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Contents
Executive Summary:..............................................................................................................................3
Brief Description of Project:..................................................................................................................3
Installed and Operational Capacities:................................................................................................4
Critical Factors.......................................................................................................................................5
Geographical Investment Potential.......................................................................................................5
Potential Target Customers/Markets....................................................................................................6
Project Cost Summary...........................................................................................................................6
Project Economics.............................................................................................................................6
Project Cost.......................................................................................................................................7
Land and Building Requirements.......................................................................................................8
Human Resource Requirement..........................................................................................................9
Utilities and Other Costs..................................................................................................................10
Revenue Generation........................................................................................................................10
References:..........................................................................................................................................11
Key Assumptions:................................................................................................................................11
Wacc....................................................................................................................................................12
Payback Period, IRR, Discounted Payback Period................................................................................13

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Beach Resort Feasibility Report
Executive Summary:

This pre-feasibility study outlines the establishment of a small-scale beach resort in the
picturesque coastal town of Gwadar. The proposed resort aims to provide a comprehensive
seaside experience, accommodating tourists, visitors, vacationers, and leisure travellers.
With direct beach access, it promises a delightful blend of luxurious sea views, comfortable
lodging, delectable cuisine, conference facilities, and a range of recreational activities,
including Jet Skiing, Boating, ATV / Tube Rides, Parasailing, and Snorkelling.
Key Features: The resort will comprise twelve well-appointed guest rooms, a conference
hall, a dining facility, and an open-air dining area. It is designed to cater to approximately 12
families seeking overnight accommodation daily. Additionally, the resort will accommodate
an average of 15 day visitors per day and host approximately 2 conferences, seminars, or
meetings each month. During the peak season (September to March), the resort is expected
to operate at full capacity, while in other months, it will maintain around 40% occupancy.
Ensuring high-quality boarding services, competitive packages, and visitor comfort are
central to the success of this venture.
Financials: The estimated total project cost is Rs. 74.820 million, with a capital investment of
Rs. 68.212 million and working capital of Rs. 6.607 million. Using an equity finance model,
the project's Net Present Value (NPV) stands at approximately Rs. 11.2 million, with an
Internal Rate of Return (IRR) of 21.5% and a Payback Period of 5.48 years. Furthermore, the
project will create employment opportunities for 42 individuals, including the Owners. The
proposed legal business status for this project is a 'Partnership.'
The establishment of this beach resort in Gwadar promises to be a valuable addition to the
tourism landscape of the region. With its strategic location, diverse offerings, and strong
financial viability, it is poised to attract visitors seeking a memorable seaside experience.
This venture not only holds the potential for substantial returns but also contributes to the
local economy by generating employment opportunities.

Brief Description of Project:

The allure of coastal regions in Pakistan, particularly Baluchistan and Sindh, such as Gwadar,
Gaddani, Sonmiani, Ormara, Pasni, Makran, and Thatha, presents a significant investment
opportunity for the establishment of beach resort facilities. These areas offer pristine
beaches and hold immense potential for attracting tourists. This pre-feasibility study lays
out the foundational information for the creation of a beach resort focused on delivering
high-quality tourist services, combining leisure and adventure activities with hygienic
culinary offerings.

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 The envisioned project includes the provision of 12 separate guest rooms for overnight
stays, a conference hall, a dining hall, an area for event setups, and an open-air dining
space. The initial location selected is Gwadar due to existing infrastructure, breathtaking sea
views, and a high influx of visitors. However, alternative locations, such as the beaches of
Karachi and nearby areas, could be considered based on thorough market analysis and
project viability.
The resort's distinctiveness lies in its wide range of recreational and adventure activities,
comfortable accommodations, top-notch cuisine, and spectacular sea views. To achieve this,
the resort will acquire state-of-the-art equipment for activities like Jet Skiing, Boating, ATV
Biking, Tube Riding, Snorkelling, and provide audio-visual facilities for conferences,
seminars, meetings, and parties, tailored to clients' needs.
While the coastal regions of Pakistan remain inviting to tourists throughout the year, the
project anticipates peak business during the winter and spring months, specifically from
September to March, when the weather becomes exceptionally pleasant and visitor
numbers rise. Off-peak season footfall is estimated to decrease to approximately 40% of
peak-season levels.

Installed and Operational Capacities:

As per the installed facilities the proposed resort will enable to render overnight stay facility
to at least 12 families including children’s or around 24 adults per day. Additionally, resort
will also serve 15 day visitors on an average per day and around 2 conference, seminar or
meetings per month.
However, initial operational capacity of the project will be 65% with an annual growth of
10% up to the maximum capacity utilization of 90% in the 5th year of operation. It is
expected that during the peak season (i.e. from September to March), the resort will
operate on optimal capacity utilization whereas during the off-season period the number of
visitors will drop to 50% of the operational capacity achieved in that year.

