Economic Feasibility Studies and Financial Planning

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Jeremy O’Connor’
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1 Economic Feasibility Studies and Financial Planning Profitability calculation adventure and activity park Silbersattel Client: Town of Steinach Year: 2018/19 The Silbersattel ski area, now known as Thüringen Alpin, is the largest ski area in the state of Thuringia. After years of planning, the project to secure and expand the popular ski area now seems to have reached the home stretch. The current planning includes the construction of a 10-passenger gondola lift from the stadium in Steinach to the Fellberg summit, a replacement of the existing double chair lift with a quad chair lift, an extension of the snowmaking system and the bike park. With two new runs and then 290 metres of altitude difference, the ski area would further expand its leadership in the region. The town of Steinach will act as the builder, but it will put the operation of the resort out to tender. The state of Thuringia is supporting the investment with a double-digit million euro sum. The subject of the profitability calculation, which Montenius Consult carried out on behalf of the city of Steinach, was in particular the clarification of the question of whether a leaseholder could generate a rent from the operation, which could fully compensate for the financial burdens arising for the city as a result of the financing of the municipal share. The results were presented on the 29th of January 2019 at a press conference. Update profitability calculation Gondola Stöckerkopf Client: Baiersbronn Touristik Year: 2018 Baiersbronn is especially known for its top hotels and star chefs. The municipality in the Murggtal also accounts for a large part of the Black Forest National Park and is a popular holiday destination for hikers and families. At the 790 metre high Stöckerkopf, the village also offers the most attractive ski slope in the northern Black Forest, an excellent area for aviation, downhill runs for mountain carts and the Glasmännlehütte. The mountain has been accessed by a double chair lift 50 years ago. Montenius Consult examined the possibilities of replacing the lift. The feasibility study examined various line options, including those that would offer a direct connection of the lift to the Baiersbronner station. For all options, profitability calculations were prepared under different assumptions and the advantages and disadvantages of each option were discussed. A preferred option proved to be the replacement of the railway by a smallcabin cable car on a largely unchanged route. After a technical feasibility study had been carried out by the Schweiger Ingenieurbüro, Montenius Consult updated the profitability calculation as the prerequisite for an investor search in Profitability calculation Sonnwendjochbahn Kramsach/Tirol

2 Client: Association Naturjuwel Rofan Year: 2018 In Kramsach in Tyrol, an association has formed which wants to reactivate the Sonnwendjochbahn, which was closed down a few years ago, in order to make the wonderful hiking area in the Rofan accessible. The preferred option for the association was to build a double chairlift using the existing towers of the old chairlift, offered at a fixed price by the Swiss company BMF. The task of Montenius Consult was to examine the potential economic efficiency of this project and to compare it with the variant of a 10-passenger cabin gondola. The core task was to predict the number of visitors and revenues in view of the high level of competition in the cable car sector and taking into account existing sales tools such as the Alpbachtal Seenland Card. Profitability calculation reconstruction Turmbergbahn Client: Verkehrsbetriebe Karlsruhe GmbH Year: 2017/18 The Turmbergseilbahn is the oldest funicular railway in Germany. In view of the fact that the concession expires in 2019, the Verkehrsbetriebe Karlsruhe commissioned a feasibility study in which Montenius Consult contributed the part of the visitor prognosis and profitability calculation for two preferred options. Profitability calculation Master Plan hiking and skiing area Hörnle Bad Kohlgrub Client: Hörnle Schwebebahn GmbH & Co. Schlepplift KG Year: 2017 Klenkhart & Partner ZT Consulting has presented a master plan for the modernisation and optimisation of the excursion mountain Hörnle in Bad Kohlgrub, which includes measures with an investment volume of around 21.5 million euros. Of these, around 14.6 million euros have been allocated to the mountain cableway investment package. To fund this investment, subsidies amounting to around 30 percent of the total volume are to be used. As the basis for raising the complementary financing of a further 10.2 million euros, a well-founded calculation of the expected profitability of the project was required. This profitability calculation was carried out by Montenius Consult. In addition to the operation of a new 10-passenger monocable gondola as a replacement for the 50 year old double chair lift, it also included the economic efficiency of a winter toboggan run and mountain cart track, a new mountain restaurant as well as the planned parking lot extension. Business Plan expansion Silbersattel ski area

