Do you want to start resorts business?

Do you want to start your own resort? If yes then you should definitely start it because a resort business can prove extremely profitable and can provide a good return on investment, provided that you plan and execute it properly. Before starting this venture, you will have to do a thorough research so that you may get to know, how to open a resort. Other than that, you will also have to prepare a comprehensive business plan which will not only help you in startup but will also be useful in deciding your business strategies over the next few years. For your facilitation, we are providing the business plan of a resort startup, ‘Heaven’s Inn.

Executive Summary

2.1 The Business

Heaven’s Inn will be a dream resort located at 10 minutes’ drive from Mitchell’s Cove Beach in Santa Cruz, California.

2.2 Management

Heaven’s Inn will be owned and operated by Anna Jill, who has been associated with various resorts and hotels throughout the United States for the last 10 years. Being experienced in this industry, Anna knows how to start a resort business and make it successful.

2.3 Customers

Our customers will primarily be the tourists visiting Santa Cruz. We will serve them by providing a dream lodging and unparalleled service.

2.4 Target of the Company

Our target is to become the best resort of Santa Cruz within 5 years of our launch.

Resorts Business Plan - 3 Years Profit Forecast

Company Summary

3.1 Company Owner

Heaven’s Inn will be owned and operated by Anna Jill. Anna has served at many senior positions in various resorts and hotels throughout the United States. She is known for her flawless management and sharp business acumen.

3.2 Why the Business is being started

Anna has always wished to create a dream location for tourists and through her venture, she aims to build an out-class resort with the best customer service. Her resort, with its high-end luxurious facilities, will be the dream location for every tourist out there.

3.3 How the Business will be started

You have to consider all startup requirements before you think about how to start your own resort. Anna has procured a beautiful building which was previously used as a hotel for starting her resort. The financial experts have forecasted the following costs for the start-up:

Resorts Business Plan - Startup Cost

The detailed start-up requirements are as follows:

Start-up Expenses 
Legal$55,300
Consultants$0
Insurance$32,750
Rent$32,500
Research and Development$32,750
Expensed Equipment$32,750
Signs$1,250
TOTAL START-UP EXPENSES$187,300
Start-up Assets$0
Cash Required$332,500
Start-up Inventory$32,625
Other Current Assets$232,500
Long-term Assets$235,000
TOTAL ASSETS$121,875
Total Requirements$245,000
START-UP FUNDING$0
START-UP FUNDING$273,125
Start-up Expenses to Fund$11,875
Start-up Assets to Fund$15,000
TOTAL FUNDING REQUIRED$0
Assets$23,125
Non-cash Assets from Start-up$18,750
Cash Requirements from Start-up$0
Additional Cash Raised$18,750
Cash Balance on Starting Date$21,875
TOTAL ASSETS$0
Liabilities and Capital$0
Liabilities$0
Current Borrowing$0
Long-term Liabilities$0
Accounts Payable (Outstanding Bills)$0
Other Current Liabilities (interest-free)$0
TOTAL LIABILITIES$0
Capital$0
Planned Investment$0
Investor 1$332,500
Investor 2$0
Other$0
Additional Investment Requirement$0
TOTAL PLANNED INVESTMENT$695,000
Loss at Start-up (Start-up Expenses)$313,125
TOTAL CAPITAL$251,875
TOTAL CAPITAL AND LIABILITIES$251,875
Total Funding$255,000

Services for customers

Before thinking about how to build a resort, you must decide what services will you provide to your customers since the planning of many subsequent things depend on your services.
Heaven’s Inn will provide ten 2-bedroom units along with attached washrooms, laundry facilities, fully-equipped kitchens and parking facility. The resort also will offer a common outdoor swimming pool along with various other facilities. Our primary services are as follows:

  • 24-hour Room Service
  • 24-hour Medical Service
  • Outside Swimming Pool
  • Café and Lobby Bar
  • Concierge Service
  • Baby Sitting Service
  • Laundry Service
  • Laptop and Computer Rental Service
  • Conference Meeting and Private Dining Service
  • Massage, Manicure and Pedicure Service
  • Airport Pick-up and Transfer Service

Marketing Analysis of resorts business

If you don’t know how to make a resort business plan, you can take help from this resort business plan sample. The most important component of effective resorts business plan is its accurate marketing analysis that’s why Anna acquired the services of marketing experts to help her through this phase. It is only after this stage that a good resorts business plan could have been developed. She also went through various resort business plans for getting a hold of the process. After identifying the local market trends in Santa Cruz, the marketing experts and analysts also helped her to select the best site for establishing the resort.
The success or failure of a business totally depends upon its marketing strategy which can only be developed on the basis of accurate marketing analysis. Marketing analysis is a must-do thing before you move on to develop a business plan for hotel and resort because the planning of many subsequent components depends on it. Therefore, it must be considered before developing a business plan for resort development.

