Analytical substantiation of investment project's financial model development in the field of tourism

Abstract

Subject. The article addresses an integrated approach to the analytical justification of investment projects in the tourism and hospitality sector, for making managerial and investment decisions. Objectives. The aim is to develop a comprehensive methodology for analytical foundation of the said investment project, characterized by a systems approach to the analysis of potential cash flows, taking into account the impact of external and internal risks, and the business model specifics. Methods. We apply logical and systems approaches, methods of comparative analysis, investment analysis and financial modeling, risk analysis, including sensitivity analysis, scenario analysis, and a detailed SWOT analysis. Results. We developed a comprehensive methodology for analytical justification of an investment project implemented in the field of tourism and hospitality, including a strategic analysis of the industry and the project, the definition and selection of unit-economy indicators for financial model development, the construction and analysis of the financial model, a detailed SWOT analysis, using a point-rating assessment, scenario analysis, and risk map development. The proposed methodology was tested on the a project implemented in the tourism and hospitality sector. Conclusions. The advantages of the developed methodology include the possibility of comprehensive assessment of factors affecting the economic feasibility of investment projects given the specifics of their implementation in the tourism and hospitality sector, with risks and opportunities associated with prospects for domestic tourism development, and support measures that affect cash flows, the flexibility of designed financial model, based on the indicators of the unit economy, enabling to adapt it to requirements of the project initiators and investors.