Turkey ‘s alone characteristics will make competitory advantage to RoadHouse Hotels, alone factors like location, the multi cultural environment, sing European life style and Islamic cultural influences, sing a meeting point between Europe and Middle East. Turkish hotel market offers a great potency for new investings and developments. The investor ‘s appetency accelerated in line with the betterment in economic conditions in the last twosome of old ages.

A good formulated scheme facilitates the systemization and allotment of an organisation ‘s resources, taking into history the organisation ‘s internal strong points and its defects so as to accomplish a feasible, exceeding state of affairs and besides to anticipate possible contextual alterations and unannounced action by crisp challengers. Expansion is virtually a must for concerns in a modern, dynamic economic system.

Roadhouse Hotels with this investing will increase their hotel portfolio and increase their trade name impact, particularly because they will be come ining a market that is non yet to the full explored by budget trade name hotels, therefore it can be considered as competitory advantage.

Although it is a different cultural environment, but if wining with this endeavor – by come ining the Islamic country – it would be interesting to see if there would be more investings in another geographic country like the Middle East.

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They found that non-equity manners of development ( direction contracts and franchising ) are accounted for 66 % of foreign operations. This fact implies that managerial control is non weak in those manners although, traditionally, research workers perceive control as a consequence of ownership ( Chen and Dimou, 2005 ) .

Harmonizing to Turkey Market Hotel Report ( 2009 ) Izmir is in the top 10 metropoliss, with an norm of 2.9 darks.

On franchising

Franchise contract is ideally designed to accommodate the franchiser, in this instance RoadHouse Hotels, because it will assist keeping the high quality criterions and rigorous planetary control of the hotel merchandise. In this instance, the franchiser will take a firm stand that the hotel is freshly built one, designed harmonizing to its ain specifications, or it can be a belongings that will be converted ( Cunill, 2006 ) .

Franchise contracts involve a lower investing hazard and a decreased cyclical hazard for concerns in comparing with belongings ownership. In contrast, with franchise contracts, even if negative consequences are obtained one season, the franchiser will still do a net income. This is a consequence of the fee system, the franchiser charges a fixed per centum based on the figure of hotel suites and another fixed sum dependant on the hotel turnover ( Cunill, 2006 ) .

Marketing mix

Through the usage of the drawn-out version of the selling mix, one can break understand all the variables that need to be taken into consideration. Furthermore the 3 new P ‘s are of of import usage for the service industry ( McDonald and Dunbar, 2007 ) .


The merchandise comprises the budget hotel manner of room, with the norm of 25 square metres, divided by 5 floors. In add-on this budget hotel will hold free entree radio in the suites, other hotel rivals already consist this free supernumerary, and it would a downsizer if RoadHouse did n’t follow the technological path excessively.

Monetary value

Using the Big Mac Index and comparing the competition, one Big Mac is deserving 2,29 GBP or 5.15 YTL, being the mean room rate in the UK 48 ? per dark, and adjusted to the Turkish economic system the monetary value will travel down to 39 ? .

Topographic point

By put ining a hotel in the metropolis of Izmir, in the street of Gursel Aksel Blv. with Inonu , near t the ferry port, and 10 min off from the International Fair Park, therefore finishing with the company ordinances by turn uping the hotels adjacent to the chief arteria roads near major towns and metropoliss. Harmonizing to Turkey Market Hotel Report ( 2009 ) Izmir is in the top 10 metropoliss, with an norm of 2.9 darks.


The hotel will be promoted harmonizing to the normal media path, particularly in the cyberspace, minimising cost with the printed publicity bundles.


Market cleavage is classified as being the procedure of spliting clients by groups with buying behaviour and similar demands ( Weinstein, 1994, as stated by Morritt, 2007 ) . An effectual cleavage will let the company to choose the groups that will break service and turn out most profitable, therefore assisting the company answer those demands ( Morritt, 2007 ) .

For this enlargement the cleavage will be customer-driven, go toing to the typical budget hotel tourer, with its branchings specified below.

This budget hotel will pull diverse market sections:

Business travellers and tourers go toing the international carnivals in Izmir:

Harmonizing to the carnivals happening in the international carnival, this will pull concern travels from Turkey and good as other from the other take parting states, it can include Europe, Middle East, and Asia

European Tourists:

Germany tourers, they represent a sum of 16,8 % of entire visitants ( 2009, Turkey Hotel Market Overview )

Turkey is still near adequate to Europe so that some states can venture in auto Tourss all the down to Izmir, with attractive cultural touristry and some beaches. It may besides include immigrants that return to their state for vacation.

English tourers:

English tourers like to go to alien topographic points, like Turkey, viz. Izmir, besides English tend to be loyal to the trade name, taking a trade name known for them so embarking in a new hotel that wo n’t fit their outlooks

Short stay travellers on a low budget:

3 twenty-four hours stay ; can include backpackers, individual travellers that are in hunt for a one dark stay in the comfort of standard budget hotel.