Total Capacity
Capacity Utilization Off
Capacity Utilization 65% for Utilization Year 1
season 5 Months Year 1
@

Total Installed Capacity Installed Capacity Season @ 100% Year 1 (7 Months) Season 0.65
Description
Room Occupancy 4320 2520 1638 585 2223
Day Visitors 5400 3150 2048 731 2779
Conferences Hall
Events 24 14 9 6 15
Party Setups
(outdoors) 12 7 5 4 9
Moon light camping 1872 1092 710 507 1217
Jet Ski and Power 3510 2048 1331 475 1806
Speed Boat 3510 2048 1331 475 1806
ATV Rides 2808 1638 1065 380 1445
Tube Rides 1404 819 532 190 722
Parasailing 702 409 266 95 361
Snorkeling 702 409 266 95 361

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Critical Factors
Following are critical success factors associated with this business.
Þ Tourism and hospitality service quality is viewed as a multidimensional concept based
on five key aspects; Tangibility, reliability, assurance, responsiveness and
empathy.
Þ Selection of appropriate location near to beach with superb view and easy access to
road is extremely important for the success of this business.
Þ Entrepreneurs prior knowledge and understanding of tour and hospitality operations
business, especially laws and regulations.
Þ Trained and well-groomed human resource with respect to hospitality and service
management to ensure the customer satisfaction.
Þ Large variety of different leisure and adventure activities to choose from, and with
proper safety standards ensured would develop confidence amongst the
customers and would help in their retention.
Þ Offering competitive price and ensuring the delivery quality services on agreed terms
and conditions.
Þ Guest feedbacks should be a regular activity by the management and the viable
recommendations / suggestions should be adopted.
Þ Exceed customer expectations by offering high quality and hygienic food at
reasonable prices with quick turnaround times.
Þ Awareness amongst the general people regarding the safety, comfort and
entertainment opportunities available at the resort.
Þ Marketing and promotion through various channels i.e. catalogue / pamphlets,
outdoor advertisement, hoardings / flex signs, TV & cable ads, and promotion
through social media (Facebook etc.).

Geographical Investment Potential

Baluchistan boasts an impressive coastline spanning over 750 kilometres, adorned with
pristine and unspoiled beaches, lush tropical forests, majestic mountains,
captivating coral reefs, and numerous awe-inspiring landscapes. Despite its
immense tourism potential, the coastal region of Balochistan has historically
received insufficient attention for travel and tourism development. Recent
developments, however, have marked Gaddani, Ormara, and Gwadar as focal
points for investment, both from the government and private sector. The
completion of the Makran Coastal Highway has provided essential infrastructure,
connecting major towns like Gaddani, Sonmiani, Ormara, Pasni, and Gwadar.

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 Furthermore, the Gwadar airport has significantly reduced travel time, enabling
visitors to reach Gwadar from Karachi in approximately 45 minutes and from
Quetta in around 90 minutes. Additionally, the project could also extend to the
nearby beaches along the Indus River, particularly in Karachi and its environs, to
cater to the larger population base in that area.

Potential Target Customers/Markets

The project's target market is expansive and diverse. It encompasses all types of
tourists, whether they are domestic or international travellers. Simultaneously,
the resort could serve as a facility for corporate clients visiting Gwadar for
business purposes, including the hosting of seminars and workshops. Moreover,
the residents of Gwadar and nearby areas represent potential customers who
may seek overnight stays or simply wish to savour seaside dining, lunches, teas,
and engage in adventurous activities. Currently, the region lacks such leisure
facilities. Additionally, local corporate clients would find an attractive venue to
host their corporate events while enjoying the breathtaking coastal landscape and
sea views.

Project Cost Summary

This section presents a concise summary of the project's cost analysis. We have
developed a comprehensive financial model to assess the commercial viability of
the Beach Resort. In-depth assumptions concerning costs and revenues are
outlined herein, with detailed results of the analysis provided in the attached
annexures, including the Income Statement, Cash Flow Statement, and Balance
Sheet.

Project Economics
All the figures in this financial model have been calculated for the estimated revenue of Rs.
33,777,143 in the year one. The capacity utilization during year one is worked out at 65%.
The following table shows the internal rate of return, payback period and net present value
of the proposed venture.

