OVERVIEW
These notes are an updated extract from the original internal Shoshone Inn business plan. They are designed to provide a brief overview of this destination resort project to others.
 offered at $9,800,000.00
Project Shoshone Inn is being developed as a self-contained 4-Diamond destination resort. The original project concept entailed the creation of a profitable and unique destination resort complex of outstanding beauty and attraction in the town of Three Rivers, California. Three Rivers is situated on Highway 198, just at the entrance to the Sequoia National Park. It is a 3-hour drive from Los Angeles – 4 1/2 hours from downtown San Francisco. The original 10-acre site was purchased in September 1992. An additional 2-acres were purchased by lot-line adjustment in April 1993. A further 2-acre parcel was purchased in 1998. This provides nearly 700 ft of direct road frontage onto Highway 198 at the entrance to the town, and at the other end of the property approximately 500 ft of beautiful river frontage. Picturesque views are afforded through the complete 360 degrees, including views of the High Sierras. The intention was, and is, to create a high visibility oasis, easily accessed by the high volume of passing traffic. The current overall plan includes construction of an initial 14 separate buildings. The Mission style of architecture is after Wallace Neff – a famed Pasadena architect from the 1920’s. Variations will be employed throughout the resort.
PHASE 1 CONSTRUCTION The following Phase I major works are complete.
PHASE 2 CONSTRUCTION With all of the more difficult tasks complete, construction work for the nine structures planned for Phase 2 can now proceed at a very much accelerated pace.
The nine structures to be built in Phase 2 Construction are –
LATER CONSTRUCTION PHASES Subsequent construction phases can involve the spare 2-acre lot. Plans for exactly what is to be built will be determined by market demand.
Project Plan Having established the Inn and its restaurants for the local and existing passing tourist trades, the next stage will be to establish Shoshone Inn as a known "destination" resort. Of the various markets that will be available for exploitation the main target market is Conferences and Seminars. The potential for Catering to Functions has been demonstrated by the long list of Weddings, and Corporate Meetings booked before the restaurant was operational. The plan is to use Direct Marketing to promote our Seminar facilities and to maximize lodging occupancy throughout the non-tourism months. This would include the Internet, Direct Mail, and Media Advertising. The lodging, restaurants, and shops will all be operated as separate revenue and profit centers – within the same corporate entity. Conference attendees will typically pay an overall price for a “package” and will be charged an additional Service Charge in the region of 18% on all facets of their package. Apart from their Lodging and Food & Beverage, and Conference needs other facets could include for instance organized trips to the Sequoia National Park, Hiking, Horse Riding, or Camping in the Park. Market potential The potential for such an integrated facility in this area is clearly outstanding. The only real surprise is that no one has taken advantage of this obvious market potential before this time. A development plan was carried out by the consultants Kolzow & Associates, Anaheim, CA. for Tulare County Development Department in June 1989. This report clearly explains their findings and recommendations for such a project. – some extracts follow.
