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INVESTMENT PROSPECT FOR

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Title: INVESTMENT PROSPECT FOR


1
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR, CROATIA Made by MarCon for the Town of
Daruvar, July 2010
2
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR CONTENT
1
REASONS TO INVEST IN DARUVAR
FACTS AND FIGURES
2
TOURISM AND HOTEL INDUSTRY
3
HOTEL - CASTLE JANKOVIC
4
HOTEL - AQUAE BALISSAE
5
HOTEL - ROMAN FOREST
6
CONTACTS AND LINKS
7
3
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 1. REASONS TO INVEST IN DARUVAR Croatia,
Location, Multiculturalism, Tradition, Framework
  • CROATIA Daruvar is located in Croatia, the
    fastest developing tourist destination in Europe
    in the last decade, with strong growth plans for
    the future.
  • LOCATION Daruvar is located in the center of
    continental Croatia, in proximity to five major
    capitals (Zagreb, Ljubljana, Belgrade, Sarajevo,
    Budapest) and many other urban areas, all of them
    located within the radius of 350 km.
  • MULTICULTURALISM Daruvar has the most diverse
    population in Croatia, with Croats, Czechs,
    Serbs, Hungarians, Albanians, Italians, Germans,
    Slovenians, and many other ethnical groups living
    and working together since development of the
    town more than 200 years ago. This cultural
    diversity has created high levels of tolerance
    towards difference and positive attitudes towards
    change.
  • TRADITION Daruvar is renowned in Croatia for
    having long business tradition production of
    wines since the Roman times, the first thermal
    bath in 1772, the oldest brewery in Croatia
    (since 1840), and the oldest fishing pod in
    Croatia
  • FRAMEWORK Daruvar has a stimulating legal
    framework for tourism and hotel investments the
    county plans for economic and tourism
    development, recently established tourist board
    of the destination area Daruvar - Papuk (town and
    four neighboring municipalities), the general
    urban (zoning) plan of the town, and lower
    municipal taxes and fees than elsewhere. Daruvar
    will soon have its own economic development plan
    and tourism development and marketing plan.

4
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 1. REASONS TO INVEST IN DARUVAR Awards,
Tourism, Hotels, and Terms
  • AWARDS Daruvar has received seven yearly awards
    from the Croatian Tourist Board for being the
    most beautiful small town in continental Croatia.
    The wine producers from Daruvar have also
    received a number of medals at both national and
    international wine exhibitions.
  • TOURISM Daruvar has the most diverse tourism
    resources in continental Croatia with thermal
    springs for health treatments and bathing,
    events, wineries, brewery, hunting grounds,
    fishing areas, nature paths for walking, cycling,
    and hiking, agro tourism, meeting possibilities,
    and many more. It provides opportunities for the
    growth of tourist traffic from currently 20
    thousand overnight stays to anywhere from 250 to
    300 thousand overnight stays by 2020.
  • HOTELS Daruvar provides opportunities for new
    hotels that would increase the total
    accommodation capacity from currently 200 rooms
    (400 beds) to anywhere from 600 to 750 rooms
    (from 1,200 to 1,500 beds). The prospective
    development includes three hotel projects with
    approximately 450 rooms (900 beds) to be
    constructed on the sites that are fully owned by
    the government of Daruvar.
  • TERMS The government of Daruvar is ready to
    develop subject hotels in partnership with
    renowned developers based on the 99-year
    concession / lease and competitive terms. The
    developer is required to engage the partner for
    management of the subject hotel and with relevant
    managerial experience, either through management
    contract or lease (i.e. sub-lease).

5
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 2. FACTS AND FIGURES Croatia
  • LOCATION meeting point of Central Europe,
    Mediterranean (Adriatic), and Balkans
  • SURFACE AREA 56,542 square kilometers
  • TERRITORIAL ORGANIZATION City of Zagreb
    (Capital) and 20 counties (provinces)
  • POPULATION 4,437,460 inhabitants, of which 47.8
    in Zagreb and Central Croatia
  • DENSITY 78.5 inhabitants per square kilometer
  • MAJOR CITIES Zagreb, Split, Rijeka, Osijek
  • MAJOR AIRPORTS Zagreb, Split, and Dubrovnik,
    with direct scheduled flights to most major
    cities in Europe
  • ROAD CONNECTIONS extensive national highway
    system connected with those of Slovenia, Austria,
    Hungary, and Serbia
  • MAJOR ATTRACTIONS long coastline with historic
    towns and numerous islands, eight national parks,
    eleven nature parks, and six cultural sites under
    protection by UNESCO

