Experts of Central Asia (ECA) has successfully completed a project to provide consulting services to four tourism industry enterprises operating in the hospitality industry which lasted from September 2021 to May 2022.
Consulting services were carried out under the framework of the IFC (International Finance Corporation, a member of the World Bank Group) project to ensure sustainability and growth in Kyrgyzstan which implements the tasks of supporting the growth of the tourism sector and increasing investment in tourism. The main objective of the IFC project in the Kyrgyz Republic is to increase the resilience of small and medium-sized enterprises (SMEs) and support the recovery from the COVID-19 crisis in the tourism sector, as well as to open up new opportunities for private investment in the digital infrastructure. The project is focused on soft adventure tourism and winter tourism markets as well.
The purpose of the advisory services was to provide a technical assistance and support to selected hotels in the country to improve their access to finance. Access to finance should help these companies in expanding the hotel business by building new branches in the regions of the country, acquiring and modernizing fixed assets, introducing new technologies, innovative activity and creating jobs.
The consulting services provided by ECA included:
- Development of three Business Plans and financial models for the development of the expansion of the three hotels activities and;
- With the participation of an international consulting company development of Marketing Strategy (strategic marketing plan) for one company / hotel in order to expand and further develop/promote the hotel business.
As part of the development of business plans and financial models the ECA performed the following tasks:
The methodology for the development of business plans is presented based on the internationally recognized UNIDO standard taking into account local conditions, laws, rules and peculiarities;
- Site visits of selected hotels and collecting the necessary information (Organizational, HR, Financial, Marketing, Legal, Environmental, etc.);
- The evaluation analysis of each selected hotel was carried out. An assessment was made on the current state, business needs, financial condition of the enterprise, as well as the proposed business idea. In particular, the current situation of the tourism industry in the Kyrgyz Republic was studied taking into account the impact of COVID-19;
- The training module was developed and a 2-day training was held for program participants on the topic: “How to develop an effective business plan?”;
- A comprehensive business plan was developed and presented for each of the 3 hotels with translation of Business Plan’s Executive Summary into English;
- A financial model was developed for each of the 3 hotels including forecast indicators and calculations of expected financial results of activities (forecast of sales volumes, cash flow, profit and loss, assessment of the economic efficiency of each investment project - net present value (NPV), internal rate of return (IRR), payback period including discounting, average rate of return (ARR), determination of financing needs);
- Accompanying the selected hotels in visiting the financial institutions to obtain funding for their investment projects.
Regarding the development of the Marketing Strategy (Strategic Marketing Plan) for one of the hotels ECA performed the following tasks:
- Visiting each hotel selected by the IFC program and collecting the necessary information to develop a Concept and the hotel Marketing Strategy for the next three years;
- Carrying out a marketing research according to a special template developed by an international consultant;
- Conducting a Strategic SWOT analysis session for the hotel;
- Development of the Mission, Vision, USP (unique selling proposition), Strategic business / marketing goals and objectives;
- Definition of the target market and description of Portrait of potential client;
- Providing support in the development of the Marketing Strategy itself and the Tactical Action Plan as well as the planned launch of a new direction of the hotel business;
- Development of detailed budget for implementation of the hotel’s Strategic Marketing Plan and the activities within the tactical action plan including KPIs.
The implementation of all the tasks set was carried out in a proper quality and on time with the direct active participation of the owners of the selected hotels. Under the support of the ECA experts the ready-made business plans were submitted for financing to banks and investment funds for the subsequent implementation of promising business projects.