How to Shape a Business Service to Its Customers' Exact Needs: A Hostel in Lisbon

Hugo Miguel de Brito Silva Moreira Faísca and Leandro Pereira
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Hugo Miguel de Brito Silva Moreira Faísca: ISCTE-IUL, Lisbon, Portugal
Leandro Pereira: Department of Marketing, Operations and Geral Management, ISCTE-IUL, Lisbon, Portugal

International Journal of Knowledge-Based Organizations (IJKBO), 2015, vol. 5, issue 4, 62-79

Abstract: The present business plan intents to analyze the financial attractiveness of creating a Hostel within Lisbon and targeting a service proportionate to guests' needs. That is, a service design based in the importance customers attribute to each offer. As observed, the market at Lisbon reflects a very competitive field where Hostels provide high quality services for low prices. During the low season (October-April), money is lost due to low occupancy rates. Nevertheless, profit resulting from the high season (May-September) is enough to null the negative results of the low season and still present a positive result at the end of the year. Financially, the evaluation outputs a NPV of 42 726€, IRR of 25.64% and Payback period of three years and four months. With vital indicators pointing towards a profitable business, the conclusion is that, based on the analysis performed, such a Hostel is financially viable.

Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jkbo00:v:5:y:2015:i:4:p:62-79

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