6
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 2. FACTS AND FIGURES Daruvar
  • LOCATION center of continental (Pannonian)
    Croatia, in the County of Bjelovar-Bilogora
  • SURFACE AREA 581 square kilometers (Town of
    Daruvar and four neighboring municipalities)
  • POPULATION 25,608 inhabitants, of which 51.7 in
    the Town of Daruvar and 48.3 in four neighboring
    municipalities, with high cultural diversity
    (Croats, Czechs, Serbs, Hungarians, Albanians,
    Italians, Germans, Slovenians, etc.)
  • DENSITY 44.1 inhabitants per square kilometer
  • MAJOR AIRPORT Zagreb (19 airlines servicing
    direct flights to / from 42 airports in Europe
    and world in summer 2010 timetable)
  • ROAD DISTANCES Zagreb (Croatia) - 135 km,
    Ljubljana (Slovenia) - 270 km, Belgrade (Serbia)
    - 324 km, Sarajevo (Bosnia Herz.) - 337 km,
    Budapest (Hungary) - 339 km
  • ATTRACTIONS thermal springs, Julijev Park - town
    park with Austro-Hungarian buildings, Castle
    Jankovic, Nature Park Papuk (in vicinity)

7
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Tourism
Trends in Croatia
  • The main comparative advantages of Croatia are
    its geographical position (proximity to major
    demand generating markets) and well preserved
    coast with crystal clean sea water, picturesque
    towns, and numerous islands
  • The main tourist products are sun and sea
    holidays, touring, and nautical vacations, while
    the fastest developing products are incentive
    travel, short breaks, and spa holidays
  • Most overnight stays are generated by tourists
    from Germany, Croatia, Slovenia, Italy, Austria,
    Czech Republic, Poland, Holland, and Hungary
  • Most tourism business takes place in the coastal
    destinations of Istria, Kvarner, and Dalmatia,
    while only 2.5 mil. overnight stays are generated
    in the continental Croatia, of which 1.2 mil. in
    Zagreb and 1.3 mil. in other areas
  • The tourism in continental Croatia has been
    experiencing strong development with health, spa,
    meetings, events, and activities in nature as the
    main tourist products

57
56
53
51
48
47
45
11
11
10
10
9
9
8
2003
2004
2005
2006
2007
2008
2002
Tourist arrivals (in million) gt CAGR of 5,2
Tourist overnight stays (in million) gt CAGR of
4,2
Source Central Bureau of Statistics of Croatia
8
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Tourism
Trends in Daruvar
  • The main comparative advantages of Daruvar are
    its proximity to major capital cities in the area
    and the most diverse tourism resources base in
    continental Croatia with high-capacity thermal
    springs, events, wineries, brewery, hunting
    grounds, fishing areas, and nature paths for
    walking, cycling, and hiking
  • The main tourist products are health treatments
    in the medical complex Daruvarske toplice, while
    the fastest developing products are bathing at
    thermal water park Aquae Balissae, various
    events, and wine related products
  • Most overnight stays are generated by domestic
    tourists and the tourism business is evenly
    distributed throughout the year
  • Daruvar has received seven yearly awards from the
    Croatian Tourist Board for being the most
    beautiful small town in continental Croatia
  • Based on the county tourism master plan, the
    Tourist Board of Daruvar - Papuk will soon create
    its own tourism master plan for the area

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19
16
16
14
13
8
8
7
6
6
5
5
2003
2004
2005
2006
2007
2008
2002
Tourist arrivals (in thousand) gt CAGR of 7,7
Tourist overnight stays (in thousand) gt CAGR of
9,2
Source Central Bureau of Statistics of Croatia
9
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Tourism
Products in Daruvar (I)
The Multicultural Oasis of Health and Hedonism in
the Heart of Pannonian Croatia
HEALTH
  • Tradition in health tourism since opening of the
    first bath in 1772
  • Medical complex Daruvarske toplice with Hotel
    Termal is the major provider of physical medicine
    and rehabilitation treatments

BATHS
  • Thermal water park Aquae Balissae - brand new
    complex of indoor and outdoor swimming pools with
    the total pool area of 1,728 sqm, spa,
    restaurant, bars, and other facilities

EVENTS
  • Several events throughout the year including
    international events such as Vinodar (exhibition
    of wines), Flig (festival of brass bands), and
    Dožinky (festival of Czech culture)