Financial summary Time Share Since decisions relating to the addition of the Time Share units have yet to be made, there are no financial projections associated with that operation. Irrespective of the additional capital profit there will be a much improved cash-flow position relating to capital expenditure and receipts. This would be further improved by advanced sales. From the standpoint of the existing trading profit/loss projections, the main improvement will be the almost complete absence of the currently budgeted Site Expenses which would be covered by the Time Share maintenance charges. Sales Revenue – Profit/Loss. The standard 5-year budgets cover the first five years trading of the restaurant division, but only the first three years of the lodging division. All budgets reflect a full 12-month trading position for the first year, irrespective of the actual first trading month. So as to include the next two years trading from the lodging division, and the start of rental receivables from the retail shops, the Summary budget has been extended to show the position over the first seven years. Sales Revenue for the Restaurant Division is to a large extent proportional to the quantity of lodging rooms built and available. The restaurant is budgeted to achieve sales revenue of $1.4M in its first trading year, rising to $2.7M after 5 years. Sales Revenues to date exceed budgeted figures in nearly all areas. At the outset contributions to this sales revenue are in the region of 60% from the Café and 20% from Fine Dining - with the balance coming from the Bar, Catering, and Sundry Sales. These proportions shift to nearer 50% Café, 30% Fine Dining by the 3rd year. Nevertheless the prime function of the main F&B operations will not be net profit contribution, but provision of high quality services necessary to such a resort. F&B sales revenue is expected to reach a relative plateau after the majority of lodging units are in place, however the net revenue from the Lodging Division will continue to increase after the position shown on these 5-year budget figures. Dependant upon construction schedule decisions the Lodging Division is projected to commence trading with the completion of the first 24 rooms. The average number of operational rooms increases over successive years through 36 – 48 – and finally the full complement of 60 rooms. Gross sales revenue from the lodging division increase from about $0.75M in its 1st year to about $2.5M in its 3rd year. The figures used for Average Room Rates in these budgets are extremely conservative – actually less than currently being achieved by the Holiday Inn Express in Three Rivers. Actual rates will be very much higher and result in an improved revenue/profit position. Similarly the 5-year cash flow takes into account the capital funds, and interest to be paid on the debt necessary for the construction of the Retail shop units, but does not include rental receivables until Year # 6. LODGING CONCEPT Since the arrangement of a major motel franchise is not planned, it is considered desirable to have a "4-Diamond" rating by the AAA in their Tour Book. To this end we have maintained an ongoing liaison with the AAA Preferred Accommodation Dept. in Los Angeles to ensure that rating. Whilst the allocation of these ratings by their inspectors is to a degree subjective, there are certain major criteria for lodging evaluation, to which we will be attentive -
Some of the criteria have been addressed up-front in the planning stages - Exterior. It is intended to make the building exteriors and particularly rooflines, architecturally striking and appealing, with above all an inviting appearance of "cleanliness". This will be reinforced by the extensive landscaping. Room decor. Particular attention will be paid to this area. We are currently retaining the services of Chambers Lorenz Design Associates. Room furnishings. Minimum requirements and standards for this area are laid down by the AAA in their "green book" - Lodging Diamond Rating Guidelines. It will be our intention to exceed these standards wherever possible. Bathrooms. In common with existing bathrooms, our policy has been to select the best possible plumbing equipment and exclusively Rosa Perrino granite on vanity tops and floors, Carera Venato marble on walls. All bathrooms will also be sufficiently large to move around in, and will be well illuminated - a good proportion will have separate showers. Research of all of the 4-Diamond motel facilities in the AAA Tour Book, shows approx. 50% of units with fireplaces, and some with private spas. Accordingly it is intended to include a zero clearance built-in fireplace - complete with logs - in a high proportion of the rooms. Continuing in-house availability of firewood presents no problem. This, together with a refrigerator and a wet bar with fridge should ensure that these units are outstanding in their guest facilities. A private landscaped patio with tables/chairs, or balcony with uninterrupted views of either the river, or the high Sierras will complete these facilities. SEMINARS From its conception Shoshone Inn was planned primarily to be a unique venue for Meetings. The Seminar Complex that has been designed to be built as part of our Phase II construction will be a state-of-the-art facility planned from the drawing board up to provide the very best in meeting experiences. This complex is planned at approx. 5000 sq. ft. in size, and consists of the main Seminar/Meetings rooms, breakout rooms, separate offices for the use of the meeting organizer, plus toilet facilities. The main conference room can also be used for indoor functions of up to 120 guests. Various seating arrangements are planned for this room, including Theatre seating, and individual round tables Whilst the main use for the smaller room will be for buffet breakfasts and luncheons for attendees, it can also be used for smaller groups and functions. Adjacent to this room will bean F&B servery.. Construction General Available Audio Visual equipment will be comprehensive and state-of-the-art. Special attention has been given to the design of diverse lighting needs for meetings.
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