1. smarthotels
Business Plan - MTM VII - Group 2 1

2. Business Plan - MTM VII - Group 2 2

3.  The Project Slide n. 4
 The Product Slide n. 5
 The Choice Slide n. 6
 The Target Slide n. 7
 The Brand smarthotels Slide n. 8
 The Logo Slide n. 9
 Locations – List of options Slide n.10
a) Analytical Framework Slide n.11
b) Rejected Locations Slide n.12
c) Chosen Locations Slide n.13
 Cagliari – Elmas Slide n.14
 Cinisello Balsamo Slide n. 22
 Mestre Slide n. 31
 The 3 Hotels Slide n. 38
 Conclusions Slide n. 39
Business Plan - MTM VII - Group 2 3

4.  An International Hotel Chain wants to enter the Italian market with 3
hotels with the same features, representing a brand new product in
the existing hotel market.
 The purpose of the project is to launch a new combination of
products and services able to react to the very complex Italian
hospitality sector.
 The added value of the new product lays in simplicity and low
fares, together with an essential impeccable service.
 12 possible locations have been analyzed.
Business Plan - MTM VII - Group 2 4

5. The International Hotel Chain has 3 different products, among which we
had to choose the one that could fit appropriately in the three destinations:
 Basic Budget Product:
◦ Main target: Business
◦ Services: Buffet breakfast (not included in room price), catering with
vending machines, car parking;
 Standard Budget Product:
◦ Main target: Business
◦ Services: Buffet breakfast (not included in room price), snack bar
with vending machines, restaurant (evening opening only),
car parking;
 Integrated Budget Product:
◦ Main target: Business
◦ Services: Breakfast, bar (12 hours opening), restaurant, gym,
swimming pool, car parking;
Business Plan - MTM VII - Group 2 5

6. As we wanted to introduce an innovative concept, the Basic Budget Product was
the one who fitted the best in all of the 3 destinations, for a series of reasons:
 It is a new concept, a good quality accommodation with low price and essential
services, that can satisfy business people needs as well as leisure travellers.
 There’s no such product in the Italian market at the moment, and its strength
lays also in that: the aim is to create a new class of hotels, with concrete value
for money, where travellers would be willing to stay.
 The problem in the Italian Hospitality Industry is that a low rate often
corresponds to a bad or poor service. This Hotel Chain’s aim is not to reduce
services in order to cut costs and reach feasibility, but to provide travellers with
essential services, good quality and very competitive prices.
 The Italian Hospitality Industry is saturated of mid and full service hotels, and
those travellers who avoid luxury accommodations never know whether they
should pay more to have a poor service, or to get a lower price being sure that
the service will not be good. This new Hotel Chain will give an answer to this
dilemma:
The price will be low, but the service offered will be essential and good for sure.
Business Plan - MTM VII - Group 2 6

7.  Being the chosen locations strategic from the point of view of
connections with airports, highways and railway stations, we believe that
the Hotels will be the perfect accommodation for Business travellers, who
always need fast and efficient services but not always are willing to go to
a luxury hotel.
 Considering, however, the proximity of chosen locations to interesting
leisure destinations, we think that during high peak season for leisure
tourism (that usually coincide with low season for business travels),
leisure travellers will be willing to book our Hotels, considering the
advangtages of a low price, the proximity to the destination they want to
visit and the essentiality of the services we offer, together with the
guarantee of a standard and always good product.
Business Plan - MTM VII - Group 2 7

8. We decided to name the chain smarthotels.
This is a short name, easy to remember and that lead to a
positive idea and summarize the main characteristics of our
hotel chain:
Simple
Modern
Affordable
Relaxing
Trustable
Business Plan - MTM VII - Group 2 8

9. smarthotels
smart
Business Plan - MTM VII - Group 2 9

10. 12 locations in 10 Italian cities:
 Ancona – Via Martiri della Resistenza/Via della Ricostruzione
 Bergamo – Via Como/Via Campagnola
 Cagliari (Elmas) – Via Sulcitana/Via del Geco
 Caserta – Via Appia/Via Roma
 Cinisello Balsamo – Viale Valtellina/Cavalcavia Vulcano
 Firenze - Via Dè Ginori/Borgo San Lorenzo
 Firenze – Piazza Ravenna
 Genova – Via Multedo/Ronchi
 Genova – Piazza Nicolò Barabino
 Mestre – Corso del Popolo/Rampa Cavalcavia
 Monza – Via Nazario Sauro/Via San Rocco
 Verona – Via G. Fedrigoni/Via Basso Acquar
Business Plan - MTM VII - Group 2 10