WINES
  • One of the oldest wine regions in continental
    Croatia, famous for white wines grasevina,
    riesling, sauvignon, chardonnay, pinot, etc.
  • Wine trail and wineries Daruvar (by Badel) and
    Lotada

BEER
  • Daruvarska pivovara - the oldest brewery in
    Croatia (since 1840), famous for production of
    pilsner Old Czech Beer (Staroceško pivo)

10
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Tourism
Products in Daruvar (II)
The Multicultural Oasis of Health and Hedonism in
the Heart of Pannonian Croatia
HUNTING
  • Eleven hunting clubs and nine hunting grounds
    that abound with animals such as deer, fallow
    deer, wild boar, rabbit, and pheasant

FISHING
  • Numerous fish ponds, rivers, and streams that
    abound with a variety of fish species such as
    carp, catfish, pike fish, and trout
  • Sports and recreation lake in Daruvar and fish
    pond Koncanica

ACTIVITIES IN NATURE
  • Numerous possibilities for walking, cycling,
    horse riding, hiking, team building, and other
    activities (in winter even for skiing)
  • Nature Park Papuk and several excursion sites
    such as Petrov vrh

RURAL TOURISM
  • Tradition in agriculture and production of
    fruits, honey, and liquors
  • Several agro tourism households (e.g. Kovacevic
    and Konjovoda)

MICE
  • Possibilities for meetings, seminars, small
    conferences, and other events at Hotel Termal and
    in future hotels due to central location of
    Daruvar in continental Croatia

11
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Hotel
Supply in Croatia
  • Hotels make up only 16.2 of units and 11.6 of
    beds of total accommodation capacities in Croatia
    (private households and campsites have more units
    and beds than hotels)
  • Most hotels are owned and managed by Croatian
    firms such as Maistra and Valamar
  • The most renowned international brands are
    Hilton, Kempinski, Le Meridien, Radisson Blu,
    Regent, Sheraton, and Westin, most of them
    located in Zagreb, Split, and Dubrovnik
  • Most hotels are located in the coastal
    destinations of Istria, Kvarner, and Dalmatia,
    while continental Croatia has 106 hotels and
    similar establishments with 4,259 rooms and 8,025
    beds (without Zagreb, as of May 2010)
  • Most hotels in continental Croatia (without
    Zagreb) are of lower quality than on the coast
    (66.9 of rooms with 3 or 2), with no 5 hotels
    and only 16.6 of rooms in the 4 category
  • There are 13 thermal hotels with 1.484 rooms, of
    which six are not even categorized

Remarks
  • 571 hotels with 53,826 rooms and 104,159
    permanent beds
  • Figures do not include villas, aparthotels, and
    other similar

Source Central Bureau of Statistics of Croatia
12
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Hotel
Performance in Croatia
5 stars
4 stars
3 stars
Horwath Hotel Survey 2009 Performance in 2008
Average Yearly Room Occupancy Rate
50.5
43.9
44.1
Average Net Achieved Daily Room Rate (in euros)
121.11
73.53
51.83
Daily Room Revenue per Available Room (in euros)
61.16
32.28
22.86
Total Revenue per Available Room (in euros)
32,746
19,553
14,941
Room Revenues ( of revenue)
62.9
64.4
58.7
Food and Beverage Revenues ( of revenue)
31.5
30.5
35.2
Other Revenues ( of revenue)
5.5
5.1
6.1
EBITDA ( of revenue)
18.1
21.2
16.4
Number of Employees per Room
0.67
0.37
0.28
Payroll and Related Costs ( of revenue)
35.2
29.4
29.3
13
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Hotel
Supply in Daruvar
Only Five Hotels and Similar Establishments with
203 Rooms and 383 Beds
TERMAL
  • 157 rooms (283 beds), mostly used by guests using
    benefits of Croatian Institute for Health
    Insurance (non-registered tourism)
  • 2 restaurants, 2 bars, meeting room, spa, gym,
    sports hall, 3 pools

ARCADIA
  • Old style villa with 10 rooms (16 beds), used as
    additional accommodation for guests of Daruvarske
    toplice and Hotel Termal
  • Terasa - fine dining restaurant with an outdoor
    terrace

MLADIMIR
  • Hotel 3 with 10 rooms (20 beds), temporarily
    closed
  • Restaurant, bar, treatment room for massages,
    sauna, hydromassage, souvenir shop

BALISE
  • Hotel with 19 rooms (39 beds)
  • Restaurant, bar, TV salon

SLAVONIJA
  • Newly renovated pension with 7 suites and
    apartments (25 beds)
  • Slavonija - fine dining restaurant

