Considerations in Resort Considerations in Resort Planning and DevelopmentPlanning and Development

““The growth of a popular resort The growth of a popular resort destination does not necessarily destination does not necessarily coincide with the development of great coincide with the development of great resort properties. On the other hand, resort properties. On the other hand, the construction of a great resort hotel the construction of a great resort hotel may precipitate the development of a may precipitate the development of a great resort destination”great resort destination”Chuck Y. GeeChuck Y. Gee

Special Considerations in Special Considerations in Planning and DevelopmentPlanning and Development

EconomicEconomicSocialSocialEnvironmentalEnvironmental

Economic ConsiderationsEconomic Considerations Target marketTarget market Size and speed of Size and speed of

developmentdevelopment InvestmentInvestment PROFITPROFIT

Economic ConsiderationsEconomic ConsiderationsThe market outlookThe market outlook Market feasibility studyMarket feasibility study Develop a resort based on what Develop a resort based on what

the market wantsthe market wants CompetitionCompetition Sustainable rate of developmentSustainable rate of development Markets changeMarkets change

Economic ConsiderationsEconomic ConsiderationsCapital requirementCapital requirement Investments in non-revenue Investments in non-revenue

producing amenitiesproducing amenities Short-term loans from financial Short-term loans from financial

institutionsinstitutions Capital intensive businessCapital intensive business

Economic ConsiderationsEconomic Considerations InvestmentsInvestments Heavy costs in fixed assetsHeavy costs in fixed assets Low ROI in the early years of Low ROI in the early years of

operationoperation Long payback period; low cash Long payback period; low cash

flowsflows

Aulani Resort & SpaAulani Resort & Spa 21 Acre land area21 Acre land area USD800 M investmentUSD800 M investment 359 hotel rooms359 hotel rooms Estimated 1000 jobs createdEstimated 1000 jobs created 481 vacation villas 481 vacation villas 14,545 sq. ft. conference center 14,545 sq. ft. conference center

18,000 sq. ft. spa 18,000 sq. ft. spa Full service fitness center Full service fitness center Saltwater snorkel lagoon Saltwater snorkel lagoon Waikolohe Stream Waikolohe Stream Conservation pool Conservation pool Wedding pavilion Wedding pavilion Two swimming pools Two swimming pools Aunty’s Beach HouseAunty’s Beach House kids’ club kids’ club Custom-planned adventures & excursions Custom-planned adventures & excursions `AMA`AMA beach restaurant `AMA`AMA beach restaurant

MakahikiMakahiki buffet restaurant buffet restaurant Off the HookOff the Hook beach bar beach bar `Ōlelo Room`Ōlelo Room buffet bar buffet bar Horseback riding Horseback riding Dolphin-spotting tours Dolphin-spotting tours Kayaking Kayaking Sunset-facing hot tubs Sunset-facing hot tubs

Social ConsiderationsSocial Considerations Find out what the social effects of resort Find out what the social effects of resort

development in the host communitydevelopment in the host community Involve the host community in the Involve the host community in the

planning and development processplanning and development process support of community based tourism support of community based tourism

development that, in the end, creates a development that, in the end, creates a larger social acceptance of tourism larger social acceptance of tourism benefitsbenefits

Social ConsiderationsSocial ConsiderationsEmploymentEmployment Attracts newcomers for newly created Attracts newcomers for newly created

jobsjobs Creates jobs in two ways: construction Creates jobs in two ways: construction

worker; resort operations staffworker; resort operations staff Most resort jobs do not require highly Most resort jobs do not require highly

skilled staffskilled staff

Social ConsiderationsSocial ConsiderationsEmploymentEmployment Employs high percentage of women Employs high percentage of women Many resort jobs may be a source of Many resort jobs may be a source of

tension in the host communitytension in the host community Resort operations typically create Resort operations typically create

secondary jobssecondary jobs

EmploymentEmployment Starwood Hotels & Resorts Worldwide, Starwood Hotels & Resorts Worldwide,

Inc.’s brand names include Sheraton, Inc.’s brand names include Sheraton, Westin, The Luxury Collection, St. Regis, Westin, The Luxury Collection, St. Regis, W, Le Meridien, Four Points by Sheraton, W, Le Meridien, Four Points by Sheraton, Aloft and Element. Aloft and Element.

As of December 31, 2011, Starwood As of December 31, 2011, Starwood Hotels & Resorts Worldwide, Inc. Hotels & Resorts Worldwide, Inc. employed approximately 154,000 people employed approximately 154,000 people worldwide. worldwide.

ROYAL CARIBBEAN CRUISES LTD.ROYAL CARIBBEAN CRUISES LTD.

As of December 31, 2010, we As of December 31, 2010, we operate 40 ships under five cruise operate 40 ships under five cruise brands, with a selection of worldwide brands, with a selection of worldwide itineraries ranging from two to 18 itineraries ranging from two to 18 nights that call on approximately 420 nights that call on approximately 420 destinationsdestinations

EmploymentEmployment As of December 31, 2010, we employed As of December 31, 2010, we employed

approximately 5,200 full-time and 850 approximately 5,200 full-time and 850 part-time employees worldwide in our part-time employees worldwide in our shoreside operations. We also employed shoreside operations. We also employed approximately 52,000 shipboard approximately 52,000 shipboard employees. As of December 31, 2010, employees. As of December 31, 2010, approximately 80% of our shipboard approximately 80% of our shipboard employees were covered by collective employees were covered by collective bargaining agreements. bargaining agreements.

