Investors are vital to your hotel development and without them sustainability it a moot point. However, in order to get these investors, you will need to analyze your sustainability. Here are three key questions that must be asked and analyzed throughout the planning and development stages of a successful project:
- Case Studies: What projects have been done like that which is proposed? Have they worked? If so, how. If not…why?
- Costs & Returns: The numbers don’t lie. Try to ascertain comparable project development costs (hard and soft) and returns (IRRs) and an estimate of when the project stabilized. See how this compares with the subject development.
- Thought Leadership: How sustainable and forward thinking: Were the comparable projects merely green-washed conventional projects or were they truly thought-leading and breaking new turf with regard to environmental, social and economic impact?
Answers to these are often not easy to find, as the data is either spread worldwide or simply not published or available. However, you need to consider answers to these in your strategic plan for development and sustainability and be ready with concrete, supportable numbers and data to present to potential investors. Never think they will not do their own research and always try to anticipate their questions (with answers) even before they are asked.
Regardless of how much your project might break new turf and “save the planet”, remember this: Your investors want to make money so you need to show how this is possible. Know your market and what it needs and how what your hotel project will provide to meet this need. Forward thinking is fantastic, but your creative vision must meet the needs of the market (now and in the future). Never overshoot your audience.
That said…be ready to talk sustainability – long term! Know the plan and how you will be achieving it with your design and hotel plan. Anticipate the questions your potential investors will ask. This way you are ready with the answers and don’t seem that you are not ready for any scenario. Your prospective investors want to feel secure in the decision. This is achieved by your showing confidence in your plan.
I must repeat: A savvy investor will ask the tough questions. Be ready for them. Answer them before they are asked.
Lastly, when we say “analyze to capitalize” we mean that you need to a continual REALITY CHECK. Take a look at your plans, your design, your sustainability, and anticipate issues, problems, questions, and longevity matters having to do with the sustainability of your hotel as well as the sustainability of what the investors are investing in overall. Critically analyze and be ready to give the potential investor what he needs to make an informed decision. Be the expert in the room and know your subject matter cold.
While your hotel project will not be the best investment for every prospective investor, it will likely be the right investor for the RIGHT investor. Know the type of investor you are looking for. Research what projects they have invested in , and their goals. That way you will know if they would be interested in what you have to offer. Then capitalize on this to secure that investor…and the deal.
Until Next Time,
Robert Colin Bryant - Founder, TBG Innovative Ltd.
TBG Innovative specializes in the planning & development of international 5 star hotels, blending real estate, branding, master planning, and construction to create “great destinations”. To learn more about TBG Innovative visit us at www.tbginnovative.com