5th IHIF Strategy Challenge
Did you know
that if the population of China walked past
you in single file, the line would never end
because of the rate ...
Budget

Luxury

Resort industry in China

Water based

Mainland
National brands

Urban
International brands

Mountains
114 million

Young
Middle class
Urban

(BCG, 2011 ; Euromonitor, 2012)
33 million travelers
(Euromonitor, 2012)
81 million non-customers
Evaluation of the potential market
China

Forecast annual growth of the GDP of 7.2% (IMF, 2012)
Forecast annual growth of ...
What do they want?
A European experience
What do we offer ?
they want?

Design
The Place

to be

China

City
centres
Wellness

centre & activities

Wine Bar
& wine...
we offer ?
What do they want?
Design “A relaxing and trendy European
City centres
The place to be

oasis in the heart of c...
Budget

Luxury

Resort industry in China

Water based

Mainland
National brands

Urban
International brands

Mountains
Competitors
Price

Park
Plaza

++

Holiday
Inn

Aloft

Gloria
Jin Jiang
Inn

Silka

Ibis

---

Attractive to the Young seg...
Criterias of a resort
(University of Memphis, 2009)

One signature amenity

Provide 5 secondary experiences

Provide one f...
Main challenge of a traditional resort
(Panel: Profitability of Resorts Hotels, 2011)

Seasonality
How do we overcome barriers in China ?
Local partnerships

Asian Investors

Management company
Development of the 50 resorts
Beijing
Yantai
Guangzhou
Chengdu
Ningbo
Shanghai
Qingdao
Xian
Shenzhen
Huangshan
Hangzhou
Gu...
Investment per resort

Land: 1’041’000 €
Building: 24’500’000 €

27’300’000 €

Equipment: 872’000 €
Liquidities: 890’000 €...
Revenues (€)
10%

13%
Food
Beverage
Room
Wellness + activities
Wedding + banquets

10%

23%

44%

2013
Revenues
RevPAR

20...
Profitable activities (in m2)
BANQUETS ROOM

2013

2014

2015

2016

2017

Operational profit for 16 rooms (€)

372,592

4...
Net Profit/Loss (€)
1,200,000
1,000,000

800,000
600,000

400,000
200,000

2013

2014

2015

2016

2017
Management Fees (€)
900,000
800,000
700,000

Reimbursable Fee

600,000

Incentive Fee

500,000

Base Fee

400,000
300,000
...
Finance (€)
Dividends
Net cash position

2013

2014

2015

2016

2017

68,570
2,234,076

309,770
3,424,494

519,740
3,038,...
Opportunities

Urban resort locations

•

Non captive customers

•

Few international competitors

•

Lack of qualified la...
Thank you for your attention.
Bibliography
•

AirAsia.com. (2012). Corporate profile. Retrieved 1 26, 2012, from AirAsia.com:
http://www.airasia.com/my/...
•

•

•
•
•

•
•

•

•
•

China Labour Bulletin. (2008, 2 19). Wages in China. Retrieved 1 26, 2012, from China Labour
Bul...
•

•
•
•
•
•
•

•
•

•

•
•
•

Guilmoto, C. Z. (2011, 7). Skewed sex ratios at birth and future marriage squeeze in China ...
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•

Hays, J. (2008). Wine in China. Retrieved 2 19, 2012, from Facts and Details:
http://factsa...
•

•
•
•
•
•

•
•
•
•
•
•
•
•

Thayer Lodging Group. (2011, 10). What is the opportunity in China. Retrieved 1 18, 2012, f...
Upcoming SlideShare
Loading in …5
×

IHIF Strategy Challenge (investment strategy student project)

2,635 views
2,550 views

Published on

Within the context of the Strategy Course of the Ecole hôtelière de Lausanne, our team, composed of 3 students, had the chance to defend our investment project in Berlin, at the world famous International Hotel Investment Forum (IHIF) in 2012.

We had to develop a project based in the resort industry, and after a deep analysis of the world economic and environment context, we chose to invest in China.
Our project won the title of best investment strategy.