Project Economics if Equity Financed

Description Details
Internal Rate of Return (IRR) 21.5%
Payback Period (yrs.) 5.48
Net Present Value (Rs.) 11,232,742

Project Economics if Equity(50%):Debt (50%)

Description Details
Internal Rate of Return (IRR) 21.5%

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 Payback Period (Yrs.) 5.48
Net Present Value (Rs.) 24,922,992

Assumptions if 50:50
Description Details

Debt (Rs.) 37,456,578

Equity (Rs.) 37,456,578

Interest Rate on Debt 12%

Debt Tenure (Yrs.) 5

Debt Payment / Year 2

However, for further explanation the Project Economics based on Debt:Equity (i.e. 50:50)
Model has also been computed. Based on Debt:Equity model the Internal Rate of Return,
Payback Period and Net Present Value of the proposed project are provided in the table
above.
The projected Income Statement, Cash Flow Statement and Balance Sheet are based on
100% Equity Model.

Project Cost

Following fixed and working capital requirements have been identified for operations of the
proposed business.

Description Amount Rs.

Capital Cost

Land 5,000,000

Building / Infrastructure 40,652,400

Machinery & Equipment 11,598,700

Office Vehicles 5,711,644

Land 5,000,000

Furniture & Fixture 3,339,250

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Pre-Operating Costs 1,130,000

Licensing & Legal Fee 500,000

Office Equipment 280,600

Total Capital Cost 73,212,594

Equipment Spare Parts
Inventory 57,994

Cash 6,549,431

Total Working Capital 6,607,425

Total Project Cost 74,820,019

Land and Building Requirements

The space requirement for the proposed Beach Resort is estimated considering various
facilities including Reception, Lobby, Kitchen, Conference Hall, Dining Hall, Family
Rooms, Open Space, etc. For that purposes around 4 Kanals of land would be
required, which is proposed to be purchased. The estimated cost of land is assumed at
Rs.1,250,000 per kanal, facing a beach at the outskirts of Gwadar. Details of building
and other infrastructure requirements along with estimated costs are provided below.

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 Estimated Area Unit Cost Total Cost
Description (Sq. ft.) (Rs.) (Rs.)
Dining, Conference and Function Hall 2,800 4,000 11,200,000
Guest Rooms with Attached Baths 3,888 4,000 15,552,000
Reception Area and Lobby 360 4,000 1,440,000
Kitchen Area 324 3,200 1,036,800
Manager and Admin accommodation 100 3,200 320,000
Bonfire and BBQ Area 1,800 80 144,000
Terrace Grill (Outdoor Dining) 1,200 1,500 1,800,000
Laundry Area etc. 400 3,200 1,280,000
Accounts/Admin Room 72 3,500 252,000
House Keeping 360 3,200 1,152,000
Washrooms (Other than guest rooms) 360 3,200 1,152,000
House Keeping & Laundry Staff Rooms 336 3,200 1,075,200
Grounds 8,480 80 678,400
Staff Washrooms 216 3,200 691,200
Owner / Manager Office 144 3,500 504,000
Boating and Outdoor Activities Staff Room 144 3,200 460,800
Kitchen Staff Accommodation 120 3,200 384,000
Waiters and Room Service Staff Accommodation 120 3,200 384,000
Sweepers Room 100 3,200 320,000
Security Guard Room 100 3,200 320,000
Store 80 3,200 256,000
Building Design 1 250,000 250,000
Total Construction Cost 40,652,400
Cost of Land 5,000,000

Total Land and Building Cost 45,652,400

Other Costs have been attached in the Excel Sheet.

Raw Material Requirements

The project raw material will primarily be eatable items and drinks required for usage in
the restaurant’s kitchen, that will be procured from the local vendors. Managing the
restaurant inventory is necessary to avoid wastage and to ensure the freshness of
ingredients.
Human Resource Requirement
In order to run operations of proposed Beach Resort smoothly, details of human resources
required along with number of employees and monthly salaries are recommended as under.

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 Monthly Salary
Description No. of Employees
per person (Rs.)
Owner / Manager 1 60,000
Accounts / Admin Officer 1 30,000
Receptionist 1 25,000
Waiters/Servers/Room Service 6 22,000
Boating In charge 1 30,000
Boating Assistants 1 20,000
Snorkeling In charge 1 30,000
Snorkeling Assistant 1 20,000
Outdoor activities In charge 1 35,000
Outdoor activities Assistants 3 25,000
Sweepers 3 20,000
Security Guards 3 20,000
House Keeping Staff 3 20,000
Electrician 1 20,000
Plumber 1 20,000
Gardener 1 20,000
Laundry Staff 2 20,000
Driver 1 20,000
Head Chef 1 80,000
Cooks 3 25,000
Tandoor Operator 3 20,000
Kitchen Helpers 3 20,000
Total 42

Utilities and Other Costs

An essential cost to be borne by the project is the cost of electricity and water. The
electricity and water expenses are estimated to be around Rs. 252,144 per month.
Furthermore, promotional expense being essential for marketing of Beach Resort is
estimated as 5% of revenue in year 1.

