FINANCIAL FEASIBILITY STUDY OF BERSAMA BOUTIQUE HOTEL AND SPACE

• Main Author: Winanda Rizky Pratama, Hervino
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/46197
• Institution: Institut Teknologi Bandung

Amidst the global macroeconomic turmoil, Indonesia managed to maintain its economic fundamentals at steady economic growth. Indonesia economy growth reached 5.17%, an increase compared to the growth of the previous year recorded at 5.07%. In 2018 the tourism sector which is envisaged from the business field to contribute of 5.66% against gross domestic product (GDP). The tourism industry is a major economic driver for Indonesia. In 2018, travel and tourism contributed IDR 890.43 bn (USD 62.6 billion) and nearly 13 million jobs to the Indonesian economy. Statistics Indonesia (BPS) noted that the number of foreign tourist arrivals (tourists) to Indonesia during 2018 had reached 15.81 million. That number experienced an increase compared to the same period in 2017 of 14.04 million. An increase in the number of foreign tourists visiting, both vacationers and tourists for business trips, will have a positive impact on the hospitality industry. This can be seen from the hotel occupancy rate (TPK) during 2018 amounting to 59.75%, an increase compared to that of 2017 which amounted to 59.53%. In early 2019, Bersama Boutique Hotel and Space development plan had set and estimated to start construction in summer 2020. The business will take position as two-stars boutique hotel with unique concept targeting individual and community group for business and leisure occasion. This project is estimated to use build-operate-transfer (BOT) scheme whilst negotiation is still going. The objective of this study is to analyze total investment needed, profitability, and risks of the project to create suggestion for investment decision. This study will use Discounted Cash Flow (DCF) model and its parameters for analyzing project’s profitability, Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP), and Profitability Index (PI). In order to develop DFC model, author made free cash flow projections using FCFE approach. This approach was used because the project will be fully financed using equity. The financial model was based on many assumptions which are obtained from several perspectives and approaches. Risk analysis conducted using sensitivity analysis, scenario analysis, and Monte Carlo analysis. This study resulted the project is feasible in terms of finance with total investment of IDR 9.2 billion. The project potentially resulting NPV at IDR 3.3 billion and IRR value at 20.38%. Investments will payback in year 6 of business operation with profitability index 1.36. Risk assessment resulting space rent for wedding occasion variables (price and occupancy) are the most influencing variables for NPV changes. Room rate for deluxe type room and construction cost are next variables which influence changing in NPV. In scenario analysis for risk assessment author used changes 40% on variables from sensitivity analysis to determine the NPV for best and worst scenario. From the scenario analysis, worst scenario resulting NPV of IDR (9.6 billion) and best scenario resulting NPV of IDR25.5 billion. Monte Carlo analysis resulting probability to get negative NPV is relatively low (under 10%) using 95% confidence level.