Published in: Business, Travel
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,635
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • 114’ooo’oooIl y a X millions de chinois – midscale – young dans les villes de Chine
  • WESTERN !!
  • Trendydomesticwine wedding urban western Pizzas relax, 2 by 2
  • rovide one signature amenity or anchor attributeProvide five secondary recreation/leisure/entertainment experiencesProvide one full-service food & beverage outletBed-base must include short-term or overnight lodgingMinimum of 25 rooms or other accommodationsEmphasize a leisure or retreat-environment experience 
  • Seasonality issue Loyal customers come on average once/ year Specially impacted by the oil costs as the trips are generally longer
  • APRES LA CHINE ??
  • Parler des %d’investissement arriver à 5% vu qu’onamortit en 20 ansdonc 5% par an!Elodie - GRAPHSInvestment: Fixedassets of 26,462,170€ (land, building + equipment)Revenue:- about 7 mio: how much does it grow from 2011 to 2016? Growth of about 25% from 2013 to 2017. 47% of revenue is from other departments than rooms.Mgmt contract: better revenue for the owner, possibility to remain in core business difficulty to be an owner in China, as western orientated conceptan Asian franchisee may be the best manager Profit for mgmt companies: about 500’000 € per resort per yearHotel’s global Profit:We will be profitable, from 2016 with a first benefice of 137’000 euros.Net cash position:Dividends f 10% of the equity from 2016 Positive net cash position  reimbursement of the debt to reduce the interestWACC : coût de capital de 7.51%VAN: positive 
  • 19%  IRR investors
  • IHIF Strategy Challenge (investment strategy student project)

