A golf course for Gozo : a feasibility study

Abstract

It is a widely accepted fact that in spite of the recent increases in high quality hotel accommodation, it seems that Malta is not appealing much to the upper middle to high income tourists. Through developing new golf facilities, Malta and Gozo would be in a better position to increase tourism in the shoulder months, support other marketing initiatives such as the promotion of conferences and incentive travel, and enhance the country's competitiveness relative to other destinations. However the financial implications of such a project are high, as are other consequential factors. The primary objective of this study is to assess the financial feasibility or otherwise of a golf course in Gozo. The study estimates the capital outlay required to establish the project as well as the recurrent income and expenditure, profit and loss, tax computations and cash flow projections. Finally, discounted cash flow techniques and sensitivity analysis provided the basis for a financial evaluation of the project. In the light of the projections presented, this study reveals that the golf course is financially feasible. The results were obtained by both the Net Present Value and Internal Rate of Return techniques. However, such a course will have a major negative impact on the environment and the chances of an 18-hole course being approved, and constructed are slim. As a result, a lot of care should be taken before deciding whether to invest in this project of not.