CEO asked Elliott Davis to answer: “What can I expect operationally and financially if we build this? Will people come? What’s the expected return?”
Hospitality owner was looking to diversify existing recreational offerings “on property” by building a new attraction outside of their core business model. This investment would diversify the core business by protecting against seasonality and appealing to a new customer segment, but it also presented significant financial and operational risks.
Customer was looking to understand best practices, lessons learned, and success criteria from other operators in this space.
Visitation models and financial projections were also needed to support initial discussions with capital partners.
Elliott Davis broke the questions into workstreams:
Interviews and benchmarking of target business
- Ongoing operating economics
- Lessons learned
- Operational risks
- Start-up costs
Target customer surveys and focus groups
- Likelihood of visiting
- Attractiveness of concept’s attributes
- Willingness to pay
Pro forma financial statements
- EBITDA contribution / payback
- Capital partner presentations
Delivered robust, 360-degree view of the investment’s risks and potential rewards
- Direct feedback from ~200 potential customers on opportunity via Elliott Davis survey
- Insights from operators of similar concepts via Elliott Davis phone interviews
Provided customer with pro forma financials on the proposed business venture that were informed by competitive benchmarking, market survey, and operations.
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