INTRODUCTION

In the dynamic realm of tourism development, the initiation of any project demands

thorough scrutiny and strategic planning to ensure its sustainability and success. At

the forefront of this process lie two pivotal stages: the pre-feasibility study and the

feasibility study. These comprehensive assessments serve as guiding beacons,

illuminating the path towards informed decision-making and prudent investment in

tourism ventures.

The pre-feasibility study acts as the preliminary litmus test, offering a cursory

examination of the proposed project's viability. Through an analysis of market

dynamics, technical requirements, financial implications, and risk factors,

stakeholders gain essential insights into the potential opportunities and challenges that

lie ahead. Armed with this foundational understanding, decision-makers are

empowered to determine the project's merit and the necessity of proceeding to the next

phase.

Subsequently, the feasibility study delves deeper into the intricacies of the proposed

endeavor, leaving no stone unturned in its quest for comprehensive evaluation.

Building upon the groundwork laid by the pre-feasibility study, this stage employs

meticulous scrutiny to validate assumptions, refine cost projections, assess regulatory

compliance, and craft a robust operational blueprint. With a focus on detailed market

analysis, technical feasibility, financial viability, and legal considerations, the

feasibility study equips stakeholders with the knowledge required to make well-

informed decisions regarding project implementation.

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 PREFEASIBILITY AND FEASIBILITY STUDY IN TOURISM

In the realm of tourism development, pre-feasibility and feasibility studies serve as

essential tools to assess the viability and potential success of a proposed tourism

project or initiative. Here's an explanation of each:

Significance

Risk Mitigation: Tourism projects often involve significant investments of time and

resources. Conducting pre-feasibility and feasibility studies helps identify potential

risks and challenges early on, allowing stakeholders to develop mitigation strategies

and make informed decisions.

Investment Decisions: These studies provide stakeholders, including investors,

government agencies, and tourism developers, with valuable information to assess the

financial viability of a project. This helps in making informed investment decisions

and allocating resources efficiently.

Sustainability: Assessing the environmental and socio-economic impacts of tourism

projects is crucial for ensuring sustainability. Feasibility studies enable stakeholders to

evaluate the project's potential impacts and develop strategies to minimize negative

effects while maximizing benefits for local communities and ecosystems.

Stakeholder Engagement: Pre-feasibility and feasibility studies involve consultation

with various stakeholders, including local communities, government authorities,

tourism industry professionals, and environmental experts. This engagement fosters

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collaboration, transparency, and support for the project, enhancing its chances of

success.

Process

Initial Assessment: The process begins with a preliminary assessment of the proposed

tourism project's potential. This involves gathering basic information, defining project

objectives, and identifying key stakeholders.

Market Analysis: Conducting market research to understand the target market,

demand trends, competition, and consumer preferences. This helps in estimating

potential visitation rates, occupancy levels, and revenue streams.

Technical Analysis: Evaluating the technical aspects of the project, including site

suitability, infrastructure requirements, environmental considerations, and regulatory

compliance. Site visits, environmental impact assessments, and consultations with

technical experts may be conducted during this phase.

Financial Analysis: Developing detailed financial projections, including investment

costs, operating expenses, revenue forecasts, and cash flow projections. Financial

metrics such as net present value (NPV), internal rate of return (IRR), and payback

period are calculated to assess the project's financial viability.

Risk Assessment: Identifying potential risks and uncertainties that may affect the

project's success, such as market volatility, regulatory changes, natural disasters, or

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political instability. Risk mitigation strategies are developed to minimize these risks

and enhance the project's resilience.

Feasibility Report: Consolidating the findings of the pre-feasibility and feasibility

studies into a comprehensive report. This report presents the project's strengths,

weaknesses, opportunities, and threats (SWOT analysis), along with recommendations

for decision-making.

Decision-making: Based on the findings of the feasibility study, stakeholders evaluate

the project's feasibility and decide whether to proceed with implementation, modify

the project plan, or abandon the project altogether.

Continuous Evaluation

It's important to note that pre-feasibility and feasibility studies are not one-time

exercises but iterative processes that require continuous evaluation and adjustment. As

the project progresses from planning to implementation and operation, ongoing

monitoring and evaluation are essential to track progress, identify emerging issues,

and adapt strategies accordingly.

