FEASIBILITY STUDIESFEASIBILITY STUDIES

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

Business Development

o Marketing and Brandingo Strategy & Policy Review,

Development & GuidanceDevelopment & Guidance

o Training, Workshops and Seminars

o One-to-one Business Advice

Consultancy & Niche Expertiseo Visitor Attractions o Urban Regeneration

o Destination ManagementE t A to Events Assessment

Research

o Feasibility & Impact Studiesy p

B h ki & B P io Benchmarking & Best Practice

o Bespoke Research

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

• Helps test whether a business concept is viableHelps 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 also....but also• Business Model viability• Management Model viability The Business

PlManagement Model viability• Technical viability • Financial viability Feasibility

St d

Plan

• Exit strategy viability Study

Is it:Defining the Market

• Business-to-consumer•New facility or service (hotel, visitor attraction, restaurant, event, etc.)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 another business (food & drink supply, well-being/spaServicing another business (food & drink supply, well being/spa services, training services, sales and marketing services, IT services, etc.)Using new suppliers•Using new suppliers

•Merging/take-over of another business

Feasibility - Information Types

PEST Analysis

(Political, Economic, Social,EXTERNAL

( , , ,Technological)

INTERNAL• Policy, operational documents

WHAT WE

WHAT WE NEED TO

• Organisation objectives, responsibilities, resources,

budgets, etc.

KNOW KNOW

Supply/CompetitorsDemand/Market Needs

EXTERNALEXTERNAL

Supply/Competitors• Benchmarking• Competition

P hi ?

Demand/Market Needs • Market Size• Market Type• Market Preferences • Partnerships?• Market Preferences

Arming Yourself With Information for a Feasibility Study

WHAT WE DON’T KNOW• Attributes of new product/service

WHAT WE KNOW• our organisation’s objectives

t k h ld bj ti Attributes of new product/service• Potential of new product/service• How can we solve this (i.e. objectives of the

Feasibility Study)R h t l

• stakeholder objectives • present product/service• local knowledge• past performance

Project Brief –

• Research tools –• visitor surveys• community consultation• business consultation

pas pe o a ce• customer data

oject e Arm Yourself With Information

PEST Analysis(Political, Economic, Social,

Technological)

EXTERNAL

business consultation• benchmarking• secondary data gathering• training

Technological)

INTERNAL• Policy, operational documents• Organisation objectives, responsibilities resources

WHAT WE KNOW

WHAT WE NEED TO

KNOW

Competitor Analysis• Benchmarking• Competition• Partnership?

Consumer Analysis • Market Size• Market Type• Market Preferences

responsibilities, resources, budgets, etc.

EXTERNALEXTERNAL

Market Preferences

Defining the Development and Risk Attached

Low risk Medium/high riskg

Low/Medium risk High risk

LIMITED FEATURE BUDGET HOTEL

•Improve quality•Improve quality•refurbishment• improve grading (e.g. 3-star – 4-star)

• Restaurant• Gym, swimming pool• Spa facilities

•Pricing strategy•Promotions•Training•Free wi fi•Free wi-fi

• Theatre breaks• Weekend breaks

• Restaurant• Conferences/meetings

• Student/university marketg

• Wedding venue• Specialist courses• Exhibition space

Competitor Analysis Tool – Strategic Positioning

Competitor Analysis

Strategic Space Be the only game in townStrategic Space - Be the only game in town

Event/Festival Example Dec

ing

Tim

i

Jan

Exactly the Same Theme Similarity No similarityExactly the Same Theme Similarity No similarity

Market Analysis – Event Positioningy g

Dec

Pitlochry New Year FestivalStirling

Festival gNew Year Festival

Tim

ing

T

Jan

Exactly the Same Theme Similarity No similarity Exactly the Same Theme Similarity No similarity

Competitor Analysis – Hotel Sectorp y

Competitor AnalysisCompetitor Analysis

Strategic Space - Be the only game in town

Rural

Loca

tion

City 1-star Quality 5-star

Competitor Analysis – Hotel Sector 100%

y

Occ

upan

cyR

ates

20%

1 Q li 51-star Quality 5-star High

ncy

Occ

upan

Rat

es

Low

City Location Rural

Innis & Gunn Visitor CentreHistory Business and Operation Feasibility• business started in 2003• key USPs

b t d i hi k d th i it k

Business and Operation Feasibility Study

• beer matured in whisky and other spirit casks• award winning beers

• beer production outsourcedbeer production outsourced• plans to produce own beer

1.Visitor centre and related activity2.Quality catering and related operations3.Quality retail operations 

Location – Edinburgh, Scotland

Feasibility - Information Types

PEST Analysis

(Political, Economic, Social,EXTERNAL

( , , ,Technological)

INTERNAL• Policy, operational documents

WHAT WE

WHAT WE NEED TO

• Organisation objectives, responsibilities, resources,

budgets, etc.

