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Market and Feasibility Analysis for Hospitality Businesses

This chapter discusses the importance of conducting market and feasibility analyses for existing and new hospitality businesses. It explores techniques for analyzing market demand, economic feasibility, and the strengths and weaknesses of the organization. The chapter also highlights the relationship between market, feasibility, and situation analyses.

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Market and Feasibility Analysis for Hospitality Businesses

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  1. Chapter 5 Analyzing Market Opportunities

  2. Situation Analysis A study of the marketing strengths, weaknesses, opportunities, and threats of an existing business or other type of organization

  3. Market Analysis A study of the potential demand for a new or expanding hospitality or travel business or other organizational type. It determines whether market demand is large enough

  4. Feasibility Analysis A study of the potential demand for and economic feasibility of a business or other organizational type; it includes a market analysis plus four additional steps

  5. Figure 5.1 Relationship of market, feasibility, and situation analyses.

  6. Relationship of the Three Analyses • The relationship among these three techniques is chronological (time) • The situation analysis should build upon the findings of the market or feasibility analysis • Each situation analysis should build upon the previous year’s situation analysis

  7. Difference between a Situation and a Market or Feasibility Analysis A situation analysis determines the strengths and weaknesses of an existing organization or business. Situation and market analyses have the same steps, but in a different order.

  8. Difference between a Situation and a Market or Feasibility Analysis(continued) A market or feasibility analysis investigates a proposed new business and its market potential and economic feasibility. Market and feasibility analyses have the same first six steps, but the feasibility analysis involves four additional steps.

  9. Figure 5.2 Situation and market analyses steps.

  10. Steps in a Situation Analysis Marketing environment analysis Location and community analysis Primary competitor analysis Market potential analysis Services analysis Marketing position and plan analysis

  11. Steps in a Market Analysis Marketing environment analysis Market potential analysis Primary competitor analysis Location and community analysis Services analysis Marketing position and plan analysis

  12. Figure 5.3 The hospitality and travel marketing environment.

  13. Four Additional Steps in a Feasibility Analysis • Pricing analysis • Income and expense analysis • Development cost analysis • Analysis of return on investment and economic feasibility

  14. Figure 5.14 Relationship of market and feasibility analyses.

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