Table of Content

    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 group business plan, 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 Customers Growth YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 CAGR
    Recreational Tourists 45% 11,433 13,344 16,553 18,745 20,545 13.43%
    Business Tourists 38% 22,334 32,344 43,665 52,544 66,432 10.00%
    Medical Tourists 17% 8,322 9,455 10,655 12,867 14,433 15.32%
    Total 100% 42,089 55,143 70,873 84,156 101,410 9.54%

    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 Sales Year 1 Year 2 Year 3
    Lodging 1,887,030 2,680,320 2,588,240
    Café and Bar 802,370 815,430 823,540
    Conference Meeting 539,320 770230 1,002,310
    Miscellaneous Services 265,450 322,390 393,320
    TOTAL UNIT SALES 3,494,170 4,588,370 4,807,410
    Unit Prices Year 1 Year 2 Year 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 Costs Year 1 Year 2 Year 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 1 Year 2 Year 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 1 Year 2 Year 3
    Plan Month 1 2 3
    Current Interest Rate 10.00% 11.00% 12.00%
    Long-term Interest Rate 10.00% 10.00% 10.00%
    Tax Rate 26.42% 27.76% 28.12%
    Other 0 0 0

    8.2 Brake-even Analysis

    Resorts Business Plan - Brake-even Analysis

     Brake-Even Analysis  
    Monthly Units Break-even 5530
    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 1 Year 2 Year 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/Sales 30.00% 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 Received Year 1 Year 2 Year 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
    Expenditures Year 1 Year 2 Year 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      
    Assets Year 1 Year 2 Year 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 Capital Year 1 Year 2 Year 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 1 Year 2 Year 3 Industry Profile
    Sales Growth 4.35% 30.82% 63.29% 4.00%
    Percent of Total Assets
    Accounts Receivable 5.61% 4.71% 3.81% 9.70%
    Inventory 1.85% 1.82% 1.79% 9.80%
    Other Current Assets 1.75% 2.02% 2.29% 27.40%
    Total Current Assets 138.53% 150.99% 163.45% 54.60%
    Long-term Assets -9.47% -21.01% -32.55% 58.40%
    TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
    Current Liabilities 4.68% 3.04% 2.76% 27.30%
    Long-term Liabilities 0.00% 0.00% 0.00% 25.80%
    Total Liabilities 4.68% 3.04% 2.76% 54.10%
    NET WORTH 99.32% 101.04% 102.76% 44.90%
    Percent of Sales
    Sales 100.00% 100.00% 100.00% 100.00%
    Gross Margin 94.18% 93.85% 93.52% 0.00%
    Selling, General & Administrative Expenses 74.29% 71.83% 69.37% 65.20%
    Advertising Expenses 2.06% 1.11% 0.28% 1.40%
    Profit Before Interest and Taxes 26.47% 29.30% 32.13% 2.86%
    Main Ratios
    Current 25.86 29.39 32.92 1.63
    Quick 25.4 28.88 32.36 0.84
    Total Debt to Total Assets 2.68% 1.04% 0.76% 67.10%
    Pre-tax Return on Net Worth 66.83% 71.26% 75.69% 4.40%
    Pre-tax Return on Assets 64.88% 69.75% 74.62% 9.00%
    Additional Ratios Year 1 Year 2 Year 3
    Net Profit Margin 19.20% 21.16% 23.12% N.A.
    Return on Equity 47.79% 50.53% 53.27% N.A.
    Activity Ratios
    Accounts Receivable Turnover 4.56 4.56 4.56 N.A.
    Collection Days 92 99 106 N.A.
    Inventory Turnover 19.7 22.55 25.4 N.A.
    Accounts Payable Turnover 14.17 14.67 15.17 N.A.
    Payment Days 27 27 27 N.A.
    Total Asset Turnover 1.84 1.55 1.26 N.A.
    Debt Ratios
    Debt to Net Worth 0 -0.02 -0.04 N.A.
    Current Liab. to Liab. 1 1 1 N.A.
    Liquidity Ratios
    Net Working Capital $120,943 $140,664 $160,385 N.A.
    Interest Coverage 0 0 0 N.A.
    Additional Ratios
    Assets to Sales 0.45 0.48 0.51 N.A.
    Current Debt/Total Assets 4% 3% 2% N.A.
    Acid Test 23.66 27.01 30.36 N.A.
    Sales/Net Worth 1.68 1.29 0.9 N.A.
    Dividend Payout 0 0 0 N.A.

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