Effective procedure, that will the trade name name up to its criterions, this will include all processs, mechanisms and flow of activities by which the service is consumed. It is finally associated to a figure of procedures in a organisation that make selling effectual, for illustration: the procedure to manage with a client ‘s ailment, the procedure to place the client demands and demands, the procedure for managing with order, merely to call a few ( McDonald and Dunbar, 2007 ) .

Physical Evidence

Consumers will do perceptual experiences based on their sight of the service mix ; consumers will do perceptual experiences based on their sight of the service proviso which will do an impact on the organisations perceptual program of the service. Therefore, to better trade with ailment it has to be in focal point a good client service program, and a good recovery program so when a clients ‘ outlooks get frustrated there are compensation schemes to do up for the client. It is besides of import to give some deliberation about security planning ; the cost of the hotel room is non ever the best predictor of how safe the room will be ( O’Fallon and Rutherford, 2007 ) .

Outline Development Budget

With the company committed to about 50 % of the investing, the staying 50 % must be raised through a loan from a bank. The undermentioned budget is present in the tabular array in the Annex.

The mean allotment of budgeted costs for all type of hotels is ( Coy, and Haralson, 2003 ) :

13 % for land

11 % for development and soft costs

61 % for site betterment and edifice building

12 % for FF & A ; E

3 % for pre-opening and working capital

100 % for entire undertaking costs

Harmonizing to the Gardiner study on, the international building cost in Meleagris gallopavo, in suburban countries hotels is low 387 ?/m2 and high of 644 ?/m2, besides the typical figure of floors is 5, this manner the suites would be distributed on 4 floors, and the other floor would be for the response and the eating house. The hotel will hold 80 suites.

The finance will be done trough a loan, a short-run loan, with the current involvement rate at 6.5 % ( last alteration 20 November 2009 ) . The Turkish Lira ( YTL ) still continues to present high return on investing.

Using the Big Mac Index ( 2009 ) the monetary value was set at 39 ? .

RoadHouse Hotels will finance half of the investing ; the other half will be financed by a loan to a Turkish Bank, therefore supplying long term finance.

The belongings land cost in Turkey, harmonizing to the research made in the existent estate agent companies, norms from 450.000 ? to 1.000.000? .

Food and drink scheme

The hotel industry is re-evaluating its relationship with in-house nutrient and drink operations. As a consequence, some hotel companies no longer see nutrient and drink a necessary agreeableness to be provided in the traditional sense. However, whether provided by hotel direction or leased out to another operator, nutrient and drink is important to image, and as a consequence remains closely linked to success ( Brennan, 1987, as stated by Hallam and Baum, 1996 ) .

In add-on, there are many benefits that come from undertaking out parts or all of the nutrient and drink operation. Contracting out have several advantages: may let directors to supply better service to the housing invitee ; it may assist pull more lodging invitees to the hotel ; and undertaking out may assist hotel eating houses to vie with the outside market.

On the other manus, the ground for undertaking should non merely based on these premises but besides fiscal grounds, to derive fiscal stableness or fiscal investing in the operation, or cognize how, to derive a proved construct that will run into your hotel invitee ‘s demands and assist pull local clients by having bill of fares that emphasize local or regional culinary art.

These constructs can be a branded eating house concatenation, or a local forte chef, or to a well-established regional independent operator. The end is to do the hotel eating house entreaty to local patronage in add-on to the invitees ( O’Fallon and Rutherford, 2007 ) .


During the last decennary, against a background of economic recession, budget hotels have been one of the most successful phenomena in the European hotel industry. In recent articles they are frequently mentioned as a ‘boom ‘ or as stand foring one of the most important tendencies in the international cordial reception industry. ( Fiorentino, 1995 )

Budgets are a good tool to mensurate the quality of an investing, in placing future jobs or even the deficiency of success of the investing. A long term accomplishment will intend that this investing is worth it.

With this full research one can make the decision that this investing is a fruitful one, why? For the figure of grounds appointed in study, from its location, to the scorecard and the chance of a turning touristry market, open to new consumer market. However this does n’t number the intangibles of the following economical crisis, therefore the high hazard degree of committedness whenever one ventures into foreign markets.

By analysing the quality of the investing utilizing the right tools like, the Investment Appraisal ; by the payback method and the ROCI ( return on capital invested ) 11,71 % and ROCE ( return on capital employed ) 4,20 % . However the last per centum is a bit low it does n’t annul the investing wholly. The investing will pay itself in around 5 old ages.

Franchise is the safest type of concern that would be equal to this type of concern ; it is a safety cyberspace for the investor.

This is a mostly additive account of the complicated procedure that a developer goes through in order to make a hotel. It has been described in a measure by measure procedure, but in world, many of the stairss are carried out at the same time to salvage clip, and money.


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