________________________ 126 6.1 INVESTMENT VOLUME AND TIME SCHEDULE ________________________________ 126 6.1.1 Scenario 1 - Investments ____________________________________________ 127 6.1.2 Scenario 2 - Investments ____________________________________________ 130 6.2 FINANCING MODEL ________________________________________________________ 131 6.2.1 Scenario 1 – Financing model ________________________________________ 131 6.2.2 Scenario 2 – Financing model ________________________________________ 133 6.3 OPERATING PROJECTIONS __________________________________________________ 135 Page 5 of 172 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA 6.3.1 Methodology ________________________________________________________ 135 6.3.2 Operational Assumptions and Projections _____________________________ 135 6.3.2.1 Scenario 1 – Operations and projections _______________________________ 136 6.3.2.2 Scenario 2 – Operations and projections _______________________________ 148 6.4 FINANCIAL EVALUATION ___________________________________________________ 154 6.4.1 Scenario 1 - Financial evaluation _____________________________________ 154 6.4.2 Scenario 2 - Financial evaluation _____________________________________ 156 6.4.3 Scenario 3 –Only phase 1 development - Financial evaluation __________ 157 6.4.4 Scenario 4 – Only phase 1 development without any accommodation in Upper Peštani - Financial evaluation __________________________________ 158 6.4.5 Scenario 5 – As in Scenario 1 with hotel management companies - Financial evaluation __________________________________________________________ 158 6.4.6 Scenario 6 – Calculation of the extension to Prespansko lake area ______ 159 6.5 ECONOMY EFFECTS ________________________________________________________ 167 7 CONCLUSION AND RECOMMENDATIONS ____________________________ 170 Page 6 of 172 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA LIST OF ABREVIATIONS, GLOSSARY average achieved rate per room: rack rate ADR Average Daily Rate after deduction of VAT, discounts, etc. av. average DOF Double Occupancy Factor average number of guests per room occupied e.g. for example (exempli gratia) Earnings before Interest, operational result after deduction of EBITDA Income Tax, Depreciation and management fees and fixed charges Amortization etc. et cetera Frequent Independent F.I.T. Traveller F&B Food & Beverage movable furniture, fixtures or other Furniture, Fixtures & FF&E equipment which have no permanent Equipment connection to the structure of the building GDA Gross Developed Area GDP Gross Domestic Product operational result before management fees GOP Gross Operating Profit and fixed charges Gross Operating Profit per GOPPAR Available Room KPIs Key Performance Indicators Meetings, Incentives, overall term to describe the meetings & MICE Congresses, Events congress market NDA Net Developed Area percentage of rooms occupied in relation to Occ. Occupancy Rate number of operating days (or 365 days) p.a. Per Annum per year Rev. Revenues total room revenues divided by number of RevPAR Revenue per Available Room total available room nights SOP Standard Operating Procedure Page 7 of 172 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA Tot. Rev. Total Revenues USP Unique Selling Proposition