FEASIBILITY STUDIES

Tony Harrison, Senior Business Development Consultant, Moffat Centre for Travel & Tourism Business Development Development, Caledonian Business School, GCU

Business Development
o Marketing and Branding o Strategy & Policy Review, Development & Guidance

o Training, Workshops and Seminars

o One-to-one Business Advice

Consultancy & Niche Expertise

o Visitor Attractions o Urban Regeneration

o Destination Management o Events E t Assessment A t

Research
o Feasibility y & Impact p Studies

o Benchmarking B h ki & B Best P Practice i

o Bespoke Research

What is a Feasibility Study? Analytical tool (its is not the answer)

Helps test whether a business concept is viable It is not a Business Plan it contributes to a business plan, mainly in terms of market viability..... ....but but also Business Model viability Management Model viability Technical viability Financial viability Exit strategy viability

The Business Pl Plan

Feasibility St d Study

Defining the Market

Is it:

Business-to-consumer
New New facility or service (hotel, visitor attraction, restaurant, event, etc.) New service/innovation within existing facility/service (spa service, new format menu, event lengthening/shortening) New target market (conference facilities in hotel, museum, restaurant) New distribution channels travel agent, tour operators, internet/e-commerce/M-commerce)

Business-to-Business
Servicing Servicing another business (food & drink supply, well-being/spa well being/spa services, training services, sales and marketing services, IT services, etc.) Using Using new suppliers Merging/take-over of another business

Feasibility - Information Types

PEST Analysis (Political, ( , Economic, , Social, , Technological)

EXTERNAL

WHAT WE KNOW EXTERNAL

INTERNAL
Policy, operational documents
Organisation objectives, responsibilities, resources, budgets, etc.

WHAT WE NEED TO KNOW

EXTERNAL

Demand/Market Needs
Market Size Market Type Market Preferences

Supply/Competitors
Benchmarking Competition Partnerships? P hi ?

Arming Yourself With Information for a Feasibility Study

WHAT WE KNOW our organisations objectives stakeholder t k h ld objectives bj ti present product/service local knowledge pas past performance pe o a ce customer data
Project oject Brief e Arm Yourself With Information
PEST Analysis (Political, Economic, Social, Technological)

EXTERNAL

WHAT WE DONT KNOW Attributes of new product/service Potential of new product/service How can we solve this (i.e. objectives of the Feasibility Study) Research R ht tools l visitor surveys community consultation business consultation benchmarking secondary data gathering training

WHAT WE KNOW

INTERNAL Policy, operational documents

Organisation objectives, responsibilities, resources, responsibilities resources budgets, etc.

WHAT WE NEED TO KNOW

EXTERNAL Consumer Analysis Market Size Market Type Market Preferences

EXTERNAL Competitor Analysis Benchmarking Competition Partnership?

Defining the Development and Risk Attached

Low risk

Medium/high g risk

Low/Medium risk

High risk

LIMITED FEATURE BUDGET HOTEL

Improve quality refurbishment improve grading (e.g. 3-star 4-star) Pricing strategy Promotions Training Free wi-fi wi fi Theatre breaks Weekend breaks Student/university market Restaurant Gym, swimming pool Spa facilities

Restaurant Conferences/meetings g Wedding venue Specialist courses Exhibition space

Competitor Analysis Tool Strategic Positioning

Competitor Analysis Strategic Space - Be the only game in town Event/Festival Example
Dec

Jan Exactly the Same

Timi ing

Theme Similarity

No similarity

Market Analysis y Event Positioning g

Dec

Pitlochry New Year Stirling g Festival

New Year Festival

T Timing Jan Exactly the Same Theme Similarity No similarity

Competitor p Analysis y Hotel Sector

Competitor Analysis Strategic Space - Be the only game in town

Rural

City 1-star Quality 5-star

Location

Competitor Analysis Hotel Sector

100%

Occupancy y Rates 20% 1 1-star Q li Quality 5 5-star

High

Low City Location Rural

Occupan ncy Rates

History Business and Operation Feasibility business started in 2003 Study key USPs beer b matured t d in i whisky hi k and d other th spirit i it casks k award winning beers beer production outsourced plans to produce own beer

Innis & Gunn Visitor Centre

1.Visitorcentreandrelatedactivity 2.Qualitycateringandrelatedoperations 3.Qualityretailoperations

Location Edinburgh, Scotland

Feasibility - Information Types

PEST Analysis (Political, ( , Economic, , Social, , Technological)

EXTERNAL

WHAT WE KNOW EXTERNAL

INTERNAL
Policy, operational documents
Organisation objectives, responsibilities, resources, budgets, etc.