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 DEFINITION OF FEASIBILITY STUDY

A Feasibility Study is a crucial assessment that is during Project Management

conducted to determine the viability and potential success of a project. By thoroughly

examining such factors, stakeholders can make informed decisions regarding the

project’s feasibility.

A Feasibility Study is an initial investigation into the potential benefits and viability of

a project or endeavour. An impartial appraisal that looks at a project's technical,

financial, legal, and environmental elements is what this study provides.

Decision-makers can use this information to assess if the project should move forward

or not. The outcomes of this study can also be utilised to develop a project plan and

reasonable budgets. As a whole, it simplifies to determine the viability of a proposed

project.

Importance of a Feasibility Study

A Feasibility Study may reveal novel concepts that fundamentally alter the Scope of a

Project. Feasibility Studies are of the greatest importance in the decision-making

process when it comes to projects, businesses, and investments. They are mostly

structured assessments that are focused on various aspects of a proposed project`s

Feasibility. The following are some of its advantages:

a) Increases the focus of project teams

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b) Finds fresh opportunities

c) Gives important information to help make a "go/no-go" choice.

d) Reduces the number of available business options

e) Finds a good cause to start the project

f) Increases the success rate through the assessment of several factors

g) Assists in making project decisions

h) Identifies grounds for not moving forward

Types of Feasibility Studies

There are several types of Feasibility Studies, each aimed at a particular objective, and

together, they provide a complete assessment of the project's worthiness. Let's delve

into five distinct types of Feasibility Studies:

Technical Feasibility Study

A technical Feasibility Study aims to verify whether the organisation is eligible to use

its technical in-house resources and expertise to perform successfully. This assessment

involves scrutinising various aspects, including the following:

a) Production capacity: Does the company have the resource base to produce that

number of products and services for the customers?

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b) Facility needs: Will today’s facilities fulfil the standards required, or will new

facilities be constructed?

c) Raw materials and supply chain: Are there enough purchases, and have the

organisation maintained a supply chain?

d) Regulatory compliance: Does the Project Execution follow the relevant

guidelines and professionals bear the relevant certifications to meet the requirements

and the industry standards?

Economic Feasibility Study

It is a financial Feasibility Study that primarily examines the project's financial

viability. The economic Feasibility Study typically involves several steps:

a) Determining capital requirements: Calculate funding collection, overhead, and

other capital.

b) Cost breakdown: Determining and listing all the project costs including the

purchase of materials, hardware, labour, and overheard costs are too.

c) Funding sources: Trying out a variety of possible solutions like banks, stakes, or

grants.

d) Revenue projection: By using prediction tools such as a cost-benefit analysis or

business forecasting to get the level of income, return on investment and profit

margin.

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e) financial analysis: Projecting the performance of the Project based on means that

are related to a financial analysis and are characterised by the utilisation of such things

as cash flow statements, balance sheets and financial projections.

Legal Feasibility Study

Legal Feasibility is a type of analysis that seeks to confirm that a project follows all

the relevant laws and regulations. Key considerations include:

a) Regulatory compliance: Briefing the whole project team about all required laws

and regulations that the project has to comply with.

b) Business structure: Assessing the legal systems (e.g., LLCs vs. corporations) that

would best protect liability, governance, and minimising taxation, if any.

Operational Feasibility Study

An operational Feasibility Study looks at how effectively a product will meet its

needs. It also talks about how easy it will be to use and maintain once it is in place. In

addition, this study enumerates the necessity of evaluating a product's utility and the

response and suggestions of application development team.

Scheduling Feasibility Study

Proposed project schedules and deadlines are the main subject of a scheduling a

Feasibility Study. This evaluation concerns how long team members will need to

complete the project. It also highly impacts the business because if the programme

isn't finished on time, the planned result might not be realised.

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What is included in a Feasibility Study report?

You should make a Feasibility Study report before starting a project. This way you

can analyse if your business idea is really viable and will bring you success. When

you conduct this study, you would have to consider lots of factors such as if the

people are going to buy your product or service, how much competition is out there, if

the company can afford it and so on.

