This 28 page paper is a business proposal for a Malaysian hotel company to expand to the UK opening a hotel in the Lake District. The paper gives a brief outline of the company and then looks at the plan in terms if strategy and market. The majority of the paper is concerned with the financial aspects of the expansion, looking at projections for five years for both he profit and loss and the balance sheets. The figures projected are used to assess the project using net present value (NPV), internal rate of return (IRR) and profitability index. The main risk of a project such as this is exposure to fluctuations in exchange rates and interest rates, the last part of the paper shows how exposure to these rates may be minimised with careful use of hedging. The bibliography cites 8 sources.
Name of Research Paper File: TS14_TEhotelpr.rtf
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hotel in the Lake District aimed at national and international tourists with a high disposable income. The Lake District is proposed as this is both a popular and beautiful area
where tourism is already establish and demand is evidenced, but an area where there is still excess demand over the supply of accommodation of this type. The cost of
the project is 6 million, of which 4 million is projected as being raised form the banks and YTL Hotels and Properties are only required to out in 2 million.
This borrowing will be paid off within the first four years. Projections are provided including example profit and loss accounts and the balance sheet. The figures from these projects
are then used to assess the viability of the project. The company goal is for a return of 10%, net present value calculation show this is reached and an internal
rate of return is shown to be 14.10%. The major risk for the company if this project goes ahead may be the risk of currency or interest rate fluctuation,
this could be minimised with the use of hedging making the project acceptable. 2. Company Profile YTL Hotels and Properties is part of the YTL Corporation Berhad conglomerate. The parent company
has a range of interests, from power generating companies and construction operations and cement manufacture through to hotels and leisure interests, all of which indicate a strong core competency in
understanding all aspects of the property industry (YTL, 2004). YTL Hotels and Properties is the hospitality division with interests in a range
of activities including mid-range to luxury hotels though to the running of luxury trains (YTL, 2004). The hotels are a major part of the company with the company involved in