    1. 1. 5th IHIF Strategy Challenge
    2. 2. Did you know that if the population of China walked past you in single file, the line would never end because of the rate of reproduction ?
    3. 3. Budget Luxury Resort industry in China Water based Mainland National brands Urban International brands Mountains
    4. 4. 114 million Young Middle class Urban (BCG, 2011 ; Euromonitor, 2012)
    5. 5. 33 million travelers (Euromonitor, 2012)
    6. 6. 81 million non-customers
    7. 7. Evaluation of the potential market China Forecast annual growth of the GDP of 7.2% (IMF, 2012) Forecast annual growth of the tourism: + 15% outbound tourism (UNTWO, 2011) + 16% domestic tourism (BCG, 2011) Forecast to increase: 450 mio (2010) – 650 mio (2020) (Euromonitor, 2012) Middle class Young CAGR disposable income 2008-2020: 8.1% (Thayer Lodging Group, 2011) Shortfall of midscale supply (Deloitte, 2010) The new generation lives in the now and does not save money (UNWTO, 2011) Young travellers often spend more and are responsibility free (UNWTO, 2011) Young Chinese have demonstrated a higher interest in leisure travel (TLG, 2011) Urban Accessibility to transportation infrastructures
    8. 8. What do they want? A European experience
    9. 9. What do we offer ? they want? Design The Place to be China City centres Wellness centre & activities Wine Bar & wine activities Banquet facilities
    10. 10. we offer ? What do they want? Design “A relaxing and trendy European City centres The place to be oasis in the heart of city centres, Wine bar and at an affordable price”wine activities China Banquet facilities Wellness centre & activities
    11. 11. Budget Luxury Resort industry in China Water based Mainland National brands Urban International brands Mountains
    12. 12. Competitors Price Park Plaza ++ Holiday Inn Aloft Gloria Jin Jiang Inn Silka Ibis --- Attractive to the Young segment National brands International brands ++
    13. 13. Criterias of a resort (University of Memphis, 2009) One signature amenity Provide 5 secondary experiences Provide one full-service F&B outlet Short-term overnight lodging Minimum of 25 rooms Emphasize a leisure or retreatenvironment experience
    14. 14. Main challenge of a traditional resort (Panel: Profitability of Resorts Hotels, 2011) Seasonality
    15. 15. How do we overcome barriers in China ? Local partnerships Asian Investors Management company
    16. 16. Development of the 50 resorts Beijing Yantai Guangzhou Chengdu Ningbo Shanghai Qingdao Xian Shenzhen Huangshan Hangzhou Guilin Kunming Dalian Xiamen
    17. 17. Investment per resort Land: 1’041’000 € Building: 24’500’000 € 27’300’000 € Equipment: 872’000 € Liquidities: 890’000 € 90’000 € / room
    18. 18. Revenues (€) 10% 13% Food Beverage Room Wellness + activities Wedding + banquets 10% 23% 44% 2013 Revenues RevPAR 2014 2015 2016 2017 7,886,000 8,585,000 9,188,300 9,680,000 10,000,400 38 42 45 47 48
    19. 19. Profitable activities (in m2) BANQUETS ROOM 2013 2014 2015 2016 2017 Operational profit for 16 rooms (€) 372,592 406,464 433,562 453,865 460,659 677,440 Operational wedding profit (€) 574,000 609,000 644,000 679,000 728,000 728,000 54% 50% 49% 50% 58% 7% 2013 2014 2015 2016 2017 100% TO Operational profit for 4 rooms (€) 93,148 101,616 108,390 113,471 115,165 211,700 Operational wine profit (€) 274,939 286,272 297,158 307,519 316,927 316,927 195% 182% 174% 171% 175% 50% % Variation WINE BAR % Variation 100% TO
    20. 20. Net Profit/Loss (€) 1,200,000 1,000,000 800,000 600,000 400,000 200,000 2013 2014 2015 2016 2017
    21. 21. Management Fees (€) 900,000 800,000 700,000 Reimbursable Fee 600,000 Incentive Fee 500,000 Base Fee 400,000 300,000 200,000 100,000 0 2013 2014 2015 2016 2017
    22. 22. Finance (€) Dividends Net cash position 2013 2014 2015 2016 2017 68,570 2,234,076 309,770 3,424,494 519,740 3,038,368 744,800 2,525,237 904,180 1,887,058 Total Equity 10,900,000 T Internal Rate of Return 19 % Expected ROE WACC 16% 9.44% Economic Value 31,399,000 - Net Asset (27,262,000) Net Present Value 4,063,000