KNOW KNOW

Competitor AnalysisMarket/Needs Analysis

EXTERNALEXTERNAL

Competitor Analysis• Benchmarking• Competition

P t hi ?

Market/Needs Analysis • Market Size• Market Type• Market Preferences • Partnership?• Market Preferences

Trends in the Beer Market • Increase in market share of premium beersp

• Increased interest in premium beerspremium beers

Eating Out Trends

Benchmarking

• Metrics and standards from businesses in the visitor attraction sector restaurant sector retail sectorsattraction sector, restaurant sector, retail sectors

• Business modelBusiness model

• Visitor experience

• Moment mapping the visitor journey• Literally we need to map the customer 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 Sample Average visits  Median visitsg y Sample g Median visits

Distillery/Vineyard/Brewery 40 23,630 11,046

Heritage/Visitor Centre 99 63,629 13,383

Edinburgh & Lothians Municipality

85 119,700 27,586Municipality

Edinburgh City 38 231, 567 116,522

Scotland 692 63 306Scotland  692 63,306

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

• Black Sheep Brewery Visitor Centre, Yorkshire, England• Samuel Adams Brewery and Tour, Boston, Massachusetts, USAy , , ,• Shipyard Brewing Company and Store, Portland,  Maine, USA• Sea Dog Brewing Company, Portland, Maine, USA• Carlsberg Visitor Centre, Copenhagen, Denmark

•Attraction locations and visitor access•Visitor numbers and visitor revenue•Interpretation and visitor experience•MerchandisingSecondary income streams (catering retail•Secondary income streams (catering, retail, events, etc.)

BenchmarksBlack Sheep Brewery Masham YorkshireBlack Sheep Brewery, Masham, Yorkshire

• 5 miles from A1/M1 motorwayy

• But small B-road to village

• 1-hour drivetime of nearly 5 million peoplemillion people

• in same village as the gTheakston Brewery

• CompetitionD i i b ildi• Destination building potential

Tour• £5.95/£3.95 child• guided tour• history of company

i di t d• ingredients and brewing process

• Beer tasting!!• one beer only• one beer only redeemed with tour ticket• non guided• non-guided

Pre‐tour video presentationpresentation 

overlooking brewhouse 

CateringBistro and Baa’...r

• 150 covers (less in evening)• Morning lunch and dinner operationMorning, lunch and dinner operation

• Informal dining at lunch• More formal restaurant in evening

• Highest earning part of attractionHighest earning part of attraction• Largest area of attraction (space,

revenue, staffing and costs)

BenchmarksBlack Sheep Brewery Masham YorkshireBlack Sheep Brewery, Masham, Yorkshire

Retail• size (25m2)• rangerange• brand extension• low value• low value

souvenirs

Heavily branded retail rangey g

BenchmarksBlack Sheep Brewery Masham YorkshireBlack Sheep Brewery, Masham, Yorkshire

Key revenue sources

Tour10%

Retail

Catering50%

Retail40%

Innovative marketing

• Community engagement

• Events hosting and sponsorship

Entertainment linkslinks• TV programmes

BenchmarksSamuel Adams Brewery Boston USASamuel Adams Brewery, 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

EngagingEngaging entrance through gigantic beer

B L b l Ti k t

gigantic beer keg

F t Beer Label TicketFree tour

BenchmarksSamuel Adams Brewery BostonSamuel Adams Brewery, Boston

Little‐used touch screen interpretation

BenchmarksSamuel Adams Brewery, Bostony

Remote overhead speakers linked to

Brewery Tour

speakers linked to thetour guide’s mini‐microphone

BenchmarksSamuel Adams Brewery BostonSamuel Adams Brewery, Boston

‘Bar’ atmosphere at the tasting and conclusion of theconclusion of the tour

ComplimentaryComplimentary branded tasting glass

‘How to taste beer’