The Feasibility Study must include things like how much technology and resources

you need and how much you can hope to earn from your investment. The results of

this study are put together in a report, which usually includes the following sections:

a) Executive summary

b) Approach to marketing

c) Organisation/staffing

Seven steps to do a Feasibility Study

As Feasibility Study is a crucial step in determining a potential of a project, it involves

a substantial period of time and resources. Let’s take you through some of the steps

involved in the following points:

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1) Do a preliminary analysis and define the scope of the study

Before going through a Feasibility Study, it is wise that you do just one small check.

The time and resources involved in Feasibility Studies may be burdensome; hence, it

is imperative to determine if it is worth it as early as possible.

Through this form, one can establish whether the study holds awarding potential and

who else should be involved on a higher level. You further this stage by answering

questions like what you might win, what pitfalls you will face, and what you need for

the success of the project.

2) Prepare a projected income statement

First, while doing a Feasibility Study, you should obtain the income statement

projection. In this, the statement calculates earnings and expenditures in subsequent

one-year amounts. It is made up of the sum of what you will surely get and the cost

you will need to cover.

Smaller businesses tend to need marketing strategies to grow into bigger companies.

These facts are extremely important because they help business owners make smart

decisions regarding the stage of the business.

3) Carry out market research

Market research is of paramount importance or, naturally, it will be of no use when

developing the Feasibility Study. Primarily, it operates to ascertain the viability of the

project. This point tells you time, which gives you knowledge of the current market

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state: Who your customers are, who your competitors are, how big the market is, and

how many of it you could have. One way of doing this market research is by asking

people questions, referring to experts, and checking very broad social media and other

public info to find out what's going on.

4) Organisation and operations plan

Once you've figured out how the market behaves and the scope of your organisation,

you can draft the setup of your plan. The detailed work plan for the project will

provide the answer to how it will work in a practical form. It tests three aspects of

your project, like whether it can be run, whether it is cost-effective, whether it

complies with the law, and whether the technology fits.

This is to help you comprehend everything you can do and what you may require to

get this project going, for example, the equipment, the materials to start the project,

additional costs, and if you need to hire or train people. If you need to, you may make

that change if the information you have brought is enough.

5) Calculate and prepare the initial balance of expected revenue and expenses

In this step, you must be expert in handling things from the financial part. You’ll

make estimates on how much you may initially spend starting up your project, and

then how much your project could make and spend based on that estimate. Among the

many issues involved are such as the amount of money you are receiving from your

customers, money you owe to others and assets that you own.

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Fixed costs, such as variable costs that will change based on the number of goods you

produce, and equipment costs also need to be factored in money you may borrow or

pay for land and service other companies. Keeping this in mind, you should also

consider your business’ off seasons and how much risk you are willing to take. These

calculations save a lot of time and effort and can be used to answer the most difficult

questions of Feasibility.

6) Review and analyse all data

After going through all the steps, it's crucial to do a thorough review and analysis.

This helps ensure that everything is in order and there's nothing that needs adjusting.

Take a moment to carefully look back at your work, including the income statement,

and compare it with your expenses and debts. Ask yourself: Does everything still

seem realistic?

This is also the perfect opportunity to consider any risks that might come up and
create contingency plans to handle them. By doing this, you'll be better prepared for
any unexpected challenges that may arise.

7) Make a go/No-go decision

Now, it's time to decide if the project can work. This might seem simple, but all the
work you've done so far leads up to this moment of decision-making. Before making
the final call, there are a few more things to think about. First, consider if the project is
worth the time, effort, and money you'll be putting into it. Is the commitment worth it?

Secondly, think about whether the project fits with what your organisation wants to
achieve in the long run. Does it align with the organisation’s strategic goals and plans?
These factors are essential to consider before making your decision.

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 PROCESS OF CARRYING OUT PRE-FEASIBILITY STUDY

Carrying out a pre-feasibility study involves several steps to assess the viability and

potential of a project before committing significant resources to a full-scale feasibility

study. Here's a general outline of the process:

 Define the Project Scope: Clearly define the objectives, goals, and parameters

of the project. This includes identifying the purpose of the study, target market,

potential location, and basic project requirements.

 Gather Preliminary Information: Collect relevant data and information

about the project, such as market trends, regulatory requirements, potential

risks, and available resources. This may involve market research, interviews

with stakeholders, and analysis of existing data.

