Financial planning for a short-term accommodation rental company
Avci, Ilker (2020)
Avci, Ilker
2020
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2020060417130
https://urn.fi/URN:NBN:fi:amk-2020060417130
Tiivistelmä
This thesis project was a financial feasibility study that focused on an investigation of revenue and profit estimations for the start-up phase of a projected case company. The case company provides short-term vacation rental services using a community-based accommodation sharing platform, namely Airbnb, for its operations and is based in Helsinki, Finland. The main objective of the thesis is to provide income estimations for this type of a business model and to construct a cashflow model in MS Excel on the basis of the research results.
The theory part of the thesis consists of two chapters that prepare a basis for project development and data collection methods. It begins by focusing on the price determining factors for lodging units and explains customer attractiveness from the revenue and profit maximization point of view. Next, it covers managerial accounting techniques and models exploited in hotel management as well as the Airbnb business model in particular.
The working methods for project implementation were shaped upon information gathered from a literature review that is presented in the empirical part. Secondary data comprised the majority of the data collected that is relevant to the specified business case. The financial planning model was based on the research outcomes and theoretical knowledge base covered in the theory part. Figures placed in the input tab of an Excel tool were built upon assumptions based on the statistical data sets collected. In addition to the financial model created, financial projections from the model provide a relevant framework to be utilized for planning the financial operations of the case company.
Income estimations that are produced in the Excel based financial projection model are presented and the outcomes of financial feasibility study are discussed in the final chapter. Case company is strongly recommended to pay a closer attention on price management as the role of pricing in the industry could have a fundamental impact on revenue growth and profit maximization. A thorough market research that considers both demand and competition analysis in the given area is suggested to be studied for further development. Lastly, the evaluation of the study process and the author’s own reflection conclude the thesis project.
The theory part of the thesis consists of two chapters that prepare a basis for project development and data collection methods. It begins by focusing on the price determining factors for lodging units and explains customer attractiveness from the revenue and profit maximization point of view. Next, it covers managerial accounting techniques and models exploited in hotel management as well as the Airbnb business model in particular.
The working methods for project implementation were shaped upon information gathered from a literature review that is presented in the empirical part. Secondary data comprised the majority of the data collected that is relevant to the specified business case. The financial planning model was based on the research outcomes and theoretical knowledge base covered in the theory part. Figures placed in the input tab of an Excel tool were built upon assumptions based on the statistical data sets collected. In addition to the financial model created, financial projections from the model provide a relevant framework to be utilized for planning the financial operations of the case company.
Income estimations that are produced in the Excel based financial projection model are presented and the outcomes of financial feasibility study are discussed in the final chapter. Case company is strongly recommended to pay a closer attention on price management as the role of pricing in the industry could have a fundamental impact on revenue growth and profit maximization. A thorough market research that considers both demand and competition analysis in the given area is suggested to be studied for further development. Lastly, the evaluation of the study process and the author’s own reflection conclude the thesis project.