    23. 23. Opportunities Urban resort locations • Non captive customers • Few international competitors • Lack of qualified labour • European style • High taxes on imported wine • Growth of : • Domestic tourism • Chinese middle-class • Wellness demand • Wine demand • Entry barriers of Chinese • Government investment in favor of domestic tourism • Lack of mid-scale supply government • Entrance of international competitors • Ease of access to Visas for Chinese Threats • Weaknesses Strengths SWOT
    24. 24. Thank you for your attention.
    25. 25. Bibliography • AirAsia.com. (2012). Corporate profile. Retrieved 1 26, 2012, from AirAsia.com: http://www.airasia.com/my/en/corporate/corporateprofile.page • All Countries. (2006, 4 26). Average Wage of Staff and Workers and Related Indices. Retrieved 1 24, 2012, from All Countries: http://www.allcountries.org/china_statistics/5_21_average_wage_of_staff_and.html • Apstein, M. (2011, 5 8). Wine Culture starting to hold in China. Retrieved 2 19, 2012, from SFGate: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/05/06/FD5B1JAPKU.DTL#ixzz1my7atZnb • Average Salary Survey. (2012, 1 4). China. Retrieved 1 24, 2012, from Average Salary Survey: http://www.averagesalarysurvey.com/article/average-salary-in-china/15201531.aspx • Boston Consulting Group. (2011, 3). Taking Off : Travel and Tourism in China and Beyond. Retrieved 1 24, 2012, from Boston Consulting Group: http://www.bcg.com/documents/file74525.pdf • Boyce, J. (2007, 11 29). Go East: China Wine Tours to start in March. Retrieved 1 25, 2012, from Grape Wall of China : http://www.grapewallofchina.com/2007/11/29/go-east-china-wine-toursto-start-in-march/ • Caudalie Paris. (n.d.). L'aventure de Caudalie. Retrieved 1 26, 2012, from Caudalie Paris: http://www.caudalie.com/fr/aventure-de-caudalie.html • China Culture. (2003). Jilin. Retrieved 1 25, 2012, from China Culture: http://www.chinaculture.org/gb/en_map/2003-09/24/content_21559.htm • China Highlights. (n.d.). China Hotel Chains & Brands. Retrieved 2 19, 2012, from China Highlights: http://www.chinahighlights.com/hotel/brand/
    26. 26. • • • • • • • • • • China Labour Bulletin. (2008, 2 19). Wages in China. Retrieved 1 26, 2012, from China Labour Bulletin: http://www.clb.org.hk/en/node/100206 China Travel Depot. (2010). Brief Introduction to Chinese Traditional Sports and Activities. Retrieved 1 26, 2012, from China Travel Depot: http://www.chinatraveldepot.com/C230-Chinese-TraditionalSports-and-Activities China Wine Tours . (2009). China Wine Tours Presents... "Out to Eat" TV Show Tour! Retrieved 1 25, 2012, from China Wine Tours : http://www.chinawinetours.com/chinawinetours.cfm Chinadaily.com.cn. (2006, 3 29). 10 Best Spas In China. Retrieved 1 26, 2012, from Chinadaily.com.cn: http://www.chinadaily.com.cn/citylife/2006-03/29/content_555524.htm Chinatoday.com.cn. (2008, 12 28). Mariage en Chine : "Oui, je le veux", une expression encore fort répandue en Chine. Retrieved 1 23, 2012, from Chine Informations: http://www.chineinformations.com/actualite/mariage-en-chine-oui-je-le-veux-une-expression-encorefort_11964.html Chinesebusinessworld.com. (2009). Zhangjiakou City. Retrieved 1 25, 2012, from Chinesebusinessworld.com: http://www.cbw.com/business/invest/zhangjiakou/ CNNGo staff. (2011, 9 6). Top 10 dream destinations for Chinese tourists. Retrieved 1 20, 2012, from CNNGO: http://www.cnngo.com/shanghai/life/top-10-dream-holiday-destinations-chinese058075 Deloitte. (2010). Hospitality 2015 - Game changers or spectators? Retrieved 1 23, 2012, from Deloitte: http://www.deloitte.com/assets/DcomKenya/Local%20Assets/Documents/Deloitte%20Reports%20-%20Hospitality%202015.pdf Entreprises à l'étranger. (n.d.). L'impôt sur les sociétés en Chine. Retrieved 2 3, 2012, from Entreprises à l'étranger: http://www.entreprisesaletranger.org/article-6278166.html Fonds monétaire international. (2011, 4). Perspectives de l'économie mondiale. Retrieved 1 27, 2012, from Fonds monétaire international: http://www.imf.org/external/french/pubs/ft/weo/2011/01/pdf/textf.pdf
