5 Tourism Infrastructure: Development & Finance Flashcards
who invests in touristic infrastructure
- local municipality
- mountain railways
- land owners
- private investors
- real estate players
- project developers /general contractors
Drivers of real estate
Increasing population density
urbanization
increasing complexity of the environment
increasing regulations
shortage of building land
global scarcity of investment opportunities
most important risk of real estate
long tail risk (till you realized your idea things change)
execution risk (investors needed)
political risk
market risk
financial risk (interest rate)
cost risk (be prepared to lose money)
permit risk
process of real estate development
- Idea (idea, size, zoning, market analysis, type of guests)
- the site (site qualification)
- feasibility (how many room/beds, bar ? prices?
- contracts and approvals (costs loads of money and not sure if will succeed, building permission, formal contracts)
- improvements (time plan, constant monitoring, preparation for the market, marketing)
- to the next project (finalization, handover, commissioning, -> next project
economic feasibility
you can budget costs but cant project revenues –> market changes
keep investment into land low
beginning: low investment and high risk
you try to minimize risk as quick as possible
hotels have more operation risks since you sell only a night and not long period.