14
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 3. TOURISM AND HOTEL INDUSTRY Selected
Competitors in Croatia and Slovenia
Only Two Strong Competitors in Croatia and
Several Strong Competitors in Slovenia
SPA GOLFER Croatia
  • New hotel 4 located within the complex Terme
    Sveti Martin
  • 157 rooms, restaurants, bars, meeting space, spa,
    pool
  • Thermal complex with total pool area of 3,650 sqm

TERME Croatia
  • Hotel 3 located within the complex Terme Tuhelj
  • 138 rooms, restaurants, bars, meeting space in
    Castle Mihanovic
  • Thermal complex with total pool area of 5,000 sqm

SOTELIA Slovenia
  • New hotel 4 located with the complex Terme
    Olimia
  • 145 rooms, restaurants, bars, meeting space, spa,
    health center
  • Spa complex and thermal complex with total pool
    area of 3,000 sqm

TERME Slovenia
  • Hotel 4 located within the complex Terme Catež
  • 149 rooms, restaurants, bars, meeting space,
    beauty center, 2 pools
  • Thermal complex with total pool area of 12,200 sqm

GOLF GRAD MOKRICE Slovenia
  • Castle hotel 4 located between Terme Catež and
    Croatian border
  • 48 rooms (29 in castle, 11 in new annex, 8 in
    golf club house), restaurant, bar, golf course

15
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC
16
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Site Location
  1. Kralj Tomislav Square (the main town square)
  2. Julijev Park
  3. Hotel Termal Thermal Medical Complex Daruvarske
    toplice
  4. Thermal Water Park Aquae Balissae
  5. Hotel - Castle Jankovic
  6. Hotel - Aquae Balissae
  7. Hotel - Roman Forest
  8. Roman Forest Park
  9. Hippodrome
  10. Sports Airport

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INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Site
Description
  • LOCATION Ivana Gundulica Street No. 15,
    approximately 250 meters northwest from the main
    town square, in the vicinity of major points of
    interest
  • SURROUNDINGS Ivana Gundulica Street and houses
    (north), Antun Jankovic Park (east and south),
    Vladimira Nazora Street and houses (west)
  • ACCESS By road from Ivana Gundulica Street
  • VIEWS Attractive views to the green areas of
    Antun Jankovic Park, featuring two old ginkgo
    biloba trees (claimed to be the second oldest in
    Europe)
  • VISIBILITY High from all directions, especially
    from south
  • AREA 6,020 sqm - two adjacent plots with areas
    of 3,679 sqm and 2,341 sqm
  • FACILITIES Main building constructed in form of
    letter U with external dimensions of 57.6 m x
    38.0 m, three levels (basement, ground floor,
    attic with high ceilings), and three small
    adjacent houses to the north
  • INFRASTRUCTURE Electricity, water supply, sewage
    system, and phone cables on site, good coverage
    by mobile phone networks
  • HISTORY Constructed from 1771 to 1777 in the
    baroque style as the residential complex for the
    count Antun Jankovic, who received the title from
    the queen Maria Theresa as the Count of Daruvar
  • USE Residential until early 20th century and
    educational from 1920 until 2004, currently used
    for events in the main hall and storing wines in
    the basement

18
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Ownership,
Zoning, and Development
  • OWNERSHIP 100 owned by the Town of Daruvar (the
    firm Badel 1862 - Winery Daruvar has the
    concession for use of the entire basement of the
    main building for storing wines, for the period
    of 50 years from 01.11.2001. to 01.11.2051.)
  • ZONING General Urban Plan (GUP) of the Town of
    Daruvar qualifies the site as a tourist zone for
    hotel development (zone T1 - hotel)
  • PROTECTION Castle Jankovic has been protected as
    the cultural monument since 1969. According to
    the General Guidelines of the Committee of
    Curators from 2007, renovation and conversion of
    the building is possible by respecting its
    typology, architectural style, and immediate
    surroundings.
  • DEVELOPMENT It is allowed to convert the main
    building and adjacent houses into a high-quality
    hotel complex, as well as to build new small
    additions to the north of the main building and
    underground spaces to the west of the main
    building. The Committee of Curators will need to
    define more specific guidelines for subject hotel
    development.