5.1 Market Trends

The global resort and hotel industry generate more than $550 billion in revenue as of 2016. The resort and hotel industry is one of the important industries of the United States and has grown annually steadily over the recent years. It generated more than $190 billion in revenue as of 2015. The United States houses some of the world’s most famous city resorts and destinations which contribute significantly to the resorts and hoteling industry of the country. The number of smaller resorts have also increased over the previous years.

5.2 Marketing Segmentation

Our target market is the tourist community that visits Santa Cruz for various purposes. Nearly all of the tourists have sufficient budget for spending on their lodging, therefore, they can easily afford to stay at our resort. Our experts have identified the following type of target audience which can become our future consumers:

Resorts Business Plan - Market Segmentation

These three target groups have different purposes for visiting Santa Cruz and hence have different requirements for their lodging. We can target them only after analyzing their requirements during the stay. The detailed analysis of our target audience is as follows:

5.2.1 Recreational Tourists:

The first group comprises of the recreational tourists who have come to Santa Cruz for recreational and adventurous purposes. This category also includes tourists who have come for sporting, skiing or participating in other similar activities. Nearly half of the tourists visit Santa Cruz for recreational purposes, hence this target group will be the biggest consumer of our services and our marketing policy will be specifically built to target them.

5.2.2 Business Tourists:

The second category comprises of the business tourists who visit Santa Cruz for retreats and company outings. Nearly all of the companies located in the United States organize company retreats once or twice a year to increase team building between their employees and to take a break from the hectic and monotonous office routine. Other than lodging, our resort will provide conference meeting rooms for these tourists and other necessities for organizing their work sessions, team meetings, seminars, workshops, and conferences during their stay.

5.2.3 Medical Tourists:

The third category includes those tourists who visit Santa Cruz for medical purposes. This group mostly comprises of patients and senior citizens who need a change in their environment as a part of their medical treatment. These tourists need special attention, special diet and a 24-hour medical service, all of which will be available at our resort.
The detailed market analysis of our potential customers is given in the following table:

Market Analysis
Potential CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Recreational Tourists45%11,43313,34416,55318,74520,54513.43%
Business Tourists38%22,33432,34443,66552,54466,43210.00%
Medical Tourists17%8,3229,45510,65512,86714,43315.32%
Total100%42,08955,14370,87384,156101,4109.54%

5.3 Business Target

Our main business targets are:

  • To become the best resort of Santa Cruz within 5 years of our launch
  • To achieve the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year
  • To balance the initial cost of the startup with earned profits by the end of the first year

5.4 Product Pricing

Our every bedroom unit will be charged at $200 per night and will have following facilities: high definition LCD TV, DVD/VCR, video on demand, video games, premium music channels, high-speed internet, fireplace, fully-equipped kitchenette, king-sized bed and full-sized sleeper sofa.

Strategy

Sales strategy is an important component of a business plan for small resort. Anna carried out an extensive research about various sales, marketing, and advertising strategies before she moved on to starting a resort business.

6.1 Competitive Analysis

We will have an extremely tough competition ahead of us because Santa Cruz houses many high-class luxury resorts. Still, we hope to stand out due to our competitive rates and exceptional customer service. We will provide all facilities of a luxury resort within the lowest rates in the town. Our second competitive edge will be our unparalleled customer service which will be the best in town. We will treat every customer with utmost respect and make sure that they get more than what they had expected from us.

6.2 Sales Strategy

  • We will market and advertise our resort on social and print media.
  • We will offer online booking and payment services for facilitating customers.
  • We will offer a 25% discount on our services for the first three months of our launch.

6.3 Sales Monthly

Resorts Business Plan - Sales Monthly

6.4 Sales Yearly

Resorts Business Plan - Sales Yearly

6.5 Sales Forecast

Considering our competitive rates and the quality of our services our sales pattern is expected to increase with years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on a yearly basis which are summarized in the column charts:

Resorts Business Plan - Unit Sales

The detailed information about sales forecast, total unit sales, total sales is given in the following table:

