5. Financial Plan
5.2. Cash Flow Projection
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5.2. Cash Flow Projection
Table 14: Hotel Cash Flow Projection
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14
Revenue
Guest Room Revenue 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 1,115,636 Restaurant Revenue 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 89,455 Café Revenue 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 44,727 Spa & Treatment 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364 36,364
Outsource Revenue 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 315,152 Total Revenue 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333 1,601,333
Fixed Cost
Design &Construction 2,694,916 - - - - - - - - - - - - -
Initial Operation Cost 21,515 - - - - - - - - - - - - -
Land & Property Cost 793,939 - - - - - - - - - - - - -
Staff Wages 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182
Total Fixed Cost 3,988,553 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182 478,182
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Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14
Variable Cost
Hotel CGS 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967 70,967
Restaurant CGS 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 96,909 Café CGS 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891 17,891
Spa CGS 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273 7,273
Cost of Utilities 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727 20,727
Marketing/ Promotional 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545 2,545
Outsource Expense 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 104,727 Maintenance (3% of TR) 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 48,040 Property Tax (1% of TR) 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 16,013 Insurance (0.5% of TR) 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 8,007 FF&E Replace (2%ofTR) 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027 32,027
Total Variable Cost 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 425,127 Total Cost 4,413,679 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308 903,308
Gross Operating Profits (2,812,346) 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025
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Incentive (5% of GOP) - 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 34,901 EBITDA (2,812,346) 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025 698,025
Depreciation(2% ) 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771 79,771
Loan Interest (6.696%) 173,449 185,063 197,455 210,677 194,347 176,924 158,335 138,500 117,338 94,759 70,667-
Earnings Before Tax (3,065,566) 398,289 385,898 372,676 389,005 406,428 425,018 444,018 466,015 488,594 512,685 583,353 583,353 583,353
Tax (20%) - 79,658 77,180 74,535 77,801 81,286 85,004 88,970 93,203 97,719 102,537 116,671 116,671 116,671
Net Profits (EBT – Tax) (3,065,566) 318,632 308,718 298,141 311,204 325,143 340,014 355,882 372,812 390,875 410,148 466,682 466,682 466,682
Repay Owner (11%) - 181,818 181,818 181,818 181,818 181,818 181,818 181,818 181,818 181,818 90,528-
Revolving Money (15%) - 47,795 46,308 44,721 46,681 48,771 51,002 53,382 55,922 58,631 61,522 70,002 70,002 70,002
Free Cash Flow(EBITDA-Tax) (2,812,346) 388,754 392,719 396950 391,725 386,150 380,201 373,854 367,082 359,857 443,438 511,352 511,352 511,352
Repay Capital to bank - - - 454,545 454,545 454,545 454,545 454,545 454,545 454,545 454,545 454,545 279,442 - Remaining Profit (3,065,566) 89,019 80,592 (382,944) (371,840) (359,992) (347,351) (333,864) (319,474) (304,120) (196,447) (57,866) 117,237 396,680
This financial is projected in the condition of hotel will repay the capital loan to the bank in the 4th year, the average interest rate form the top 5 Thai commercial bank is 6.696%. Hotel will repay the owner at 11 percent annually. The hotel will become positive profit at the year 13th. Hotel will keep the revolving money at 15% of the net profits and pay tax at the rate of 20% per year.
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Reference
- Business Travelers and Their Needs. Retrieved March 9, 2015, from World hotel marketing website, http://www.worldhotelmarketing.com/blog/business-travellers-and-their-needs/
- Matt Alderton. (2013, April 3). Economy has changed business travel behavior, survey shows.