Revenue Generation
Based on the capacity utilization of 50%, sales revenue during the first year of operations is
estimated as under.
Description Total Capacity Utilization Year Price per Service Sales

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 1 Revenue (Rs.)

Room Occupancy 0 6,500 14,449,500

Conferences Hall Events 15 20,571 308,571

Party Setups (outdoors) 9 42,857 385,714

Moon light camping 1217 1,950 2,373,429

Jet Ski and Power Boat 1806 2,500 4,515,893

Speed Boat 1806 1,300 2,348,264

ATV Rides 1445 800 1,156,286

Tube Rides 722 1,100 794,200

Parasailing 361 4,500 1,624,500

Snorkeling 361 4,000 1,444,000

Income from meals     4,376,786

Total     33,777,143

References:

Machinery Suppliers

Supplier Name Website Address / Contact

8th Floor, Mega Tower, Main

Electric Appliances https://www.haier.com/pk/ Boulevard Gulberg, Lahore
Ph: -111142437
Mahigeer Diving Equipment
Boating Equipment Karachi

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 Ph: 0313-2009925
401, Century Tower, Gulberg III,
Craft Vision www.craftvisionpk/ Lahore
Ph: 042-34004994
G-21 Goldmine Plaza, Ferozepur
WOODPECKER www.apnafurniture.pk Road, Lahore
Ph: 0331-8999222

Key Assumptions:
Operating Cost Assumption

Description Details
Travelling Expense 2% of administration expense
Communication Expense 7.5% of administration expense
  5% of Revenue in Year 1

Promotional Expenses 1% of Revenue in Year 2-

  Year 10
Depreciation Method Accelerated depreciation
5% on Building / Infrastructure
10% on Machinery & Equipment
Depreciation Rate
and Furniture & Fixture
33% on Computer Equipment
Inflation Growth Rate 10%
Electricity Price Growth Rate 10%
Salaries Growth Rate 10%

Revenue Assumption

Detail
Description s
Sale Price Growth Rate 10%
Jet Ski And Power Boat (% age of Visitors) 25%
Speed Boat (% age of Visitors) 25%

ATV Rides (% age of Visitors) 20%

Tube Rides (% age of Visitors) 10%
   
Parasailing (% age of Visitors) 5%

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 Snorkeling (% age of Visitors) 5%
Total Guest Rooms 12
Average Day Visitors 15
Conferences Hall Events 24
Party Setups (Outdoors) 12
Average Guests Per Party Event 200
Moon Light Camping & Movie Night Events 104
Moon Light Camping & Movie Night Participants / Event 18

Operating Cost Assumption

Description Details
Capacity Utilization Year 1 65%
Capacity Utilization Growth Rate 10%
Maximum Capacity Utilization 90%
Capacity Utilization in Off Peak Season
(%age of Capacity Utilization for that
particular Year) 50%

Wacc

Weighted Average Cost Of Capital

amount Ratio Rates WACC
loan - - 0.12 - Interest rate
capital 74,820,000 1.00 0.18 0.18 ROE rate
total equity 74,820,000 1 0.18 18% Wacc

Payback Period, IRR, Discounted Payback Period

Payback & Discounted Payback Period in years
Year Cashflow Cummulative Cashflow Discounted Cashflow Cummulative Discounted Cashflow
- (74,820,000) (74,820,000) (74,820,000) (74,820,000)
1 8,808,478 (66,011,522) 6,549,431 (68,270,569)
2 12,932,909 (53,078,613) 7,464,812 (60,805,757)
3 17,143,659 (35,934,954) 9,288,214 (51,517,543)
4 20,712,753 (15,222,201) 10,434,160 (41,083,383)
5 3,086,931 (12,135,270) 10,683,408 (30,399,976)
6 25,107,817 12,972,547 1,349,326 (29,050,650)
7 9,300,727 (19,749,922)
8 8,655,019 (11,094,903)
9 8,000,780 (3,094,123)
10 7,359,390 4,265,267
Payback Period in Years 5 years + 12135270/25107817 5.48 years

Discounted Payback Period In Years 9 years + 3094123/7359390 9.42 years

Internal Rate Of Return

Internal Rate Of Return 21.511%

Profitability Index
Profitability Index NPV/Initial Investment 0.149

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Calculations and Values Provided in MS Excel Sheet.