Viability Report

The Client

A resort development company with an established track record of successful, high end projects in the USA and UK, aiming to construct and market a real estate based golf resort in a Mediterranean country

Situation

The Company had successfully transported the US concept of the Owners Club into the UK, but was unsure of the level of demand for a similar product in continental Europe. In the chosen location, golf is domestically weak, and golf tourism is in its infancy. Timeshare is only slowly recovering from the bad name it acquired in the 1990's from disreputable sales techniques, and, fractional villa ownership, now well established in the USA, has only recently been introduced to the European market.

Implications

The Company could not justify to itself or its investors the risk attached to progressing the project, estimated to cost some $30 Million including land costs, without a more informed view of the strength of market demand, including estimates of real estate sales prices and velocities, and golf course visitation levels and membership sales

Needs

The Company needed a financial model that tested the implications of real estate sales and hotel occupancy at variable levels on the viability of the project. Also needed was an independent assessment of the strength of market demand for the concept in a European marketplace

Solution

PTC undertook an analysis of the golf tourism market in Europe and the prospects for attracting club owners to the project from Europe and Nth. American source markets. PTC also analysed property prices and sales velocities in comparable Mediterranean destinations. A development cost profile was built into a financial model and set against estimates of annual sales revenues to enable return on investments to be calculated at different success rates.