Retrieved from
www.successfulmeetings.com//news/research-and-white-papers/economy-has-changed-busine ss-travel-behavior,-survey-shows/
- Number of visitor. Retrieved May 28, 2015, from Tourism Authority of Thailand Intelligence Center website, http://intelligencecenter.tat.or.th:8080/apex/f?p=1:22:0::NO:::
- The profile of arrival travelers categorized by purposes of travelling. Retrieved March 22,
2015, from Tourism Authority of Thailand Intelligence Center website,
http://intelligencecenter.tat.or.th:8080/apex/f?p=1:7:0::NO:::http://intelligencecenter.tat.or.th:8 080/apex/f?p=1:7:0::NO:::
- iHotel Marketer. (2012, June 28). Categorized the purpose of business trip. Retrieved from http://www.ihotelmarketer.com/index.php?option=com_k2&view=item&id=184:business-mar ket
- The Traveler’s Road to Decision, Google and Ipsos MediaCT. (July 2012). How Travelers Use Online Sources for Travel Decision-Making. Retrieved from http://fredericgonzalo.com/en/
2012/09/11/how-travelers-use-online-sources-for-travel-decision-making/
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- 10 Best Business Hotels in Bangkok. Retrieved March 22, 2015, from bangkok.com website, http://www.bangkok.com/business-hotels.htm#promo
- Choose your luxury hotel in Bangkok near BITEC. Retrieved 2015 March, 15, from Bangkok International Trade & Exhibition Centre website, http://www.bitec.co.th/hotel-app.php
- American Society of Heating, Refrigerating and Air-Conditioning Engineers, Inc.
(2003). Ventilation for Acceptable Indoor Air Quality. Retrieved from
https://www.ashrae.org/standards-research--technology/standards-interpretations/interpretatio ns-for-standard-62-2001
- Lancaster G. and Massingham, L. (1988) Essentials of Marketing. Maidenhead, Berkshire, England. McGraw-Hill.
- Smith, W. R. (1956). Product differentiation and market segmentation as alternative marketing strategies. Journal of Marketing.
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1. Bangkok International Trade & Exhibition Centre; BITEC
BITEC’s world-class; state-of-the-art facilities coupled with our comprehensive services encompass the best of traditional Thai warmth and hospitality. Since opening its doors in 1997, BITEC has been selected as the venue for their international trade exhibitions, world congresses, and a wide variety of MICE events. The spacious area for the events linked column-free halls totaling 50,400 m2 which designated area for the event. The land area was increased to 272,000 m2, extending parking capability to 4,700 vehicles. The exhibition center is available for the accommodate major exhibitions, conventions and congress which can contain from 30-20,000 delegates, and over 100,000 visitors per day in 6 pillar-less halls and 19 meeting rooms.
Vision: BITEC will be renowned as one of the world's best venues in 2020.
Mission: We are the venue with finest services for exhibition and convention.
We are committed to operational excellence and employees’ development.
We value partnership with stakeholders and care for the environment.
2. Meetings, incentives, conferencing, exhibitions, MICE14
MICE is a type of tourism in which large groups, usually planned well in advance, are brought together for a particular purpose. Recently, there has been an industry trend towards using the term 'meetings industry' to avoid confusion from the acronym. Most components of MICE are well understood, perhaps with the exception of incentives. Incentive tourism is usually undertaken as a type of employee reward by a company or institution for targets met or
14 http://en.wikipedia.org/wiki/Meetings,_incentives,_conferencing,_exhibitions
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usually conducted purely for entertainment, rather than professional or education purposes.MICE tourism usually includes a well-planned agenda centered on a theme or topic, such as profession trade organization, a special interest group or an education topic.
Why MICE in Thailand?15
Thailand has gained a well-known reputation throughout the world for gracious hospitality.
The friendliness of people and the diverse nature of culture make visitors feel at home.
The country has strong business ties with China and has an excellent infrastructure as well as world-class facilities in many resort towns.
Thailand is a welcoming Buddhist country. The country's form of government - constitutional monarchy - allows democratic processes and reforms, and is balanced by the Thai people's peace-loving nature, high reverence for the Thai Monarchy.