    27. 27. • • • • • • • • • • • • • Guilmoto, C. Z. (2011, 7). Skewed sex ratios at birth and future marriage squeeze in China and India, 2005-2100. Retrieved 1 21, 2012, from CEPED: http://www.ceped.org/?Skewed-sex-ratiosat-birth-and Guo, N. (2012, 1 30). Beijing Hospitality Institute. (C. Plumey, Interviewer) Haile, L. (2002). Le marché du mariage. Retrieved 1 21, 2012, from Le Chine pictorial: http://www.rmhb.com.cn/chpic/htdocs/france/200705/news/8-1.htm Hays, J. (2008). Wine in China. Retrieved 2 19, 2012, from Facts and Details: http://factsanddetails.com/china.php?itemid=142&catid=11&subcatid=73 Jade Valley Wine & Resort. (n.d.). ABOUT. Retrieved 1 25, 2012, from Jade Valley Wine & Resort: http://www.jadevalley.com.cn/aboutus/?type=detail&id=3 Jing, M. (2011, 8 15). Wedding website hopes to lure Chinese couples. Retrieved 1 21, 2012, from China Daily: http://www.chinadaily.com.cn/bizchina/2011-08/15/content_13115061.htm La Chine Au Présent. (2008, 1 7). Le prix du logement en Chine : impossible à rattraper ! Retrieved 1 29, 2012, from Chine Informations: http://www.chine-informations.com/actualite/leprix-du-logement-en-chine-impossible-a-rattraper_8439.html Lam, O. (2011, 12 2). China: Marriage Transaction. Retrieved 1 25, 2012, from GlobalVoices: http://globalvoicesonline.org/2011/12/02/china-marriage-transaction/ Lapnet. (2006, 12 20). Les riches touristes chinois préfèrent la France. Retrieved 1 23, 2012, from L'actualité du monde de l'Internet en traductions: http://lapnet.blogspot.com/2006/12/lesriches-touristes-chinois-prfrent.html LeJournalduNet. (n.d.). Il plaque tout pour aller vendre du vin sur la côte d'Azur chinoise. Retrieved 1 25, 2012, from LeJournalduNet: http://www.journaldunet.com/economie/lesdix/entrepreneurs-francais-chine/2-frederic-choux.shtml Guilmoto, C. Z. (2011, 7). Skewed sex ratios at birth and future marriage squeeze in China and India, 2005-2100. Retrieved 1 21, 2012, from CEPED: http://www.ceped.org/?Skewed-sex-ratiosat-birth-and Guo, N. (2012, 1 30). Beijing Hospitality Institute. (C. Plumey, Interviewer) Haile, L. (2002). Le marché du mariage. Retrieved 1 21, 2012, from Le Chine pictorial: http://www.rmhb.com.cn/chpic/htdocs/france/200705/news/8-1.htm
    28. 28. • • • • • • • • • • • • • • • Hays, J. (2008). Wine in China. Retrieved 2 19, 2012, from Facts and Details: http://factsanddetails.com/china.php?itemid=142&catid=11&subcatid=73 Jade Valley Wine & Resort. (n.d.). ABOUT. Retrieved 1 25, 2012, from Jade Valley Wine & Resort: http://www.jadevalley.com.cn/aboutus/?type=detail&id=3 Jing, M. (2011, 8 15). Wedding website hopes to lure Chinese couples. Retrieved 1 21, 2012, from China Daily: http://www.chinadaily.com.cn/bizchina/2011-08/15/content_13115061.htm La Chine Au Présent. (2008, 1 7). Le prix du logement en Chine : impossible à rattraper ! Retrieved 1 29, 2012, from Chine Informations: http://www.chine-informations.com/actualite/le-prix-du-logement-en-chineimpossible-a-rattraper_8439.html Lam, O. (2011, 12 2). China: Marriage Transaction. Retrieved 1 25, 2012, from GlobalVoices: http://globalvoicesonline.org/2011/12/02/china-marriage-transaction/ Lapnet. (2006, 12 20). Les riches touristes chinois préfèrent la France. Retrieved 1 23, 2012, from L'actualité du monde de l'Internet en traductions: http://lapnet.blogspot.com/2006/12/les-riches-touristes-chinoisprfrent.html LeJournalduNet. (n.d.). Il plaque tout pour aller vendre du vin sur la côte d'Azur chinoise. Retrieved 1 25, 2012, from LeJournalduNet: http://www.journaldunet.com/economie/les-dix/entrepreneurs-francaischine/2-frederic-choux.shtml Les sources de