19
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Development
Concept Guidelines and Business Potential
MARKET CONCEPT
  • Castle hotel with international 5 (upper
    upscale) / high Croatian 4
  • The best castle hotel in Croatia and one of the
    leading in Central Europe
  • Charming hotel with fine dining, wide choice of
    wines, and wine spa

FACILITIES PROGRAM
  • Approximately 40 rooms (of which 10 suites) with
    80 beds
  • Fine dining restaurant with the best cuisine in
    continental Croatia
  • Lobby bar with an outdoor terrace
  • Main hall for events and one small meeting room
  • Small spa with specialized treatments based on
    grapes and wines
  • Winery (in the basement), wine shop, and souvenir
    shop

INVESTMENTS
  • From 4.0 to 5.0 mil. euros (from 100 to 125 thou.
    euros per room), including reconstruction,
    furniture, fixtures, and equipment (FFE),
    development costs, pre-opening costs, working
    capital, and contingency

BUSINESS POTENTIAL
  • At least 20 employees (0.5 employees per room)
  • Average yearly room occupancy rate from 55 to
    65
  • Average net achieved daily room rate from 100 to
    120 euros
  • Total revenue from 1.6 to 1.8 mil. euros (40 to
    45 thou. euros per room)
  • EBITDA of 25 of total revenue (from 0.4 to 0.5
    mil. euros)
  • Tourist traffic of 15 thou. overnight stays

Remarks Business potential refers to the year of
stabilized operations. All the values are
estimated.
20
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Business Model
Terms (I)
MODEL
  • Long-term concession / lease with management
    contract (sub-lease)

PARTNERS
  • The concession will be given to the developer
    (concessionaire) with development experience in
    the sector of high-quality boutique hotels.
  • The concessionaire is required to have the
    partner for future management of the subject
    hotel and with managerial experience in the
    sector of high-quality boutique hotels. The
    concessionaire should engage his management
    partner either through management contract or
    lease (actually sub-lease).

TERM
  • The length of term is 99 years with option of
    renewal for additional 99 years. The term
    includes the periods of both development (from
    the date of signature to the date of opening) and
    operations (after the date of opening).

DEVELOPMENT
  • The concessionaire is required to develop the
    hotel within two years (24 months) from the date
    of signature.
  • The concessionaire is required to register the
    firm in the town of Daruvar, which will be
    responsible for subject hotel development.

MANAGEMENT
  • The management partner is required to manage the
    hotel for the period of at least 10 years (120
    months) from the date of opening.
  • The management partner is required to register
    the firm in the town of Daruvar, which will be
    responsible for subject hotel operations.

21
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 4. HOTEL - CASTLE JANKOVIC Business Model
Terms (II)
CONCESSION (RENT) FEES
  • The concession fee (net of value added tax) is
    composed of two portions
  • Fixed portion - initial amount of 96,990 euros,
    which equals to 2,425 euros per room for 40-room
    hotel (20.0 euros per sqm of land area for the
    3,679-sqm plot and 10.0 euros per sqm of land
    area for the 2,341-sqm plot)
  • Variable portion - yearly amount of 1.0 of total
    revenue (approximately from 16 to 18 thou. euros,
    i.e. from 400 to 450 euros per room for 40-room
    hotel)

PAYMENTS
  • Fixed portion payable as a lump sum within 90
    days after signing the contract
  • Variable portion payable after hotel opening, in
    four quarterly installments per year and in every
    year of hotel operations

GUARANTEES
  • Concessionaires bank guarantee for promptly
    payments of concession fees

REPAIRS MAINTENANCE
  • Concessionaires responsibility for both
    structural repairs and maintenance (required
    supervision by the Town of Daruvar in the case of
    structural repairs)

ASSIGNABILITY
  • Possible assignability and trade of the
    concession contract, but only with prior approval
    from the Town of Daruvar in selection of the new
    concessionaire

TERMINATION
  • Possible but with the penalty fee equal to 50 of
    remaining concession fees

22
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE
23
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Site Location
  1. Kralj Tomislav Square (the main town square)
  2. Julijev Park
  3. Hotel Termal Thermal Medical Complex Daruvarske
    toplice
  4. Thermal Water Park Aquae Balissae
  5. Hotel - Castle Jankovic
  6. Hotel - Aquae Balissae
  7. Hotel - Roman Forest
  8. Roman Forest Park
  9. Hippodrome
  10. Sports Airport

