Feasibility Study for Capsule Hotel

This report presents a comprehensive feasibility study for establishing a capsule hotel in Singapore. It evaluates various aspects including market potential, financial viability, design concepts, and legal requirements. The study highlights the growing trend of capsule hotels and their appeal to both local and foreign tourists, emphasizing the strategic location and innovative design that cater to modern travelers. The analysis concludes that the proposed hotel is likely to succeed due to its unique offerings and favorable market conditions.

Running head: FEASIBILITY STUDY 1
Feasibility study.
Student Name
Institution

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Contents
Introduction......................................................................................................................................3
Methodology....................................................................................................................................4
Concept and design..........................................................................................................................4
Marketing.........................................................................................................................................5
Finance.............................................................................................................................................5
Legislation.......................................................................................................................................6
Location...........................................................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction.
Initially, people invested in different business ventures before carrying out any
investigation to determine if the venture could be successful or not. This trend was the reason
behind many business ventures failing to meet their objectives and achieve their mission and
vision. With time people and organizations realized that having capital was not all that was
needed to succeed in business operations. The need to analyze various aspects of the business
was born. This report is written to define business feasibility study, the purpose, and role of the
feasibility study and evaluate if developing capsule hotel in Singapore will be a viable venture.
Feasibility study refers to evaluating and analyzing a business project to determine if the
business venture will be viable. The feasibility study has various components which include the
description, market feasibility, technical feasibility, organizational feasibility and financial
feasibility (Reddy, et al. 2013). The description is concerned with determining if the product and
services to be offered will attract customers and if the mode of delivering the products and
services will be efficient. Market feasibility is responsible for describing the market for the
products, potential buyers, sales estimation and competition. It analyses if the venture will be
successful in terms of the market. (Burke, 2013). Technical feasibility analyses if the venture has
the necessary technology to enable the business to be effective and efficient. Organizational
feasibility analyses if the legal structure of the business, organizational structure and professional
background of the business will enable the venture to succeed. Financial feasibility is concerned
with if the venture funding will be enough and if the invested capital will bring the expected
returns on investment.
The purpose and role of the feasibility study are to test the viability of a business project
so that an organization does not invest in a venture that will not succeed due to various factors

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such as competition. The feasibility study also allow a business venture know potential
competition and obstacles that that business may face in the course of its operations and prepare
adequately for such obstacles (Kuyken, et al.2013). A feasibility study can also be used to attract
investors to invest in the business venture hence enabling the business to have the required
capital to start the business project. Feasibility study prevents wastage of resources as it
determines if a project is viable or not and also highlights the process and activities that the
business should follow if it needs to be successful.
Methodology.
This report has been written with information gained from secondary sources of data. The
sources include journals related to capsule hotels, websites with capsule hotel content,
government reports, business publications, books, magazines. The reports used include statistic
Singapore and Singapore hotel association reports.
Concept and design.
Time capsule hotel concept and design will enable it to succeed in this hospitality and
tourism industry. Singapore has a higher living standard and the reason behind designing such a
comfortable hotel as it will attract many customers. The hotel is also designed for local and
foreign tourism (Papadaskalopoulos, & Strbac, 2013). The design of the hotel enables tourists to
feel comfortable and get the value for their money. The hotel's facilities can only be termed as
adventurous as it is like space craft and this will attract many tourists who will want to
experience such offers which are not provided by other hotels in Singapore.
The design of the hotel has lockers for keeping valuables of tourists. This will provide the
needed security and visitors will feel comfortable while in this rooms. The hotel also offers free
Wi-Fi and charging ports facilities which are offered by few other hotels in Singapore. The

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design of the hotel has offered facilities for controlling noise. This helps to reduce disturbance
when tourists are relaxing, reading magazines and playing games. This provides competitive
advantage over other hotels
Marketing.
Singapore has been rated as one of the most attractive tourist spots in Asia. Singapore has
also received numerous awards for the best tourist sites in the world. This implies that this
country receives many tourists both local and foreign ones. This creates a need to establish a
world class hotel that will cater for the comforts of many tourists. Time capsule hotel will have
the required market as this country receives many tourists (Cruise Critic, 2017). Tourists will be
the primary market of capsule hotel because it has the right facility to attract as many tourists as
possible. Local citizens who may be stranded in Singapore will also provide a secondary market
for capsule hotel if they fail to catch their transport means.
Time capsule hotel is also located near many near many entertainment joints. Young
youth and teenagers in Singapore like to have fun by staying late in night clubs and pubs during
weekends and even week days. This will provide a secondary market for the hotel as the fun
lovers will not be able to access transport means to their homes. Drunkards will also provide
secondary market because they will not be able to drive to their homes because it is illegal to
drink and drive. (Zafar, et al.2013). This means Time capsule hotel will have enough market to
enable it to succeed in hospitality and tourism industry in Singapore.
Finance.
To develop such a world class hotel, Time capsule hotel will have to set aside a
significant amount of financing to ensure that the hotel is designed as expected. This will require
the hotel management to look for investors who will inject their funds in this world class hotel.

