Brief
Litmus Leisure was invited to evaluate and complete an analysis of existing hospitality catering options. This involved a review and assessment of the financial viability of the potential extension of the events catering facilities within an existing property (in line with design options provided by architects).
A feasibility study for each of the options was constructed, identifying the headline implications of delivering an additional new event facility and the potential return on the investment to identify the best value option.
In addition, we were asked to review the public/day visitor catering offer and facilities to identify ways in which to increase revenue, make better use of existing spaces, including the outdoor areas, and produce an operational sales plan to drive new profitable streams of catering revenue.
Approach
We initially met and consulted with key stakeholders, followed by a full site survey and an in-depth review of the architects’ plans for the proposed development of the building. A financial feasibility report was constructed to identify the potential risk and reward for each of the four options that were proposed. The review was to support a business plan to be submitted to the Council Cabinet. This involved analysing current trading patterns and assessing the ability of the market place, to provide the required goods and services.
Outcomes
The initial report advised on the headline considerations associated with the development of the new facility, particularly focusing on the likely sales and associated concession and room hire revenue that the Council could expect over a five-year period in a city that has a very competitive marketplace. Our report informed the council of probable revenue streams for each option, plus identifying the costs, potential key risks and return on investment for each of the four options. Three detailed packs were produced for the client:
- Commercial Case: An assessment of the ability of the marketplace to provide the required goods and services and the attractiveness of any future deal to potential service providers, including some analysis of risk apportionment and supporting charging mechanisms.
- A presentation pack of the same information.
- The full and detailed financial appraisal for the four options.