11.  Parameters for the evaluation:
◦ Geographical position;
◦ Distances from main attractions;
◦ Tourism flows and trends;
◦ Socio-economic background;
◦ Business trends and extended context;
◦ Target audience;
◦ Potential development of the area (infrastructures);
◦ Possible profitability;
◦ Current receptive market;
◦ Existing competitors (hotels within 10 km distance and 50 rooms min.);
Business Plan - MTM VII - Group 2 11

12. City Address Synthesis for discard
The business of the city is based on ship
Via Martiri della Resistenza/Via
Ancona building and steel, which are declining markets.
della Ricostruzione
Bergamo has a growing industry and some
Bergamo Via Como/Via Campagnola competitors have already entered the market.
Business tourism is not enough developed in
Caserta Via Appia/Via Roma Caserta yet.
Via Dè Ginori/Borgo San Lorenzo Downtown Florence is mainly a leisure
Firenze destination, with few business tourists.
and Piazza Ravenna
Via Multedo/Ronchi and Piazza The city bases its business on declining sectors
Genova (mainly ship building).
Nicolò Barabino
Monza’s tourism is not growing enough to fill in
Monza Via Nazario Sauro/Via San Rocco a new hotel.
Verona is already saturated as business
Verona Via G. Fedrigoni/Via Basso Acquar destination (MICE in particular).
Business Plan - MTM VII - Group 2 12

13. City Address Synthesis of choice
• Strategic position: close to the airport Elmas and to
important and growing businesses (Saras S.p.A.);
Cagliari • City is growing from a tourism point of view;
Via Sulcitana/
• Hotel competitors have high prices: we’ll compete
(Elmas) Via del Geco
with a low price product;
• Elmas Airport is growing in importance;
• Target: business and leisure, all year round;
• Strategic position: about 10 km northeast of Milan
downtown, near Rho Fiera, Formula One circuit in
Monza, San Siro Soccer stadium
Cinisello • A rich and diverse fabric of enterprises (4,700)
Viale Valtellina/
• Excellent connections and infrastractures: ringroads,
Balsamo Cavalcavia Vulcano
highways, airports (Linate, Orio al Serio and
Malpensa), underground, railway station;
• Target: mainly business, but also leisure visitors to
Milan who can’t afford to stay in the city;
• Strategic location to connect Italy with Eastern and
Northern Europe;
Corso del Popolo/ • Excellent connections and infrastractures: nearby the
Mestre Rampa Cavalcavia Venice airport, the railway station, Mestre ringroad
and highways;
• Target: business and leisure
Business Plan - MTM VII - Group 2 13

14. The location, between Via Sulcitana and Via del Geco, in Elmas (Cagliari
Province) is strategic, very close to the airport and to state highway, and just
9km far frow downtown Cagliari.
Legend:
Location
Infrastructures
Airport
Business Plan - MTM VII - Group 2 14

15. Arrivals trend 2009-2010 Overnights trend 2009-2010
140,000 900,000
800,000
120,000
700,000
100,000
600,000
80,000 500,000
Source: Cagliari Province
60,000 400,000
2010 2010
300,000
40,000 2009 2009
200,000
20,000
100,000
0 0
ARRIVALS: decrese in OVERNIGHTS: huge decrease in
April, May, August and January, February and April, increase
December, increase in March and in November and December;
October;
Business Plan - MTM VII - Group 2 15

16. SOURCE:Sogaer S.p.A.
Business Plan - MTM VII - Group 2 16

17. Variation of the population 2003-
2010
9,112
9,200
8,947
9,000 8,852
8,800 8,974
8,934
Residents
8,600 8,639
8,475
8,400
8,271
8,200
8,000
7,800
2003 2004 2005 2006 2007 2008 2009 2010
Year
Source: ISTAT
Business Plan - MTM VII - Group 2 17

18. Number of
Name Industry Address Turnover
Employees
Saras Spa Oil industry Sarroch 2000 5.3 bn €
Tiscali Italia Spa Telecommunication Sa Illetta 744 316 mio €
Via A. Diaz,
Abbanoa Spa Water Purification - 164 mio €
79
Business Plan - MTM VII - Group 2 18