Caudalie. (n.d.). "Les attentions d'un palace alliées à la chaleur d'une maison de famille". Retrieved 1 26, 2012, from Les sources de Caudalie: http://www.sources-caudalie.com/ LocalWineEvents. (2012). Wine Fundamentals Certificate Level 1 (WFCL1). Retrieved 1 25, 2012, from LocalWineEvents: http://www.localwineevents.com/events/detail/396102/beijing-wine-fundamentalscertificate-level-1-wfcl1 Martin, M. (2011, 1 13). Chinese wine drinkers - young and gullible but with expensive tastes. Retrieved 2 19, 2012, from China Business Watch: http://topics.scmp.com/news/china-business-watch/article/Chinesewine-drinkers---young-and-gullible-but-with-expensive-tastes Moody, A., & Chang, B. (2010, 2 1). Toasting the future of China's wine industry. Retrieved 2 19, 2012, from China Daily: http://www.chinadaily.com.cn/bizchina/2010-02/01/content_9405191.htm Resnick, E. (2008, 2 22). Wealthy Chinese prefer French wine brands. Retrieved 2 3, 2012, from Wine Brands Blog: http://www.winebrandsblog.com/2008/02/wealthy-chinese-prefer-french-wine-brands/ Shao-Hua, L. (n.d.). Grape Production in China. Retrieved 1 26, 2012, from FAO: http://www.fao.org/docrep/003/x6897e/x6897e05.htm Smith, J., & Wylie, J. (n.d.). China's Youth Define "Cool". Retrieved 1 24, 2012, from China Business Review: https://www.chinabusinessreview.com/public/0407/smith.html Suen, W. (2011, 10 11). Developing Trends of Chinese Future Wine Market. Retrieved 2 3, 2012, from winechina.com: http://www.winechina.com/en/read.asp?id=2011102532
    29. 29. • • • • • • • • • • • • • • Thayer Lodging Group. (2011, 10). What is the opportunity in China. Retrieved 1 18, 2012, from Cornell School of Hotel Administration: http://www.hotelschool.cornell.edu/about/dean/documents/PILLSBURYSHAChina_presentationv2Oct2011.pdf Tour-beijing. (2012). Beijing Hot Spring Spa Breaks. Retrieved 1 26, 2012, from Tour-beijing: http://www.tourbeijing.com/spa/ TravBuddy. (2011). Popular Cities in China. Retrieved 1 25, 2012, from TravBuddy: http://www.travbuddy.com/Chinapopular-cities-c8 TravelChinaGuide.com. (2012). Changchun Travel Guide. Retrieved 1 24, 2012, from TravelChinaGuide.com: http://www.travelchinaguide.com/cityguides/jilin/changchun/ University of Memphis. (2009, 8 6). Resort Definition & Classifications. Retrieved 12 5, 2011, from Caribbean Hotel Association: http://caribbeanhotelassociation.com/source/Members/DataCenter/Research-UofMemphis.pdf Van den Bergh, J. (2011, 2 16). The adoption of coolness by Chinese youth. Retrieved 1 22, 2012, from how cool brands stay hot: http://www.howcoolbrandsstayhot.com/2011/02/16/the-adoption-of-%E5%87%89%E5%BF%AB-bychinese-youth/ Verot, O. (2009, 12 13). Le Mariage en Chine. Retrieved 1 21, 2012, from Marketing Chine: http://www.marketingchine.com/culture-chine/mariage-en-chine VINEXPO. (2011, 3 8). Chinese wine consumption doubled in 5 years. Retrieved 2 3, 2012, from VINEXPO: http://www.vinexpo.com/en/actualites/news/chinese-wine-consumption/ Wangtianyi. (2011, 5 10). Wine-tasting classes popular in Beijing. Retrieved 1 25, 2012, from CRIENGLISH: http://english.cri.cn/8706/2011/05/10/2381s636596.htm Wine Hotels Collection. (2011). A worldwide directory of Wine Exclusive Resorts. Retrieved 1 26, 2012, from Wine Hotels Collection: http://www.winehotelscollection.com/france.htm winechina.com. (2011). China Wine Online. Retrieved 1 25, 2012, from winechina.com: http://www.winechina.com/en/ World Travel Awards. (2011). Asia's Leading Lifestyle Hotel 2011. Retrieved 1 24, 2012, from World Travel Awards: http://www.worldtravelawards.com/award-asias-leading-lifestyle-hotel-2011 Worldwide-tax. (2011). China V.A.T and Other Taxes 2011. Retrieved 1 27, 2012, from Worldwide-tax: http://www.worldwide-tax.com/china/chi_other.asp Wu, J., & Loo, T. (2012, 1 16). Consumption Trends China 2012. Retrieved 1 26, 2012, from slideshare: http://www.slideshare.net/mandywj/consumption-trends-china-2012

    ×