 Preliminary Financial Analysis: Conduct an initial financial analysis to

determine the estimated costs, potential revenues, and profitability of the

project. This may include estimating capital expenditures, operating expenses,

revenue projections, and cash flow forecasts.

 Risk Assessment: Identify potential risks and uncertainties associated with the

project, such as market volatility, regulatory changes, technical challenges, or

environmental factors. Evaluate the likelihood and potential impact of these

risks on the project's success.

 Technical Assessment: Evaluate the technical feasibility of the project,

including the availability of necessary resources, technological requirements,

and any technical constraints or challenges that may arise.

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 Environmental and Social Impact Assessment: Assess the potential

environmental and social impacts of the project, including its effects on local

communities, ecosystems, and natural resources. Identify any mitigation

measures that may be necessary to minimize negative impacts.

 Stakeholder Analysis: Identify and analyze key stakeholders who may be

affected by or have an interest in the project. Understand their concerns,

expectations, and potential contributions to the project's success.

 Documentation and Reporting: Compile the findings of the pre-feasibility

study into a comprehensive report. This report should summarize the key

findings, conclusions, and recommendations for further action. Present the

report to relevant stakeholders for review and feedback.

 Decision Making: Based on the results of the pre-feasibility study, make an

informed decision on whether to proceed with the project, modify the project

scope, or abandon the project altogether. Consider factors such as the project's

economic viability, technical feasibility, environmental and social implications,

and risk profile.

 Plan for Further Studies: If the decision is made to proceed with the project,

develop a plan for conducting a full-scale feasibility study. This may involve

refining project plans, conducting more detailed assessments, and securing

additional resources as needed.

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 PROCESS OF CARRYING OUT FEASIBILITY STUDY

Carrying out a feasibility study involves a systematic process to evaluate the

practicality and viability of a proposed project or business venture. Here's a

generalized process for conducting a feasibility study:

 Define the Objectives: Clearly outline the goals and objectives of the

feasibility study. Determine what you want to achieve and what questions you

need to answer.

 Gather Information: Collect all relevant data and information related to the

project. This may include market research, financial data, technical

specifications, regulatory requirements, and any other factors that could impact

the project's feasibility.

 Market Analysis: Evaluate the market to assess the demand for the product or

service you plan to offer. Analyze market trends, competition, target customers,

and potential growth opportunities.

 Technical Analysis: Assess the technical feasibility of the project. Determine

whether the technology required for the project is available, reliable, and cost-

effective. Evaluate any technical challenges or risks that may arise.Financial

Analysis: Conduct a thorough financial analysis to determine the project's

 financial feasibility. This involves estimating the project costs, revenue

projections, and potential return on investment (ROI). Calculate key financial

metrics such as net present value (NPV), internal rate of return (IRR), and

payback period.

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 Risk Assessment: Identify and assess potential risks and uncertainties

associated with the project. This may include market risks, technical risks,

financial risks, regulatory risks, and other factors that could impact the project's

success.

 Legal and Regulatory Analysis: Evaluate the legal and regulatory

requirements that may affect the project. Ensure compliance with laws,

regulations, permits, licenses, and other legal considerations.

 Environmental Impact Assessment: Assess the environmental impact of the

project and identify any environmental risks or concerns. Ensure compliance

with environmental regulations and sustainability standards.

 Resource Analysis: Evaluate the availability of resources such as labor,

materials, equipment, and facilities needed to execute the project. Determine

whether sufficient resources can be obtained at a reasonable cost.

 Conclusion and Recommendations: Summarize the findings of the feasibility

study and make recommendations regarding the viability of the project.

Determine whether the project should proceed, be modified, or abandoned

based on the analysis conducted.

 Document the Study: Prepare a comprehensive report documenting the

findings, analysis, conclusions, and recommendations of the feasibility study.

Present the report to stakeholders for review and decision-making.

 Decision Making: Based on the feasibility study report, stakeholders can make

an informed decision on whether to proceed with the project, seek additional

information, modify the project plan, or abandon the project altogether.

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Murphy, P. E. (1985). Tourism: A community approach. Routledge.

Mathieson, A., & Wall, G. (1982). Tourism: Economic, physical and social impacts.
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