1. Investment in a portfolio of luxury holiday resorts and hotels.
Project proposal
Project champion: Charles, Hotels Division Manager

2. Project summary Acquisition of a portfolio of luxury resorts.
Estimated investment: $36m
Background:
Up until now, our divisional focus has been on hotels. We have a portfolio of hotels in major capital cities throughout Australia and South East Asia but we need to expand. I propose we diversify, both geographically and with our product offerings to include luxury resorts. Of course there will be synergies across the group, but with these proposed resorts, we will have entre into other parts of the globe and offer better services around corporate events, weddings etc.
Resort 1 – Philippines ($14.5 million AUD purchase price including start-up costs)
Resort 2 – Brazil ($13.5 million AUD purchase price including start-up costs) - private island
Resort 3 – Caribbean ($8 million AUD purchase price including start-up costs)

3. Current Performance and Projected Financials
Current performance
% change expected post acquisition
 $’000s
Years 1 -2
Years 3-4
Years 5-6
 Years 7 - 8
 Years
Revenue
5,512
↑3%
↑5%
↑8%
 ↑15%
 ↑20%
Labour costs
2,481
No Change
↓3%
↓6%
 ↑8%
Utilities
331 ↑5
 ↑5%
 ↑6%
Marketing and Administration
794
↑6%
Depreciation
441
480
 480
Other
992
Operating profit
473
Note: 1. Any carried forward tax losses to be ignored at the project level.
2. Depreciation determined as a depreciable value of $4.8m over 10 years.