Social ConsiderationsSocial ConsiderationsGuest SpendingGuest Spending Resort spending has an impact Resort spending has an impact

on the ‘quality of life’ of the on the ‘quality of life’ of the resort communityresort community

Also a form of export selling by Also a form of export selling by bringing outside revenue into the bringing outside revenue into the communitycommunity

Social ConsiderationsSocial ConsiderationsRecreational developmentRecreational development Large tract of land required for Large tract of land required for

outdoor recreational amenitiesoutdoor recreational amenities Recreational resources for resort Recreational resources for resort

guests may enhance acceptance guests may enhance acceptance or may generate conflict between or may generate conflict between resort and the communityresort and the community

Social ConsiderationsSocial ConsiderationsRecreational developmentRecreational development The volume of guests expected to The volume of guests expected to

use recreational facilities are use recreational facilities are important considerationsimportant considerations

Resorts operating near publicly Resorts operating near publicly owned recreational facilities have owned recreational facilities have no control over use of such facilitiesno control over use of such facilities

Social ConsiderationsSocial ConsiderationsCultural influencesCultural influences EthnicityEthnicity Beliefs, practicesBeliefs, practices Social normsSocial normsReligious influencesReligious influences FaithFaith TraditionsTraditions

Environmental Environmental ConsiderationsConsiderations

Resort development can be Resort development can be an answer to some of the life-an answer to some of the life-threatening environmental threatening environmental problemsproblems

Environmental Environmental ConsiderationsConsiderations

CongestionCongestionGeneralGeneral – refers to traffic – refers to traffic

overloads in open areas where overloads in open areas where public activities take placepublic activities take place

LocalLocal– – refers to the crowding at refers to the crowding at specific points of use in the specific points of use in the resort facilitiesresort facilities

Environmental Environmental ConsiderationsConsiderations

PollutionPollution Pesticides and fertilizers used in Pesticides and fertilizers used in

landscapinglandscaping Exhaust fumes from cars, buses, Exhaust fumes from cars, buses,

light aircraft and other light aircraft and other transportation meanstransportation means

Operation of resort itselfOperation of resort itself

Environmental Environmental ConsiderationsConsiderations

ConservationConservation Effects on the alteration of the flora & Effects on the alteration of the flora &

fauna which are native to the regionfauna which are native to the region

EnhancementEnhancement Changes made in the natural Changes made in the natural

environment should take the form of environment should take the form of restoring the physical surroundingsrestoring the physical surroundings

ReferenceReference Resort ManagementResort Management

By Chuck Y. GeeBy Chuck Y. Gee http://www.rclinvestor.com/p

hoenix.zhtml?c=103045&p=irol-govhighlights

Q & AQ & A

Exercise 2Exercise 2 Cite at least one event that you Cite at least one event that you

may consider as an impact of may consider as an impact of resort development (social, resort development (social, economic and environmental) in economic and environmental) in Boracay Island.Boracay Island.

Explain how this issue affects the Explain how this issue affects the resort business in Boracay.resort business in Boracay.

Boracay Island discussion questionsBoracay Island discussion questions1.1. Describe how the tourists, government, Describe how the tourists, government,

business and host community affect the business and host community affect the resort business in Boracay Island. resort business in Boracay Island.

2.2. Discuss the social, economic and Discuss the social, economic and environmental considerations that positively environmental considerations that positively or adversely changed the resort operations in or adversely changed the resort operations in Boracay.Boracay.

3.3. Describe the political issues and legislative Describe the political issues and legislative measures that affect the resort industry in measures that affect the resort industry in Boracay. Boracay.

2011 – 908, 8742011 – 908, 874 2012 – 1.2M2012 – 1.2M 2013 – 1.5M (estimate)2013 – 1.5M (estimate) Indigenous people of Boracay - AtiIndigenous people of Boracay - Ati Ancestral domain – Boracay Ati Tribal OrganizationAncestral domain – Boracay Ati Tribal Organization Inefficient implementation of national and local Inefficient implementation of national and local

regulationsregulations Climate changeClimate change

“ “ The real culture of Boracay is embedded in the The real culture of Boracay is embedded in the history, collective memory and practices of its history, collective memory and practices of its ancient inhabitants 0 the Atis.”ancient inhabitants 0 the Atis.”

PD 1801 - MarcosPD 1801 - Marcos PD 1064 - ArroyoPD 1064 - Arroyo Indigenous people of Boracay - AtiIndigenous people of Boracay - Ati Poor implementation of national and local regulationsPoor implementation of national and local regulations No existing tourism master plan or land use plan for No existing tourism master plan or land use plan for

resort developmentresort development

Boracay Island key issuesBoracay Island key issues

Coliform; algal bloomColiform; algal bloom Sewage systemSewage system OverdevelopmentOverdevelopment Poor governancePoor governance Water borne diseasesWater borne diseases

Boracay Island key issuesBoracay Island key issues

Non cooperation among resort Non cooperation among resort ownersowners

Environmental and zoning Environmental and zoning regulationsregulations

Water shortage Water shortage Waste disposalWaste disposal Profit vs sustainabilityProfit vs sustainability