WHAT WE NEED TO KNOW

EXTERNAL Competitor Analysis Benchmarking Competition Partnership? P t hi ?

Market/Needs Analysis Market Size Market Type Market Preferences

Trends in the Beer Market

Increase in market share premium beers of p Increased interest in premium beers

Eating Out Trends

Benchmarking
Metrics and standards from businesses in the visitor attraction sector sector, restaurant sector sector, retail sectors Business model Visitor experience Moment mapping the visitor journey
Literally we need to map the customer journey How to maximise the service encounter at every point of customer contact

Visitor Numbers at benchmark attractions

Category g y Sample Average g visits Medianvisits 23,630 63,629 119,700 231,567 63 306 63,306 11,046 13,383 27,586 116,522

Distillery/Vineyard/Brewery 40 Heritage/VisitorCentre Edinburgh&Lothians Municipality EdinburghCity Scotland 99 85 38 692

Source: Visitor Attraction Monitor Moffat Centre 2009

Visitor Profile at Attractions

Source: Visitor Attraction Monitor Moffat Centre 2009

Visitor Profile Adults/Children

Source: Visitor Attraction Monitor 2009

Seasonality of Demand

Source: Visitor Attraction Monitor 2009

Attraction Entry Prices in Edinburgh

Source: Visitor Attraction Monitor 2009

Benchmarks
BlackSheepBreweryVisitorCentre,Yorkshire,England SamuelAdamsBrewery yandTour, ,Boston, ,Massachusetts, ,USA ShipyardBrewingCompanyandStore,Portland,Maine,USA SeaDogBrewingCompany,Portland,Maine,USA CarlsbergVisitorCentre,Copenhagen,Denmark Attraction locations and visitor access Visitor numbers and visitor revenue Interpretation and visitor experience Merchandising Secondary Secondary income streams (catering, (catering retail retail, events, etc.)

Benchmarks Black Sheep Brewery Brewery, Masham Masham, Yorkshire

5 miles from A1/M1 motorway y But small B-road to village 1-hour drivetime of nearly 5 million people in same village g as the Theakston Brewery Competition Destination D i i building b ildi potential

Tour
5.95/3.95 child guided tour history of company ingredients i di t and d brewing process Beer tasting!! one beer only redeemed with tour ticket non-guided non guided

Pretourvideo presentation overlookingbrewhouse

Catering
Bistro and Baa...r

150 covers (less in evening) Morning lunch and dinner operation Morning, Informal dining at lunch More formal restaurant in evening Highest earning part of attraction Largest area of attraction (space, revenue, staffing and costs)

Benchmarks Black Sheep Brewery Brewery, Masham Masham, Yorkshire

Retail size (25m2) range brand extension low value souvenirs

Heavily y branded retail range g

Benchmarks Black Sheep Brewery Brewery, Masham Masham, Yorkshire

Key revenue sources
Tour 10% Retail 40% Catering 50%

Innovative marketing
Community engagement Events hosting and sponsorship

Entertainment links TV programmes

Benchmarks Samuel Adams Brewery, Brewery Boston Boston, USA

Access to key transport routes e.g. Close to a T stop 4.5 million people in Greater Boston (0.7 million in the city) Offer Free tour and beer tasting Retail

Benchmarks

Engaging entrance through gigantic beer keg F Free tour t B Beer Label L b l Ticket Ti k t

Benchmarks Samuel Adams Brewery, Brewery Boston

Littleusedtouchscreen interpretation

Benchmarks Samuel Adams Brewery, y Boston

Brewery Tour
Remote overhead speakers linked to the tour guides minimicrophone

Benchmarks Samuel Adams Brewery, Brewery Boston

Baratmosphereat thetastingand conclusionofthe tour Complimentary branded tasting glass How to taste beer Engaging tour guide