19. Great effort of Cagliari to become a tourist destination at a relevant International level,
creating important projects for the city:
 Expansion of the “MetroCagliari” to create new lines (among which the creation of a
line that connect Cagliari’s municiplaities with the airport Elmas, and this last with the
Central Station,metro and Port of Cagliari).
 New exhibition centre, a new archaelogical park of Tuvixeddu, new Univerisity campus
of Viale la Playa with theaters, libraries and sports centre in it.
 Terminal for Cruise Ships at the Ichnusa Port: within the year 2012.
 Redesign of the waterfront at Maritime Station and Darsena by the end of 2011.
 Creation of a platform for general aviation (the terminal is already ready and will be
open soon) and enlargment of the platform for commercial aviation, and creation of a
new area for cargo.
 Cagliari will not only be a leisure and seasonal destination, but a all year round
business centre.
Business Plan - MTM VII - Group 2 19

20. Number
Price Price
Hotel Name Stars of
Weekday Weekend
Rooms
T Hotel Cagliari
Via dei Giudicati, 66
**** 207 € 99 € 159
Italia Hotel
Via Sardegna, 31
*** 108 € 77 € 77
Holiday Inn Cagliari
Viale Umberto Ticca, 23
**** 92 € 104 € 124
Quadrifoglio Hotel
Via Giuseppe Peretti, 10
*** 87 € 90 € 90
Grillo Hotel
**** 84 € 84 € 94
Via Carmine, 132
Sardegna Hotel
**** 84 € 120 € 120
Via Lunigiana, 50
Business Plan - MTM VII - Group 2 20

21. The location, in a key junction of highways, is in the middle of a very
industrialized area, within a reasonable distance from Milan city
centre, the trade fair in Rho, Milan Linate airport and the nearby area of
Brianza, which has both an industrial and leisure attractiveness.
Legend:
Location
Airports
Points of interest
Business Plan - MTM VII - Group 2 21

22.  Main Railway Stations connected by lines 710 and 711:
 Sesto San Giovanni, Lissone, Milano Greco Pirelli and Milan Central Railway
Station
 Highways:
 A4 Milan – Venice
 A51 Milan East Ringroad
 A52 Milan North Ringroad
 Via Nuova Valassina
 Via Valtellina
 MainMetrotramway (Tram line number 31): After 4 years’ wait, the new line is
finally working: 25 stops in 8.5 km, from Viale Zara in Milan, through the future
M5 Stop, directly to the commercial axis of Cinisello Balsamo; it will connect
Cinisello Balsamo to many imortant points of interest: Bicocca University,
Arcimboldi Theater, Parco Nord, Villa Ghirlanda and the Photography Museum.
Airports:
 Linate (25 Km)
 Orio al Serio (41 Km)
 Malpensa (53 km)
Business Plan - MTM VII - Group 2 22

23. RINGROADS NUMBER OF VEHICLES
NORTH AREA
•SP44 bis Milano - Lentate (via nazionale dei giovi)
•SP ex SS 35 nord (Milano-Meda)
20.000 -110.000 vehicles per day
•SP 9 Valassina:
• SP 5 of “ Villa di Monza” (extension of viale Fulvio Testi)
EAST AREA
•sp 14 Rivoltana
•sp ex ss 415 Paullese : 60.000 -70.000 vehicles per day
Ringroad East A51 between San Donato and Cologno Monzese 140.000-160.000 vehicles
HIGHWAYS NUMBER OF VEHICLES
•Barrier Milano-Nord Autostrada A8-A9
•Barrier Milano-Est Autostrada A4 ramo Venezia 130.000 vehicles per day
Stretch with more traffic:
Between the crossroad A8/A9 and the crossroad A8/A50 in the
190.000 vehicles
Lainate and Rho municipalities
Business Plan - MTM VII - Group 2 23

24. Arrivals Overnights
2005 - 2010 2005 - 2010
6,000,000 12,000,000
5,500,000
11,000,000
5,000,000
10,000,000
4,500,000
4,000,000 9,000,000
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
% on Provinces’ % on Province’s
2010 Arrivals Overnights
Arrivals Overnights
CINISELLO
BALSAMO 55,953 113,496 3.27 % 3.58 %
Source: Osservatorio Turismo – Settore Turismo Provincia di Milano
Business Plan - MTM VII - Group 2 24

25. Variation of the population 2003-2010
74.500
74.153
73.976
73.935
74.000
73.659
73.500
Residents
73.772
73.683
73.000 73.216
72.852
72.500
72.000
2003 2004 2005 2006 2007 2008 2009 2010
Year
Source: ISTAT
Business Plan - MTM VII - Group 2 25

26. Number of
Name Industry Address Turnover
Employees
Davide Via Franco Sacchetti
Campari Beverage 20 - Sesto San 2100 1 bn €
Milano Spa Giovanni
Sony Italia Via Galilei Galileo 40
Electronics 250 564 mio €
Spa
Epson Italia Information Via M. Viganò De 347,5 mio €
180
Spa Technology Vizzi, 93/95
Business Plan - MTM VII - Group 2 26

