Joseph Haley and Steve Bolton are real estate developers and business partners, specifically, vacation resorts. In the following article, Joe Haley of Red Frog and Steve Bolton of Red Frog discuss why now is a great time to get into the resort business.
And while it seems like a daunting and expensive task, there are some clear steps to take to develop a successful resort destination that will be popular for decades to come.
Rest and relaxation never go out of style. That’s why the resort industry thrives even during unstable economic times.
While there are reportedly 700,000 resorts and hotels worldwide, there appears to always be room for more. The resort industry is still worth an estimated $570 billion, and that figure is sure to rise.
Conduct a Resort Feasibility Study
Steve Bolton of Red Frog says to think of a feasibility study as the plan before the business plan. It’s a critical first step that looks at the overall prospects of a resort to inform how and when to launch — or not launch at all.
A feasibility study offers a detailed analysis of everything from overall resort trends and the estimated cost of development to the threat of area hospitality competitors.
It covers the good and the bad and everything in between. Financially, a market analysis will establish how risky the development may be for builders, owners, and investors.
Joseph Haley explains that there are numerous consultant businesses around the world that specialize in evaluations that go as far as describing traffic patterns. No stone is left unturned.
Feasibility studies often include how much specific rooms within the resort will make and what the monthly occupancy may look like. Some offer suggestions on sustainability and design.
In an age when travelers increasingly want unique travel accommodations with a range of attractive perks, Joe Haley says that resort developers need to commit to a stand-out concept that blends profitability with customer engagement.
Resort developers should spend as much time as needed to think about an overall creative vision and a way to establish a brand that will resonate. Steve Bolton of Red Frog says that a resort’s potential location may guide a vision or force it to be tweaked a little bit.
Guests at ski resorts will have different expectations than guests at beach resorts. Tourists from different countries may also have different preferences.
Craft a Business Plan
Plans are always essential for any business, but particularly vital for resorts according to Joe Haley. A comprehensive business plan created from feasibility studies, site visits, and speaking with different construction teams offers a strategy for success in the short- and long term.
Resort business plans should include executive summaries of the project, its expected growth, and goals for revenue. But it should also keep the guest experience at the forefront of the plan.
Every country, state, and city has its own regulations related to resort construction and location. They often dictate the height of buildings and the need for open spaces. There may be land easements to consider, or rules related to public beach access, flight paths, and channels for water run-off.
In some locales, at least a part of the resort integrates sustainable construction and other green elements.
Financing and Construction
When the vision is clear and development gets the OK, Steve Bolton of Red Frog explains that securing financing is the focus. There should be a financing structure that finalizes the equity structure. Budgets and contracts with construction teams and project managers should be selected.
Once construction begins, it requires monitoring, so the work stays on budget and sticks to a pre-determined schedule. Construction compliance — especially involving safety — will often be investigated by inspectors or other regulatory organizations.
Vendor contracts and occupancy permits will also need to be secured.
Joseph Haley of Red Frog explains that construction is the longest part of resort destination development. It’s standard or a project to take as much as two years to complete.
A development vision for a resort doesn’t just include design and revenue. Once construction enters its second year, it’s essential to develop a marketing plan that is targeted, powerful and reflects the resort brand. Both traditional and digital marketing platforms should be considered.
A market analysis will help pinpoint the audience for such efforts. The resort may be in an area popular with seniors, or it could be a vacation hotspot for millennials. Steve Bolton of Red Frog explains that it may be located in a luxurious area but could be somewhere where the tourist expenditures fall into the moderate category. Whatever the case, the marketing should have a consistent voice and authentic message according to both Joe Haley and Steve Bolton of Red Frog.
Personnel will be the lifeblood of the resort. The operations team is the one that will always be on the ground, running the day-to-day activities and managing guest expectations. A resort is only as good as the people it hires. Take time to find a solid team with experience that will exceed the call of duty to make the resort successful.