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INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Site Description
  • LOCATION Podkucnice Street No. 8, adjacent to
    the thermal water park Aquae Balissae,
    approximately 350 meters north from the main town
    square, in the vicinity of major points of
    interest
  • SURROUNDINGS Green areas, lake, and recreation
    center (north), municipal promenade, Toplica
    River, and medical complex Daruvarske toplice
    (east), thermal water park Aquae Balissae
    (south), houses (west)
  • ACCESS By road from Matije Gupca Street
  • VIEWS Attractive views to the green areas, lake,
    and river to the north and east, as well as to
    the thermal water park Aquae Balissae to the
    south
  • VISIBILITY High from all directions, especially
    from north, east, and south
  • AREA 9,814 sqm - five adjacent plots with areas
    of 954 sqm, 3,592 sqm, 2,098 sqm, 2,208 sqm, and
    962 sqm
  • FACILITIES Parking area with 96 parking spaces,
    parking road, and sidewalks (total area of 2,641
    sqm, leaving the green area of 7,173 sqm for
    development)
  • INFRASTRUCTURE Electricity, water supply, sewage
    system, and phone cables on site, good coverage
    by mobile phone networks

25
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Ownership,
Zoning, and Development
  • OWNERSHIP 100 owned by the Town of Daruvar
  • ZONING General Urban Plan (GUP) of the Town of
    Daruvar qualifies the site as a tourist zone for
    hotel development (zone T1 - hotel) and requires
    the need to make the Detailed Urban Plan (DPU)
    with specific zoning issues for the site
  • LOT COVERAGE RATIO 0.50 gt the maximum footprint
    area for construction of indoor spaces is 4,907
    sqm (since the site is occupied by the parking
    area of 2,641 sqm and the lot coverage ratio
    allows construction of indoor spaces on the
    maximum area of 4,907 sqm, it follows that the
    area for construction of outdoor spaces and
    landscaping is at least 2,266 sqm)
  • USE COEFFICIENT 1.20 gt the maximum gross
    developed area (GDA) of indoor spaces above
    ground is 11,777 sqm
  • DEVELOPMENT It is recommended to connect the
    hotel with thermal water park Aquae Balissae,
    thus creating a more competitive hotel product.
    If interested, the developer should make
    agreement with the Town of Daruvar, which is
    owner and operator of the subject water park.

26
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Development
Concept Guidelines and Business Potential
MARKET CONCEPT
  • Family thermal hotel with international 3 / 4
    (midscale / upscale) / Croatian 4
  • The best thermal hotel in Croatia for families
    with children
  • Connection with thermal water park Aquae Balissae

FACILITIES PROGRAM
  • At least 150 rooms (of which 30 family rooms)
    with 300 beds
  • Three-meal restaurant, lobby bar with an outdoor
    terrace, and children bar
  • One multi-purpose hall with an area of
    approximately 100 sqm
  • Possible pool in the area near thermal water park
    Aquae Balissae
  • Covered walkway connection with thermal water
    park Aquae Balissae
  • Children club and souvenir shop

INVESTMENTS
  • From 9.0 to 12.0 mil. euros (from 60 to 80 thou.
    euros per room), including construction,
    furniture, fixtures, and equipment (FFE),
    landscaping, development costs, pre-opening
    costs, working capital, and contingency

BUSINESS POTENTIAL
  • At least 60 employees (0.4 employees per room)
  • Average yearly room occupancy rate from 65 to
    75
  • Average net achieved daily room rate from 60 to
    80 euros
  • Total revenue from 4.0 to 4.5 mil. euros (25 to
    30 thou. euros per room)
  • EBITDA of 25 of total revenue (from 1.0 to 1.2
    mil. euros)
  • Tourist traffic from 70 to 80 thou. overnight
    stays

27
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Business Model
Terms (I)
MODEL
  • Long-term concession / lease with management
    contract (sub-lease)

PARTNERS
  • The concession will be given to the developer
    (concessionaire) with development experience in
    the sector of high-quality family thermal hotels.
  • The concessionaire is required to have the
    partner for future management of the subject
    hotel and with managerial experience in the
    sector of high-quality family thermal hotels. The
    concessionaire should engage his management
    partner either through management contract or
    lease (actually sub-lease).

TERM
  • The length of term is 99 years with option of
    renewal for additional 99 years. The term
    includes the periods of both development (from
    the date of signature to the date of opening) and
    operations (after the date of opening).

DEVELOPMENT
  • The concessionaire is required to develop the
    hotel within two years (24 months) from the date
    of signature.
  • The concessionaire is required to register the
    firm in the town of Daruvar, which will be
    responsible for subject hotel development.

MANAGEMENT
  • The management partner is required to manage the
    hotel for the period of at least 10 years (120
    months) from the date of opening.
  • The management partner is required to register
    the firm in the town of Daruvar, which will be
    responsible for subject hotel operations.