Sales Forecast   
Unit SalesYear 1Year 2Year 3
Lodging1,887,0302,680,3202,588,240
Café and Bar802,370815,430823,540
Conference Meeting539,3207702301,002,310
Miscellaneous Services265,450322,390393,320
TOTAL UNIT SALES3,494,1704,588,3704,807,410
Unit PricesYear 1Year 2Year 3
Lodging$140.00$150.00$160.00
Café and Bar$600.00$800.00$1,000.00
Conference Meeting$700.00$800.00$900.00
Miscellaneous Services$650.00$750.00$850.00
Sales
Lodging$2,149,800$2,784,000$3,383,200
Café and Bar$120,050$194,500$268,500
Conference Meeting$50,110$71,600$93,000
Miscellaneous Services$139,350$194,600$249,850
TOTAL SALES
Direct Unit CostsYear 1Year 2Year 3
Lodging$0.70$0.80$0.90
Café and Bar$0.40$0.45$0.50
Conference Meeting$0.30$0.35$0.40
Miscellaneous Services$3.00$3.50$4.00
Direct Cost of Sales
Lodging$989,300$1,839,000$2,679,700
Café and Bar$66,600$119,900$173,200
Conference Meeting$17,900$35,000$52,100
Miscellaneous Services$19,400$67,600$115,800
Subtotal Direct Cost of Sales$1,294,100$1,699,400$2,104,700

Personnel plan

After you have estimated how much does it cost to build a resort, you will have to prepare a personnel plan to estimate how much cost will be incurred on the salaries of the staff.

7.1 Company Staff

Anna will manage the overall operations and will initially hire following people:

  • 1 Accountant for maintaining financial records
  • 2 Sales Executives responsible for marketing and discovering new ventures
  • 4 Chefs for preparing food
  • 15 Service Assistants for undertaking various day-to-day operations
  • 10 Cleaners for keeping the resort in a perfectly cleaned shape and undertaking other cleaning tasks, like laundry
  • 4 Drivers for Airport pick-up and transfer service
  • 2 Masseuse for massage and therapy service
  • 1 Technician for undertaking IT-related tasks
  • 1 Doctor for providing medical service in case of emergency
  • 1 Facility Manager for managing all facilities and equipment of the resort
  • 1 Front Desk Officer for acting as a receptionist
  • 2 Security Officers

7.2 Average Salary of Employees

 Personnel Plan   
Year 1Year 2Year 3
Accountant$44,000$47,000$50,000
Sales Executives$53,000$56,000$59,000
Chefs$66,000$73,000$80,000
Service Assistants$145,000$152,000$159,000
Cleaners$166,000$173,000$180,000
Drivers$550,000$650,000$750,000
Masseuse$410,000$440,000$480,000
Technician$35,000$38,000$41,000
Doctor$44,000$47,000$50,000
Facility Manager$53,000$56,000$59,000
Front Desk Officer$35,000$38,000$41,000
Security Officers$86,000$89,000$92,000
Total Salaries$1,271,000$1,415,000$1,569,000

Financial Plan

Finally, you will have to prepare a financial plan before thinking about how to start a resort. The Heaven’s Inn financial plan outlines the development of the company over the next three years and is specifically developed to achieve the company’s short-term and long-term objectives.

8.1 Important Assumptions

 General Assumptions   
Year 1Year 2Year 3
Plan Month123
Current Interest Rate10.00%11.00%12.00%
Long-term Interest Rate10.00%10.00%10.00%
Tax Rate26.42%27.76%28.12%
Other000

8.2 Brake-even Analysis

Resorts Business Plan - Brake-even Analysis

 Brake-Even Analysis 
Monthly Units Break-even5530
Monthly Revenue Break-even$159,740
Assumptions:
Average Per-Unit Revenue$260.87
Average Per-Unit Variable Cost$0.89
Estimated Monthly Fixed Cost$196,410

8.3 Projected Profit and Loss

 Pro Forma Profit And Loss   
Year 1Year 2Year 3
Sales$309,069$385,934$462,799
Direct Cost of Sales$15,100$19,153$23,206
Other$0$0$0
TOTAL COST OF SALES$15,100 $19,153 $23,206
Gross Margin$293,969$366,781$439,593
Gross Margin %94.98%94.72%94.46%
Expenses
Payroll$138,036$162,898$187,760
Sales and Marketing and Other Expenses$1,850$2,000$2,150
Depreciation$2,070$2,070$2,070
Leased Equipment$0$0$0
Utilities$4,000$4,250$4,500
Insurance$1,800$1,800$1,800
Rent$6,500$7,000$7,500
Payroll Taxes$34,510$40,726$46,942
Other$0$0$0
Total Operating Expenses$188,766$220,744$252,722
Profit Before Interest and Taxes$105,205$146,040$186,875
EBITDA$107,275$148,110$188,945
Interest Expense$0$0$0
Taxes Incurred$26,838$37,315$47,792
Net Profit$78,367$108,725$139,083
Net Profit/Sales30.00%39.32%48.64%

