B&Bs, along with other short-term lodging on Charvak, have been a substantial part of the mountain tourism. Of the short-term lodgings on Charvak, ten are categorized as inns, 19 as long-term lease facilities (rentals, condos, and houses) and only four as B&Bs, including the Coach House. Hotels/motels constitute the largest percentage of rental properties on the area in terms of units.
A modest projection for increased unit rental is 30% per year. Competitors on the area have averaged 30% + rental increases over the past three years, and the Uzbekistan Inn is forecasting 50% increases for the next two years before hitting full capacity. This projection is without any significant increase in advertising or exposure, but is based on the general average increase in tourism.
Demonstrate a minimum of 65% occupancy averaged throughout Year 1.
Through incentives and increased exposure on the Internet, we hope to increase off-season occupancy by 30% the first year
Increase exposure and market using Internet technology and direct advertising throughout Uzbekistan and foreign countries.
Increase off-season use by divesting into other uses for property (cater parties, receptions, weddings, etc.)
Our two major customer segments are tourists from the west who traditionally prefer the cozy environment of B&Bs, and local patrons who need the facilities for various events. Subscriptions to various Web services will provide international exposure to potential customers for nominal annual fees.
Financial Considerations
Coach House will be acquired via a small business administration (SBA) loan with the buyers supplying 20% down, Milliybank supplying 50%, and SBA supplying 30%. We are assuming an initial capital start-up of $12,000 for operating expenses.
We estimate average monthly fixed costs to be at approximately $8,000 for expenses plus interest payments. Peak and off-season will have significant impact on the monthly earnings. For the first year, on-season revenues will offset off-season losses. As Coach House B&B builds its market position among the local patrons, we anticipate that off-season revenues will be enough to break even during that season