Most nationalities do not need prearranged visas, or up to 30 days are granted on arrival.
Thailand’s location at the heart of the Asia-Pacific Region makes it a natural gateway to the region. International Airport is only 15 minutes from downtown with the Airport Link. The BTS Sky train and MRT Underground offer safe and convenient travel throughout the city.
Thailand offers some of the world’s finest hotels with varieties of choices from luxury to boutique to value for money to serve all delegates’ needs.
Thailand offers six world-class conference venues, the largest of which can easily cater to a conference of 10,000 persons with breakout meeting facilities, dedicated exhibition space, the latest technology, a variety of dining options and many supporting services.
Thailand ranks as fourth in the world's top 10 most popular long-haul destinations for
15 http://www.thaitravelcenter.com/thailand/MICE/index.asp?venue=1#.VSjDG_mUeuI
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meetings and incentives travel. Bangkok was the only Asian city in the top 10.
The health and beauty sector in Thailand that continues to attract great interest has become a hub for Asia. In the same time, Thailand has a great food and entertainment.
3. Thailand Convention and Exhibition Bureau, TCBC16
Thailand Convention and Exhibition Bureau or TCEB is a public organization established by Royal Decree published in the Royal Gazette on 28th September 2002.TCEB has been in operation since 2004. TCEB's main objectives are to promote meetings, incentive travel, conventions and exhibitions, known by the acronym "MICE", and to strongly develop this collective industry in order to make Thailand a regional hub for MICE events. The Bureau's successes since its establishment reflect Thailand's growing
To enhance the impact of Thailand’s MICE industry on the Thai economy.
To create sustainable fundamentals for Thailand’s MICE industry to compete efficiently and effectively in the international arena.
To promote, publicize and set policies and standards for Thailand’s MICE industry.
To represent Thailand in submitting proposals/bid to host international events.
To be the center for information and services, including professional consultations, regarding domestic and internationalMICE business.
To support and arrange professional seminars and training courses and organizations involved in MICE, and to develop the professional skills of MICE personnel in Thailand.
To develop projects to inspire the MICE industry in Thailand under the sponsorship of the Royal Thai Government.
16 http://www.tica.or.th/TCEB.php
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TCEB acts as a promotion centre, orchestrating efforts being undertaken by Thai government and local public sector parties, and is a source for counseling services. All of this is provided with the objective of promoting business events in Thailand.
Efficient, hassle-free government relation service
Organizing international business meetings in Thailand might involve co-ordination with several government agencies, involving procedures and regulations. The TCEB One-Stop Government Service Center has been established to assist MICE operators by providing comprehensive information on government procedures and helping to co-ordinate with concerned government agencies to reduce complications, ensure peace of mind and enhance efficiency for event organizers.
Comprehensive service for MICE operators
Information on the MICE industry and relevant government agencies.
Co-ordination with government agencies.
Documentation and procedures.
Online information through TCEB’s website; www.tceb.or.th
4. Thailand Incentive and Convention Association (TICA)17
Thailand Incentive and Convention Association is a non-profit organization established in 1984 to help the growth of Thailand as a preferred destination for MICE; meetings, incentives, conventions and exhibitions. TICA focuses its efforts and resources in a number of key areas.
17 http://www.tica.or.th/
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4.1 Incentive-related activities: Hosting and co-ordination of familiarization visits. Planning and undertaking sales promotional trips, and participating in trade shows.
4.2 Convention-related activities: Developing educational and training curriculums, including organization of annual educational seminars in major destinations around Thailand.
4.3 Marketing support: The publication of sales aids and promotional materials, such as the Thailand Incentive, Convention and Exhibition Membership Directory which contains a wealth of information on facilities available for events being held in Thailand, and various audio-visual promotional aids. In additional, TICA also prepare the publication of information folders in Thai and English introducing TICA and other support materials.