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The investment in this facility has led to the creation of comfortable hotel that will attract many
foreign and local tourist (Shah, & Maibach, 2013). The tourist will bring in the required revenue
to enable this facility run efficiently and be maintained well to maintain its adventurous facilities.
The revenue estimate per year will be $541,728. This revenue is good enough to enable
any business to operate well and achieve its objectives. Time capsule hotel should, therefore, be
established in Singapore (Singapore Tourism Board, 2017). This is because it has a ready market
that will enable it to gain enough revenue. Chances of making a financial loss a very minimal.
The price for rooms offered by Time capsule hotel is pocket-friendly. The price is also
equivalent to the value provided. This will stop the perception that the hotel is expensive and this
will help in attracting more tourists who bring foreign income. The revenue is good enough;
hence capsule hotel will be successful.
Legislation.
In Singapore there few regulations needed so that one can establish a hotel. This will
enable Time capsule hotel to start operations as quickly as possible as there are no long
procedures to be followed to operate a hotel (Hawksford Group, 2017). Time capsule hotel will
need to have a few licenses such as Singapore Companies Registration, food and entertainment
licenses and ACRA. This trend has encouraged many investors to invest in hotels as the
regulations favor them. Fewer legislation bureaucracies also mean that it is very cheap to register
and operate a hotel in Singapore. The Time capsule hotel will, therefore, be able to commence its
operations as quick as possible.
Singapore as a tourist’s attraction spot has also enacted laws that favor hospitality and
tourism sector (Donker, et al.2013). The government of Singapore has enacted laws that
encourage the growth of tourism sector as this sector creates a lot of employments to many

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sectors, helped in improving terms of trade, led to urbanization of cities in Singapore and
bringing foreign income. The legislation favors this sector as it has promoted globalization in
Singapore and this has helped to improve the economy of Singapore to a large extent. The laws
in Singapore support Time capsule hotel, and without doubt, the hotel will succeed.
Location.
Time capsule hotel will be located in Clarke Quay which is in the center of the city. This
enables Time capsule to be easily accessible by foreign tourists who fly into the country. The
ease of access will provide the convenience needed by tourists. Clarke Quay is referred to as the
hotspot of entertainment in Singapore (Land Transport Authority, 2016). This location will
enable the hotel to be near the secondary market which comprises of drunkards who are not able
to drive themselves home, young youth and teenagers who party and have fun till late, the guys
who are not able to catch the train as there is a train station nearby. This will enable the hotel to
succeed as it is located in a convenient location that favors its operations.
Conclusion.
Capsule hotels are growing rapidly because they offer facilities which are not provided
by other hotels. These hotels are becoming more and more known because they offer state of the
art facilities that make their customers more comfortable and secure as they provide enough
security for customer and tourists valuables (Othman, 2015). The hotels are also located in areas
that are populated and this enables them to have access to a large market. The capsule hotels are
charge affordable prices, and this attracts many customers. Capsule hotels carry out feasibility
study before commencing business ventures in different countries and that is the reason behind
their success as they only invest in viable business projects.

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References
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Cruise Critic. (2017). Cruise Critic Cruisers’ Choice Destination Awards 2017. Retrieved from
https://www.cruisecritic.co.uk/memberreviews/destination-awards/asia/
Donker, T., Petrie, K., Proudfoot, J., Clarke, J., Birch, M. R., & Christensen, H. (2013).
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Hawksford Group. (2017). Guide to setting up a hotel in Singapore. Retrieved from
https://www.guidemesingapore.com/business-guides/industry-guides/hotel-
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Othman, L. (2015). Capsule hotels, a growing trend in Singapore. Retrieved from
http://www.channelnewsasia.com/news/singapore/capsule-hotels-a-growing-trend-in-
singapore-8231942

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