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Foreign Direct Investment Project Mövenpick Hotels & Resorts: Sri Lanka. Scott Brodbeck Justin Kahrl Meg MacWhirter Joseph Marchetti. STRT 571 – International Business Environment | May 3, 2010. Company Position. Organizational resources and capabilities Expansive property portfolio - PowerPoint PPT Presentation
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Scott BrodbeckJustin KahrlMeg MacWhirterJoseph Marchetti
STRT 571 – International Business Environment | May 3, 2010
Passionately Swiss
Company Position• Organizational resources and
capabilities– Expansive property portfolio– Brand recognition throughout
Europe, Asia, Middle East and Africa
– Strong cash position• Industry structure and
competition– Global recession– Market saturation
2009 European Upscale Hotel Guest Satisfaction Index
Mövenpick Hotels & ResortsAward Winner
Crowne Plaza Hotels
Hotel Novotel
Iberostar Hotels & Resorts
Mercure
AC Hotels
nH Hoteles
Meliá Hotels & Resorts
Hesperia
Source: © 2010 J.D. Power and Associates
Passionately Swiss
India
Sri Lanka
Expansion Analysis
• Business expansion objectives– Develop our existing core market – New opportunities in developing countries and
emerging markets
• Customer demand– Expand leisure/holiday
resort segment– Exotic locations
Passionately Swiss
Sri Lanka
• New market seeking– 26 year civil war ended in 2009– 32% hotel occupancy increase
• Strategic location– Exotic locale– Visitors from existing markets
• Country characteristics– Established infrastructure– Educated labor force
More VisitorsGrowth in tourist arrivals in Jan and Feb 2010 compared to Jan and Feb 2009 % Growth
Sri Lanka 50
Vietnam 36
Japan 29
Singapore 21
Hong Kong 14
Indonesia 14
India 13
Cambodia 10
China 8
USA 3
Source: UNWTO World Tourism Barometer
Passionately Swiss
• Investment climate– Tourism industry = national priority– Tax incentives, low import tariffs
• Risk assessment– Political – potential future instability– Economic – currency risk – Geographic – weather-related risks, climate change
Foreign Direct Investment
Sri Lankan Tourism and Investment Assistance Agencies
Passionately Swiss
Investment Strategy
• Beach-front property in Hikkaduwa– Location decision– First mover advantage
• Costs – No VAT on construction equipment– Low labor costs• Engineers - $300-650/month• Semi-skilled workers -$50/month
• Significant return on investment
Passionately Swiss
Mövenpick Resort and Spa Sri LankaMövenpick Resort and Spa Sri LankaSoft Opening|Fall 2012Soft Opening|Fall 2012