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5. Table the of tourists behavior in detail year 201318 Analyzed Region All
The most influence of making decision
- Friends 2.30% 2.80% 2.30% 2.60% 2.60% 2.80% 2.80% 2.70% 2.90% 2.90% 2.90% 2.70%
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6. Table of Minimum Ventilation Rates in Breathing Zone from ANSI/ASHRAE Standard 62-2001 ‘Ventilation for Acceptable Indoor Air Quality’
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7. Table of the Balance of tourists 2007-201119
List 2007 2008 2009 2010 2011
Value* %change Value* %change Value* %change Value* %change Value* % change The Income
from tourism 547,782 13.57 574,521 5 510,255 -11.19 592,794 16.18 776,217 31 The Expense
from tourism 100,475 5 97,317 -3 100,220 2.98 121,480 21 122,066 0 Balance of
tourism 447306 15.81 477203 6.68 410034 -14.08 471314 14.94 654,151 38.79
Graph of the changing number of balance of tourism during 2007-2011 (million people)
19 http://marketingdatabase.tat.or.th/ewt_news.php?nid=1732
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8. The table of top 20 arrivals by nationality20
2006 2007 2008 2009 2010 2011 2012 2013 2014
China 949,117 907,117 826,660 777,508 1,122,219 1,721,247 2,786,860 4,637,335 4,623,806 Malaysia 1,591,328 1,540,080 1,805,332 1,757,813 2,058,956 2,500,280 2,554,397 3,041,097 2,644,052 Russia 187,658 277,503 324,120 336,965 644,678 1,054,187 1,316,564 1,746,565 1,603,813 Japan 1,311,987 1,277,638 1,153,868 1,004,453 993,674 1,127,893 1,373,716 1,536,425 1,265,307 South Korea 1,092,783 1,083,652 889,210 618,227 805,445 1,006,283 1,163,619 1,295,342 1,117,449
India 459,795 536,356 536,964 614,566 760,371 914,971 1,013,308 1,050,889 946,269 UK 850,685 859,010 826,523 841,425 810,727 844,972 873,053 905,024 909,335 Singapore 687,160 604,603 570,047 563,575 603,538 682,364 831,215 955,468 864,681
Australia 549,547 658,148 694,473 646,705 698,046 829,855 930,241 900,460 835,517 America 694,258 681,972 669,097 627,074 611,792 681,748 768,638 823,486 764,745 Germany 516,659 544,495 542,726 573,473 606,874 619,133 682,419 737,658 717,631 France 321,278 373,090 398,407 427,067 461,670 515,572 576,106 611,582 632,242
Hong Kong 376,636 367,862 337,827 318,762 316,476 411,834 473,666 588,335 483,883
Taiwan 475,117 427,474 393,176 362,783 369,220 394,225 394,475 502,176 392,758 Sweden 306,085 378,387 392,274 350,819 355,214 373,856 364,681 341,398 324,780
The graph of top 20 arrivals by nationality
20 http://www.tourism.go.th/home/listcontent/11/221/276
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Table 6: The number of residences and room unit for the whole Thailand in 201521
Region Total Hotel Resort
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9. The number of international tourist arrivals to Thailand at Suvarnabhumi international airport and Don Muang international airport (year 2007 – 201422)
Year 2007 2008 2009 2010 2011 2012 2013 Average
Grand Total 10,370,486 10,108,688 9,672,478 10,352,046 12,258,221 14,143,087 17,493,915 12,489,995
22 Source of Data: Immigration Bureau, Royal Thai Police. www.tourism.go.th
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10. Number and size of exhibition center in Asia Pacific in 201223
Country The number of Exhibition center
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11. Convention and Exhibition Center in Thailand24
Exhibition Center Location Area
Bangkok Convention Center
Wan district, Bangkok 20000m2
Impact, Muang Thong Thani Amphoe Pak Kret, Nonthaburi
Meeting Area 6,925m2 and Exhibition Area 6,925m2