28
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 5. HOTEL - AQUAE BALISSAE Business Model
Terms (II)
CONCESSION (RENT) FEES
  • The concession fee (net of value added tax) is
    composed of two portions
  • Fixed portion - initial amount of 147,210 euros,
    which equals to 981 euros per room for 150-room
    hotel (15.0 euros per sqm of total land area of
    9,814 sqm)
  • Variable portion - yearly amount of 1.0 of total
    revenue (approximately from 40 to 45 thou. euros,
    i.e. from 267 to 300 euros per room for 150-room
    hotel)

PAYMENTS
  • Fixed portion payable as a lump sum within 90
    days after signing the contract
  • Variable portion payable after hotel opening, in
    four quarterly installments per year and in every
    year of hotel operations

GUARANTEES
  • Concessionaires bank guarantee for promptly
    payments of concession fees

REPAIRS MAINTENANCE
  • Concessionaires responsibility for both
    structural repairs and maintenance

ASSIGNABILITY
  • Possible assignability and trade of the
    concession contract, but only with prior approval
    from the Town of Daruvar in selection of the new
    concessionaire

TERMINATION
  • Possible but with the penalty fee equal to 50 of
    remaining concession fees

29
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST
30
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Site Location
  1. Kralj Tomislav Square (the main town square)
  2. Julijev Park
  3. Hotel Termal Thermal Medical Complex Daruvarske
    toplice
  4. Thermal Water Park Aquae Balissae
  5. Hotel - Castle Jankovic
  6. Hotel - Aquae Balissae
  7. Hotel - Roman Forest
  8. Roman Forest Park
  9. Hippodrome
  10. Sports Airport

6
7
3
4
8
5
2
1
10
9
31
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Site Description
  • LOCATION Stari Slavik Street No. 7, adjacent to
    the park forest Rimska šuma (Roman Forest),
    approximately 600 meters northeast from the main
    town square, in the vicinity of major points of
    interest
  • SURROUNDINGS Strma Street and houses (north),
    park forest Rimska šuma (east and south),
    Podborje Street, green areas, and football
    playground (west)
  • ACCESS By road from both Strma Street and
    Podborje Street
  • VIEWS Attractive views to the park forest Rimska
    šuma to the east and south, as well as to the
    green areas to the west
  • VISIBILITY High from north and west
  • AREA Entirely green field area of 27,751 sqm -
    two neighboring plots with areas of 17,949 sqm
    and 9,802 sqm, divided by a narrow water channel
    (which may be covered, thus allowing the
    possibility to connect two plots as one)
  • INFRASTRUCTURE Electricity, water supply, sewage
    system, and phone cables on site, good coverage
    by mobile phone networks, newly discovered
    thermal spring nearby (located south from the
    site)

32
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Ownership,
Zoning, and Development
  • OWNERSHIP 100 owned by the Town of Daruvar
  • ZONING General Urban Plan (GUP) of the Town of
    Daruvar qualifies the site as a tourist zone for
    hotel development (zone T1 - hotel) and requires
    the need to make the Detailed Urban Plan (DPU)
    with specific zoning issues for the site
  • LOT COVERAGE RATIO 0.50 gt the maximum footprint
    area for construction of indoor spaces is 13,876
    sqm
  • USE COEFFICIENT 1.20 gt the maximum gross
    developed area (GDA) of indoor spaces above
    ground is 33,301 sqm
  • DEVELOPMENT Since the two plots of the site are
    separated by a narrow water channel (surface area
    of 410 sqm), it will be important to make
    agreement with Hrvatske vode (Croatian Waters) -
    the state-owned institution which owns the
    subject channel and which has expressed interest
    to cover the channel and solve the draining in
    agreement with the developer

33
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Development
Concept Guidelines and Business Potential
MARKET CONCEPT
  • Congress, spa health hotel with international
    4 (upscale) / high Croatian 4
  • The best congress spa hotel in coninental
    Croatia
  • The most innovative 4 design hotel in Croatia,
    integrated with environment

FACILITIES PROGRAM
  • At least 250 rooms (of which 10 suites) with 500
    beds
  • Three-meal restaurant and fine dining restaurant
  • Lobby bar with an outdoor terrace, night lounge
    bar, spa bar, and pool bar
  • Congress center with the total rentable area of
    approximately 500 to 600 sqm
  • Big spa with a variety of treatments, two outdoor
    thermal pools, gym, tennis
  • Specialized health clinic, shops, and other
    facilities of interest to developer