27.  Creation of a new Municipality
building that can put together
all the offices that are currently
displaced in different locations.
To finance this project, the
Municipality decided to sell out
an area in the city centre
through a redevelopment
competition.
 Cinisello Agenda 21: new
projects to make the city more
sustainable
 New parking areas for the Expo
2015
 Creation of the M5 underground
line, that can connect Cinisello
Balsamo to other strategic ties of
Milan and downtown
Business Plan - MTM VII - Group 2 27

28. Hotel Name Number of Price Price
Stars
Rooms Weekday Weekend
NH Concordia
Viale Edison (Via Lama), 20099 Sesto San Giovanni
**** 155 €119 €73,95
CALTAHOTEL Grand Hotel Barone di Sassj
Via Padovani 38, 20099 Sesto San Giovanni (MI)
**** 145 €130 €80
Holiday Inn Milan Nord-Zara
Via Cornaggia, 20092 Cinisello Balsamo, Italia
**** 128 €109 €69
Hotel Ora City Milano Bresso
Via XXV Aprile 49/51, 20091 Bresso (MI)
**** 106 €95 €95
Best Western Premier Hotel Monza e Brianza Palace
Viale Brianza 160/166 , 20092 Cinisello Balsamo
**** 105 €116 €91
Hotel Abacus
Via Monte Grappa 39, 20099 Sesto San Giovanni
**** 94 €90 €55
Best Western Falck Village Hotel
Viale Italia 598, 20099 Sesto San Giovanni
**** 80 €95 €75
As Hotel Monza
Viale Lombardia, 76/78, 20052 Monza, Italia
**** 66 €77,27 €86,26
Business Plan - MTM VII - Group 2 28

29. The location, close to the highways and within walking distance from
Mestre railway station, allows to reach Venice and the Airport in few
minutes. Mestre’s city centre is only few hundred metres away.
Legend:
Location
Airports
Points of interest
Business Plan - MTM VII - Group 2 29

30. January-April 2010 % January-April 2011 % Var. % 10-11
Arrivals Presences Arrivals Presences Arrivals Presences Arrivals Presences Arrivals Presences
Old Town
555.208 1.560.093 63% 72% 669.526 1.737.731 63% 70% 20,6% 11,4%
Centre
Lido 30.200 81.022 3% 4% 42.309 110.577 4% 4% 40,1% 36,5%
Mestre-
289.591 536.213 33% 25% 344.022 620.009 33% 25% 18,8% 15,6%
Marghera
Total Venice
874.999 2.177.328 100% 100% 1.055.857 2.468.317 100% 100% 20,7% 13,4%
Municipality
Source: Venice Tourism Board Statistics Dept.
Business Plan - MTM VII - Group 2 30

31. Passengers departures Passengers arrivals
3,700,000 3,700,000
3,520,207 3,342,777 3,512,292
3,346,293
3,500,000 3,500,000
3,300,000 3,300,000
3,424,436 3,141,601 3,430,040
3,409,207 3,423,782
3,100,000 3,100,000
3,155,645
2,900,000 2,900,000
2,700,000 2,894,841 2,887,254
2,700,000
2,500,000 2,500,000
2005 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010
Source: SAVE Spa
Business Plan - MTM VII - Group 2 31

32. Variation in number of inhabitants 2001-2011*
94,000
89,506
92,000
88,193
89,676
90,000
88,027
88,000
88,197
86,000
84,000
82,000
80,000
2001 2005 2007 2009 2011
* Population of Mestre-Carpenedo Municipality
Source: Venice Tourism Board Statistics Dept.
 As for number of inhabitants, Mestre ranks 18° among Italian
cities, and is the 3° city in the Veneto Region.
Business Plan - MTM VII - Group 2 32

33. Number of Turnover
Name Industry Address
Employees (Euro)
Cantiere
Navale Via dell’ Azoto
8500 3.26 bn €
Marghera Shipbuilding 6B, Marghera
(Fincantieri)
V. Treviso 99,
Aprilia Motorbikes - 1.2 bn €
Scorzè
San Via Kennedy 65,
Mineral Water 2500 837 mio €
Benedetto Scorzè
Business Plan - MTM VII - Group 2 33