Engaging tour guide

BenchmarksSamuel Adams Brewery BostonSamuel Adams Brewery, Boston

Heavily branded goods

BenchmarksSamuel Adams Brewery, Boston

Total visits – c. 150,000

y

Total visits  c. 150,000

Demand Distribution

June‐SeptJan‐Mar10%

April‐May15%

June Sept50%

Oct‐Dec25%

10%

25%

BenchmarksShipyard Brewery, Portland, Mainepy y

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

BenchmarksShipyard Brewery, Portland, Mainepy y

Wall mounted interpretation of the Peter Austin brewing process

BenchmarksShipyard Brewery, Portland, Mainepy y

BenchmarksShipyard Brewery, Portland, Mainepy y

Local Community i t tiinteraction

BenchmarksShipyard Brewery, Portland, Mainepy y

Catering Operations owned by Shipyard:

• Sea Dog Brewing Company Brewpubs (Bangor, Topsham and South Portland, all Maine)• Federal Jack’s Restaurant and Shop, Kennebunkport ,Maine• Shipyard Brewpub, Eliot, Maine• Regatta Banquet and Conference Center, Eliot, Maine

Th I P k’ I l d M i tt t l d ti d t t• The Inn on Peak’s Island, Maine – cottage-style accommodation and restaurant• White Cap Lodge Brew Haus, Sunday River, Maine• Shipyard Brewpubs at Portland International Jetport (Maine’s principal airport)

one at baggage reclaim and one air side• one at baggage reclaim and one air-side• operated by a contractor.

BenchmarksSeadog Brewpubs, Bangor, Maineg p g

BenchmarksSeadog Brewpubs, Bangor, Maineg p g

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

BenchmarksCarlsberg Visitor Centre, Copenhagen, Denmark

•150,000 visitors• Capital city locationCapital city location • 2.7 million within 1-hour drivetime

Charged Entry• Adults – 60DKK (£7 50) (includes 2 beers/soft• Adults – 60DKK (£7.50) (includes 2 beers/soft

drinks)• Child (12‐17 years) – 40DKK (£5.00) (includes 2

soft drinks)soft drinks)• Child (< 11 years) ‐ free (includes 2 soft drinks)• Groups (> 15 people) – 40DKK (£5.00)

Aroma Room

Bottle Collection area of past designs

Toursself guided for individuals• self guided for individuals

• group tours• classic tour

C l b b

Hi-tech maltings area d i it lk

• secret Carlsberg basements• Old Carlsberg Brewery• The New Copenhagen

and visitor walkway• Art Treasures of Carl Jacobsen

BenchmarksCarlsberg Visitor Centre, Copenhagen, Denmark g p g

Catering - 2 outlets• Bar Jacobsena Jacobse• Courtyard cafe

BenchmarksCarlsberg Visitor Centre, Copenhagen, Denmark

Retail

Branded clothing

Bottle openers Branded

glassesglasses

Most popular sales itemsMost popular sales items

Lessons from BenchmarksKey lessonsKey lessons

• Even attractions supported by national and international brands only achieve up to 150 000 visitorsachieve up to 150,000 visitors

• Exception – Guinness achieves c. 1 million visitors

• Regional attractions closer to 50,000Regional 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 Average visits  Median visits

Distillery/Vineyard/Brewery 40 23,630 11,046

Heritage/Visitor Centre 99 63 629 13 383Heritage/Visitor Centre 99 63,629 13,383

Edinburgh & Lothians Municipality

85 119,700 27,586

Edinburgh City 38 231, 567 116,522

Scotland  692 63,306

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

Scottish Rock and Roll Hall of Fame

Glasgow City g yCentre

Glasgow – UNESCO City of Music

Design Issues

Rivere

River

Visitor Attraction Demand in Glasgow

Category Sample Visits 2009 Average

Heritage/Visitor Centre (Nationally) 100 6,694,004 66,940

Museum/Art Gallery (Nationally) 225 10,435,241 46,379

Other/Specialist (Nationally) 12 1,434,123 119,510

Glasgow City 22 4,383095 199,232

Glasgow City (excluding Kelvingrove) 21 3,014,999 143,571

Greater Glasgow & Clyde Valley Area 73 15,801,552 216,549

Total  682 44,749,351 65,615

Costs

Sensitivity Analysis