Benchmarks Samuel Adams Brewery, Brewery Boston

Heavily branded goods

Benchmarks Samuel Adams Brewery, y Boston

Totalvisits c.150,000

Demand Distribution
JanMar 10% OctDec 25% AprilMay 15% JuneSept 50%

Benchmarks Shipyard py Brewery, y Portland, Maine

c. c 45,000 45 000 visitors 60% of visitors come in June, July & August treated as a marketing cost cost, part of brand extension strategy

Benchmarks Shipyard py Brewery, y Portland, Maine

Wall mounted interpretation of the Peter Austin brewing process

Benchmarks Shipyard py Brewery, y Portland, Maine

Benchmarks Shipyard py Brewery, y Portland, Maine

Local Community i t interaction ti

Benchmarks Shipyard py Brewery, y Portland, Maine

Catering Operations owned by Shipyard:

Sea Dog Brewing Company Brewpubs (Bangor, Topsham and South Portland, all Maine) Federal Jacks Restaurant and Shop, Kennebunkport ,Maine Shipyard Brewpub, Eliot, Maine Regatta Banquet and Conference Center, Eliot, Maine The Th Inn I on Peaks P k I Island, l d M Maine i cottage-style tt t l accommodation d ti and d restaurant t t White Cap Lodge Brew Haus, Sunday River, Maine Shipyard Brewpubs at Portland International Jetport (Maines principal airport) one at baggage reclaim and one air air-side side operated by a contractor.

Benchmarks Seadog g Brewpubs, p Bangor, g Maine

Benchmarks Seadog g Brewpubs, p Bangor, g Maine

$10 Sampler comprising ten 7oz glasses of Sea Dog range beer

Benchmarks Carlsberg Visitor Centre, Copenhagen, Denmark

150,000 visitors Capital city location 2.7 million within 1-hour drivetime Charged Entry Adults 60DKK (7.50) (7 50) (includes 2 beers/soft drinks) Child (1217 years) 40DKK (5.00) (includes 2 soft drinks) Child (< 11 years) free (includes 2 soft drinks) Groups (> 15 people) 40DKK (5.00)

Aroma Room

Bottle Collection area of past designs

Tours self guided for individuals group tours classic tour secret Carlsberg C l b b basements Old Carlsberg Brewery The New Copenhagen Art Treasures of Carl Jacobsen

Hi-tech maltings area and d visitor i it walkway lk

Benchmarks Carlsberg g Visitor Centre, Copenhagen, p g Denmark

Catering - 2 outlets Bar a Jacobse Jacobsen Courtyard cafe

Benchmarks Carlsberg Visitor Centre, Copenhagen, Denmark Retail

Branded clothing Bottle openers Branded glasses

Most popular sales items

Lessons from Benchmarks

Key lessons Even attractions supported by national and international brands only achieve up to 150 150,000 000 visitors Exception Guinness achieves c. 1 million visitors Regional attractions closer to 50,000 Location and access to critical mass of population is important UK/European attractions charge, US attractions are free Brand extension/marketing cost Community links are essential Accompanied/guided tour is the norm Catering and retail are profit centres Catering in brewery attractions is mainly mid-market, informal BUT quality food

Demand/Capacity Estimation?

Category

Sample

Averagevisits Medianvisits 23,630 63 629 63,629 119,700 231,567 63,306 11,046 13 383 13,383 27,586 116,522

Distillery/Vineyard/Brewery 40 Heritage/VisitorCentre Edinburgh&Lothians Municipality EdinburghCity Scotland 99 85 38 692

Scottish Rock and Roll Hall of Fame, Glasgow Scotland Glasgow,

Scottish Rock and Roll Hall of Fame

Glasgow g City y Centre

Glasgow UNESCO City of Music

Design Issues

River e

River

Visitor Attraction Demand in Glasgow

Category Heritage/VisitorCentre(Nationally) Museum/ArtGallery(Nationally) Other/Specialist(Nationally) GlasgowCity GlasgowCity(excludingKelvingrove) GreaterGlasgow&ClydeValleyArea Total

Sample Visits2009 Average 100 6,694,004 66,940 46,379

225 10,435,241 12 22 21

1,434,123 119,510 4,383095 199,232 3,014,999 143,571

73 15,801,552 216,549 682 44,749,351 65,615

Costs

Sensitivity Analysis