34. Price Price
Name Stars Rooms
Weekday Weekend
Delfino
Corso del Popolo, 211
**** 126 100 € 80 €
Venezia
Via Teatro Vecchio, 5
*** 120 93 € 83 €
Antony
Via Orlando, 182
**** 114 86 € 86 €
Best Western Hotel Bologna
Via Piave, 214
**** 109 129 € 129 €
Centrale
Piazzale Donatori di Sangue, 14
**** 99 75 € 75 €
Ambasciatori
Corso del Popolo, 221
**** 94 99 € 89 €
Elite
Via Forte Marghera, 119
**** 85 94 € 94 €
Hilton Garden Inn
Via Orlando, 1
**** 82 175 € 175 €
Tritone
Viale Stazione, 16
**** 60 95 € 101 €
Plaza
Viale Stazione, 36
**** 51 149 € 129 €
President
Via Fonte Marghera, 99/a
**** 51 95 € 95 €
Michelangelo
Via Fonte Marghera, 69
**** 50 100 € 100 €
Business Plan - MTM VII - Group 2 34

35.  Tram cittadino (Urban Tramway)
 Passante of Mestre (Suburban Train)
 Surface Metro Line
 Sublagunare (Under the Lagoon Line)
 New Hospital of Mestre
 Parchi di Mestre (Mestre’s Parks)
Business Plan - MTM VII - Group 2 35

36. Number of Average Price
Location Reasons
Rooms per Room
• Medium – low occupancy rate in the city,
Cagliari 80 € 60 only 80 rooms.
• Average price lower than competitors’.
• Increasing arrivals, good occupancy: 100
Cinisello rooms.
100 € 60 • Price is lower than the average, but there
Balsamo
are only 4 stars hotels in the area.
• Increasingly and on going demand:120
rooms.
Mestre 120 € 60 • Price is lower than average, because all
hotels are very expensive because of
their location.
Business Plan - MTM VII - Group 2 36

37. Cagliari
2011 2012 2013
Number of rooms 80 80 80
Average daily rate ADR
60 62 64
(VAT incl.)
Occupancy 60% 68% 75%
Number of employees 9 11 12
Room Revenues (VAT excl.) € 955.636 € 1.119.156 € 1.265.223
F&B Revenues (VAT excl.) € 143.345 € 162.458 € 182.915
Total Revenues (VAT excl.) € 1.098.982 € 1.281.615 € 1.448.138
Total Costs € 706.338 € 699.784 € 767.051
EBITDAR € 392.644 € 581.830 € 681.086
EBITDA € 112.644 € 294.830 € 386.911
PBT € 46.644 € 228.830 € 320.911
% PBT on Total Revenues 4% 18% 22%
Profit Margin -1% 11% 15%
Total Investment € 6.400.000
ROI -0,20% 2,22% 3,38%
Business Plan - MTM VII - Group 2 37

38. Cinisello Balsamo
2011 2012 2013
Number of rooms 100 100 100
Average daily rate ADR
62 64 65
(VAT incl.)
Occupancy 65% 70% 75%
Number of employees 10 11 12
Room Revenues (VAT excl.) € 1.337.227 € 1.476.093 € 1.621.067
F&B Revenues (VAT excl.) € 194.114 € 209.045 € 229.577
Total Revenues (VAT excl.) € 1.531.341 € 1.685.139 € 1.850.643
Total Costs € 917.683 € 851.084 € 926.397
EBITDAR € 613.658 € 834.054 € 924.247
EBITDA € 213.658 € 424.054 € 503.997
PBT € 131.158 € 341.554 € 421.497
% PBT on Total Revenues 9% 20% 23%
Profit Margin 3% 13% 15%
Total Investment € 8.000.000,00
ROI 0,52% 2,79% 3,59%
Business Plan - MTM VII - Group 2 38

39. Mestre
2011 2012 2013
Number of rooms 120 120 120
Average daily rate ADR (VAT
62 64 65
incl.)
Occupancy 65% 70% 75%
Number of employees 11 12 12
Room Revenues (VAT excl.) € 1.604.673 € 1.771.312 € 1.945.280
F&B Revenues (VAT excl.) € 279.524 € 301.025 € 330.590
Total Revenues (VAT excl.) € 1.884.196 € 2.072.337 € 2.275.870
Total Costs € 1.065.811 € 1.002.949 € 1.060.684
EBITDAR € 818.386 € 1.069.388 € 1.215.187
EBITDA € 278.386 € 515.888 € 647.849
PBT € 179.385,65 € 416.888,32 € 548.849,22
% PBT on Total Revenues 10% 20% 24%
Profit Margin 4% 13% 17%
Total Investment € 9.600.000,00
ROI 0,70% 2,83% 3,96%
Business Plan - MTM VII - Group 2 39

40. Thank for
Your at ention!
Business Plan - MTM VII - Group 2 40