Scott BrodbeckJustin KahrlMeg MacWhirterJoseph Marchetti

STRT 571 – International Business Environment | May 3, 2010

Passionately Swiss

Company Position• Organizational resources and

capabilities– Expansive property portfolio– Brand recognition throughout

Europe, Asia, Middle East and Africa

– Strong cash position• Industry structure and

competition– Global recession– Market saturation

2009 European Upscale Hotel Guest Satisfaction Index

Mövenpick Hotels & ResortsAward Winner

Crowne Plaza Hotels

Hotel Novotel

Iberostar Hotels & Resorts

Mercure

AC Hotels

nH Hoteles

Meliá Hotels & Resorts

Hesperia

Source: © 2010 J.D. Power and Associates

Passionately Swiss

India

Sri Lanka

Expansion Analysis

• Business expansion objectives– Develop our existing core market – New opportunities in developing countries and

emerging markets

• Customer demand– Expand leisure/holiday

resort segment– Exotic locations

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Sri Lanka

• New market seeking– 26 year civil war ended in 2009– 32% hotel occupancy increase

• Strategic location– Exotic locale– Visitors from existing markets

• Country characteristics– Established infrastructure– Educated labor force

More VisitorsGrowth in tourist arrivals in Jan and Feb 2010 compared to Jan and Feb 2009 % Growth

Sri Lanka 50

Vietnam 36

Japan 29

Singapore 21

Hong Kong 14

Indonesia 14

India 13

Cambodia 10

China 8

USA 3

Source: UNWTO World Tourism Barometer

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• Investment climate– Tourism industry = national priority– Tax incentives, low import tariffs

• Risk assessment– Political – potential future instability– Economic – currency risk – Geographic – weather-related risks, climate change

Foreign Direct Investment

Sri Lankan Tourism and Investment Assistance Agencies

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Investment Strategy

• Beach-front property in Hikkaduwa– Location decision– First mover advantage

• Costs – No VAT on construction equipment– Low labor costs• Engineers - $300-650/month• Semi-skilled workers -$50/month

• Significant return on investment

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Mövenpick Resort and Spa Sri LankaMövenpick Resort and Spa Sri LankaSoft Opening|Fall 2012Soft Opening|Fall 2012