8.3.1 Profit Monthly

Resorts Business Plan - PROFIT MONTHLY

8.3.2 Profit Yearly

Resorts Business Plan - PROFIT YEARLY

8.3.3 Gross Margin Monthly

Resorts Business Plan - GROSS MARGIN MONTHLY

8.3.4 Gross Margin Yearly

Resorts Business Plan - GROSS MARGIN YEARLY

8.4 Projected Cash Flow

Resorts Business Plan - Projected Cash Flow Diagram

 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 3
Cash from Operations
Cash Sales$40,124$45,046$50,068
Cash from Receivables$7,023$8,610$9,297
SUBTOTAL CASH FROM OPERATIONS$47,143 $53,651 $59,359
Additional Cash Received
Sales Tax, VAT, HST/GST Received$0$0$0
New Current Borrowing$0$0$0
New Other Liabilities (interest-free)$0$0$0
New Long-term Liabilities$0$0$0
Sales of Other Current Assets$0$0$0
Sales of Long-term Assets$0$0$0
New Investment Received$0$0$0
SUBTOTAL CASH RECEIVED$47,143 $53,651 $55,359
ExpendituresYear 1Year 2Year 3
Expenditures from Operations
Cash Spending$21,647$24,204$26,951
Bill Payments$13,539$15,385$170,631
SUBTOTAL SPENT ON OPERATIONS$35,296 $39,549 $43,582
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out$0$0$0
Principal Repayment of Current Borrowing$0$0$0
Other Liabilities Principal Repayment$0$0$0
Long-term Liabilities Principal Repayment$0$0$0
Purchase Other Current Assets$0$0$0
Purchase Long-term Assets$0$0$0
Dividends$0$0$0
SUBTOTAL CASH SPENT$35,296 $35,489 $43,882
Net Cash Flow$11,551$13,167$15,683
Cash Balance$21,823$22,381$28,239

8.5 Projected Balance Sheet

 Pro Forma Balance Sheet   
AssetsYear 1Year 2Year 3
Current Assets
Cash$184,666$218,525$252,384
Accounts Receivable$12,613$14,493$16,373
Inventory$2,980$3,450$3,920
Other Current Assets$1,000$1,000$1,000
TOTAL CURRENT ASSETS$201,259 $237,468 $273,677
Long-term Assets
Long-term Assets$10,000$10,000$10,000
Accumulated Depreciation$12,420$14,490$16,560
TOTAL LONG-TERM ASSETS$980 $610 $240
TOTAL ASSETS$198,839 $232,978 $267,117
Liabilities and CapitalYear 1Year 2Year 3
Current Liabilities
Accounts Payable$9,482$10,792$12,102
Current Borrowing$0$0$0
Other Current Liabilities$0$0$0
SUBTOTAL CURRENT LIABILITIES$9,482 $10,792 $12,102
Long-term Liabilities$0$0$0
TOTAL LIABILITIES$9,482 $10,792 $12,102
Paid-in Capital$30,000$30,000$30,000
Retained Earnings$48,651$72,636$96,621
Earnings$100,709$119,555$138,401
TOTAL CAPITAL$189,360 $222,190 $255,020
TOTAL LIABILITIES AND CAPITAL$198,839 $232,978 $267,117
Net Worth$182,060$226,240$270,420

8.6 Business Ratios

 Ratio Analysis    
Year 1Year 2Year 3Industry Profile
Sales Growth4.35%30.82%63.29%4.00%
Percent of Total Assets
Accounts Receivable5.61%4.71%3.81%9.70%
Inventory1.85%1.82%1.79%9.80%
Other Current Assets1.75%2.02%2.29%27.40%
Total Current Assets138.53%150.99%163.45%54.60%
Long-term Assets-9.47%-21.01%-32.55%58.40%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities4.68%3.04%2.76%27.30%
Long-term Liabilities0.00%0.00%0.00%25.80%
Total Liabilities4.68%3.04%2.76%54.10%
NET WORTH99.32%101.04%102.76%44.90%
Percent of Sales
Sales100.00%100.00%100.00%100.00%
Gross Margin94.18%93.85%93.52%0.00%
Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
Advertising Expenses2.06%1.11%0.28%1.40%
Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
Main Ratios
Current25.8629.3932.921.63
Quick25.428.8832.360.84
Total Debt to Total Assets2.68%1.04%0.76%67.10%
Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
Pre-tax Return on Assets64.88%69.75%74.62%9.00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19.20%21.16%23.12%N.A.
Return on Equity47.79%50.53%53.27%N.A.
Activity Ratios
Accounts Receivable Turnover4.564.564.56N.A.
Collection Days9299106N.A.
Inventory Turnover19.722.5525.4N.A.
Accounts Payable Turnover14.1714.6715.17N.A.
Payment Days272727N.A.
Total Asset Turnover1.841.551.26N.A.
Debt Ratios
Debt to Net Worth0-0.02-0.04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120,943$140,664$160,385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0.450.480.51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23.6627.0130.36N.A.
Sales/Net Worth1.681.290.9N.A.
Dividend Payout000N.A.