INVESTMENTS
  • From 20.0 to 25.0 mil. euros (from 80 to 100
    thou. euros per room), including construction,
    furniture, fixtures, and equipment (FFE),
    landscaping, development costs, pre-opening
    costs, working capital, and contingency

BUSINESS POTENTIAL
  • At least 100 employees (0.4 employees per room)
  • Average yearly room occupancy rate from 60 to
    70
  • Average net achieved daily room rate from 80 to
    100 euros
  • Total revenue from 8.0 to 10.0 mil. euros (30 to
    40 thou. euros per room)
  • EBITDA of 25 of total revenue (from 2.0 to 2.5
    mil. euros)
  • Tourist traffic from 100 to 120 thou. overnight
    stays

34
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Business Model
Terms (I)
MODEL
  • Long-term concession / lease with management
    contract (sub-lease)

PARTNERS
  • The concession will be given to the developer
    (concessionaire) with development experience in
    the sector of high-quality congreess spa
    hotels.
  • The concessionaire is required to have the
    partner for future management of the subject
    hotel and with managerial experience in the
    sector of high-quality congress spa hotels. The
    concessionaire should engage his management
    partner either through management contract or
    lease (actually sub-lease).

TERM
  • The length of term is 99 years with option of
    renewal for additional 99 years. The term
    includes the periods of both development (from
    the date of signature to the date of opening) and
    operations (after the date of opening).

DEVELOPMENT
  • The concessionaire is required to develop the
    hotel within two years (24 months) from the date
    of signature.
  • The concessionaire is required to register the
    firm in the town of Daruvar, which will be
    responsible for subject hotel development.

MANAGEMENT
  • The management partner is required to manage the
    hotel for the period of at least 10 years (120
    months) from the date of opening.
  • The management partner is required to register
    the firm in the town of Daruvar, which will be
    responsible for subject hotel operations.

35
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 6. HOTEL - ROMAN FOREST Business Model
Terms (II)
CONCESSION (RENT) FEES
  • The concession fee (net of value added tax) is
    composed of two portions
  • Fixed portion - initial amount of 416,265 euros,
    which equals to 1,665 euros per room for 250-room
    hotel (15.0 euros per sqm of total land area of
    27,751 sqm)
  • Variable portion - yearly amount of 1.0 of total
    revenue (approximately from 80 to 100 thou.
    euros, i.e. from 320 to 400 euros per room for
    250-room hotel)

PAYMENTS
  • Fixed portion payable as a lump sum within 90
    days after signing the contract
  • Variable portion payable after hotel opening, in
    four quarterly installments per year and in every
    year of hotel operations

GUARANTEES
  • Concessionaires bank guarantee for promptly
    payments of concession fees

REPAIRS MAINTENANCE
  • Concessionaires responsibility for both
    structural repairs and maintenance

ASSIGNABILITY
  • Possible assignability and trade of the
    concession contract, but only with prior approval
    from the Town of Daruvar in selection of the new
    concessionaire

TERMINATION
  • Possible but with the penalty fee equal to 50 of
    remaining concession fees

36
INVESTMENT PROSPECT FOR HOTEL PROJECTS IN
DARUVAR 7. CONTACTS AND LINKS
CONTACTS
  • Mr. Ratko Vukovic, Head of Department for Economy
  • Trg Kralja Tomislava 14, 43500 Daruvar, Croatia
  • 385 (0)43 331 408 grad-gospodarstvo_at_daruvar.hr

TOWN OF DARUVAR
  • Mr. Mario Šeric, Senior Consultant Managing
    Director
  • Radunica 26, 21000 Split, Croatia
  • 385 (0)91 1976 901 mario_at_marcon.st

MARCON
  • Ministry of Economy of Croatia (www.mingorp.hr)
  • Ministry of Finance of Croatia (www.mfin.hr)
  • Croatian Chamber of Economy (www.hgk.hr)
  • Croatian National Bank (www.hnb.hr)
  • Trade and Investment Promotion Agency
    (www.apiu.hr)
  • Central Bureau of Statistics of Croatia
    (www.dzs.hr)

LINKS
ECONOMY AND LEGAL ENVIRONMENT
  • Ministry of Tourism of Croatia (www.mint.hr)
  • Croatian National Tourist Board (www.croatia.hr)
  • Central Bureau of Statistics of Croatia
    (www.dzs.hr)
  • Terme Sveti Martin (www.toplicesvetimartin.hr)
  • Terme Olimia (www.terme-olimia.com)
  • Terme Catež (www.terme-catez.si)

TOURISM AND HOTEL INDUSTRY
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