BUSINESS MASTER PLAN for Development and Construction of a Ski Center in the Galičica National Park
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BUSINESS MASTER PLAN FOR Development and Construction of a Ski Center 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 ____________________________________________________ 74 Page 4 of 161 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA 3.3.1 Regional competition overview ________________________________________ 74 3.3.2 Brief assessment of regional markets __________________________________ 84 3.4 CONCLUSIONS OF MARKET ANALYSIS________________________________________ 85 3.5 MARKET POTENTIAL ESTIMATION ___________________________________________ 86 3.5.1 Assumptions _________________________________________________________ 86 3.5.2 Market potential 2013 ________________________________________________ 87 3.5.3 Market potential 2023 ________________________________________________ 89 3.6 KEY CONSLUSIONS AND RECOMMENDATIONS ________________________________ 89 4 MARKETING STRATEGY ____________________________________________ 93 4.1 STRATEGIC STRONGHOLDS _________________________________________________ 93 4.1.1. Introduction__________________________________________________________ 93 4.1.2. Strategic strongholds _________________________________________________ 93 4.2. MARKETING STRATEGY _____________________________________________________ 96 4.2.1. Market and competitive positioning ___________________________________ 96 4.2.2. System of experiences ________________________________________________ 97 4.2.3. Elements of differentiation ____________________________________________ 99 4.2.4. Unique selling proposition (USP)______________________________________ 100 4.3. PRODUCTS AND MARKETS _________________________________________________ 101 4.3.1. Tourism products and product features ______________________________ 101 4.3.2. Target markets ______________________________________________________ 105 5 CONCEPT AND BUSINESS MODEL ___________________________________ 109 5.1 GALIČICA MOUNTAIN RESORT CONCEPT ____________________________________ 109 5.2 CONCEPT AND SPACE ALLOCATION FOR THE FIRST DEVELOPMENT PHASE ____ 112 5.2.1. Gradište location ____________________________________________________ 112 5.2.2. Upper Peštani location _______________________________________________ 116 5.2.3. Other concept considerations – Oteševo connection and development__ 117 5.3 business and management model __________________________________________ 118 5.3.1. Introduction ________________________________________________________ 118 5.3.2. Project development – foundation of development company __________ 118 5.3.3. Managing resort operations _________________________________________ 122 6 FINANCIAL EVALUATION __________________________________________ 125 6.1 INVESTMENT VOLUME AND TIME SCHEDULE ________________________________ 125 6.1.1 Scenario 1 - Investments ____________________________________________ 125 6.1.2 Scenario 2 - Investments ____________________________________________ 128 6.2 FINANCING MODEL ________________________________________________________ 129 Page 5 of 161 © 2013 Horwath HTL MASTER PLAN SKI CENTER GALIČICA 6.2.1 Scenario 1 – Financing model ________________________________________ 130 6.2.2 Scenario 2 – Financing model ________________________________________ 131 6.3 OPERATING PROJECTIONS __________________________________________________ 133 6.3.1 Methodology ________________________________________________________ 133 6.3.2 Operational Assumptions and Projections _____________________________ 134 6.3.2.1 Scenario 1 – Operations and projections _______________________________ 134 6.3.2.2 Scenario 2 – Operations and projections _______________________________ 146 6.4 FINANCIAL EVALUATION ___________________________________________________ 152 6.4.1 Scenario 1 - Financial evaluation _____________________________________ 152 6.4.2 Scenario 2 - Financial evaluation _____________________________________ 153 6.4.3 Scenario 3 – As in Scenario 1 with only phase 1 development - Financial evaluation __________________________________________________________ 155 6.4.4 Scenario 4 – As in Scenario 2 with only phase 1 development - Financial evaluation __________________________________________________________ 156 6.4.5 Scenario 5 – As in Scenario 1 with hotel management companies - Financial evaluation __________________________________________________________ 156 6.4.6 Scenario 6 – As in Scenario 1 with extension of the development to Prespansko area - Financial evaluation _______________________________ 157 6.5 ECONOMY EFFECTS ________________________________________________________ 158 7 CONCLUSION AND RECOMMENDATIONS ____________________________ 160 Page 6 of 161 © 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