3 Client: Town of Steinach Year: 2015 The expansion of the Silbersattel ski area, the largest ski area in the Thuringian Forest, which has been planned since 2008, is finally scheduled to begin in Montenius Consult together with Klenkhart & Partner and the Schweiger Ingenieurbüro has developed an expansion concept. Based on the planned measures, Montenius Consult prepared a visitor prognosis and a profitability calculation. These serve as the basis for the authorisation of the financing by the municipal supervisory authority and the approval of the subsidies by the Thüringer Aufbaubank. Business Plan Wurmberg ski area Client: Wurmbergseilbahn GmbH & Co. KG Year: 2011/12 As part of the acquisition of subsidies and financing of the expansion project of the Wurmberg ski area (total project volume of around 9.0 million euros) Montenius Consult created bankable documents, including a budgeted income statement and a monthly liquidity forecast over the entire term of the loan. The Wurmbergseilbahn could successfully solicit funds from the state of Lower Saxony in the amount of 2.0 million euros and also ensure the overall financing of the project. The expansion of the ski area is under construction since summer 2012 and will be completed for the 2013/14 winter season. Feasibility study Bergwelt Sophienhöhe Client: RWE Power AG Year: 2011/12 On behalf of RWE Power AG Montenius Consult examined the potential for settling commercial or recreational activities on the Sophienhoehe, the stockpile of Hambach opencast mine, which is the largest landscape structure in Germany with a height of over 200 m and an area of 22 square kilometers. Montenius Consult provided a concept from idea development through the rough concept to business planning including calculations of the expected costs and revenues. The basic idea is the use of gravity for a variety of recreational activities, from downhill biking or summer tobogganing, monster scooters, paragliding and zorbing to flights on the zip line - made available through a central help to climb the pile plateau, preferably an eight seater gondola. Currently, the legal planning preparations for implementation are underway. For more information, inter alia an image film for the project, see Visitor and Revenue Forecast Hundseck ski area

4 Client: Bühlertallifte Hundseck GbR Year: 2011 The Bühlertallift on Hundseck in the northern Black Forest is planning to build a snowmaking system, and furthermore the reactivation of the Hundsecklifte that ceased operation in 2010 and thus creating a connection between the two popular areas along the Black Forest Crest Highway. This would create a unique ski area in the northern Black Forest. For the first stage Montenius Consult carried out a visitor and revenue forecast used as the basis for financing the project. This was based on a simulation of the installation of snowmaking system, the expected snow conditions and the resulting possible number of operation days. The first stage was implemented for the 2012/13 season and proved to be very successful. Economic assessment Balderschwang Ski Resort Client: Town of Balderschwang Year: 2008 The local council of Balderschwang is considering to take over the management of the local ski resort from a private owner. Balderschwang has the highest snowfall of all Germany with an average of 698cm during the last 10 years. Negotiations are based on a feasibility study and company evaluation conducted by Montenius Consult. Future concept and feasibility study for the ski slopes in Hellenthal/Eifel Client: Gemeinde Hellenthal Year: 2007/08 Assesment of development opportunities for the ski lifts by integrating existing infrastructure and additional activities to achieve a profitable economic result. Evaluation of the economic efficiency and presentation of the economic effects of the planned expansion of the Wurmberg Cable Railway in Braunlage/Harz Client: Wurmbergseilbahn GmbH & Co. KG, Germany Year: 2006

5 To ensure the continued existence of the enterprise, the operators of the Wurmseil Cable Railways intend to realize several modernisations, expansions and amendments. Most of the measures affect parts of the nature protection area Oberharz (NSG). As the Wurmberg with its winter sports offers and the all-season cable car service is considered by the council of Goslar to be of major importance for the tourism profile of the Harz, a clearing procedure for the NSG has been initiated. Within this clearing procedure, Christoph Schrahe was commissioned to proof the economic sustainability of the Wurmseil Cable Car project. In order to weigh up the interests of nature protection against common welfare, the economic effects on business environment of the enterprise had to be evaluated and shown as well. Evaluation of economic efficiency snowmaking project Hunau lifts Bödefeld Client: Ski resort Bödefeld-Hunau-Lift GmbH & Co. KG, Germany Year: 2003 To complete the documents needed for an application for funding in the frame of the project Master Plan Wintersport-Arena Sauerland, Christoph Schrahe delivered a business calculation taking into account the planned investments in a new snowmaking system and the associated operational costs. The new construction had become necessary because the existing snowmaking system was under-dimensioned and could not be further extended due to construction conditions. Feasibility studies for snowmaking systems As part of the realisation of projects within the masterplan for the ski resort area of the Sauerland region, Christoph Schrahe carried out the following projects: Snowmaking system for Nordic trails at Ski Langlaufzentrum in Schmallenberg-Westfeld (2004/2005) Snowmaking system for Skiliftkarussell Altastenberg (2004/2005) Snowmaking system for Skikarussell Winterberg (2004/2005). Feasibility Study winter sports offers Panorama-Park Sauerland Client: Panorama-Park Sauerland GmbH, Germany Year: 2003 Development of possible offers during wintertime (alpine skiing, snowboarding, tobogganing, tubing, snowshoeing, ice-skating, snow play area etc.) for the Panorama-Park Sauerland, a theme park on the ridge

6 of the Rothaargebirge currently opened in summer only. The aim was to extend the park s season. In the first stage the snowmaking potential was evaluated with the aid of SnowPlan. Moreover, a break-evenanalysis taking into account the respective investments, operational and financing costs has been performed. The study also included recommendations concerning pricing, the services to be offered and a draft version of a marketing concept. As a result the feasibility was judged critically as the operators of the Panorama Park lacked specific know-how in the winter sports business. Feasibility-Study SnowWave Hahnenklee Client: Goslar Town Council, Germany Year: 2002 A feasibility study for an indoor ski slope in the Harz Mountains: The project included a detailed survey among existing indoor ski facilities and a market and competition analysis in the area surrounding the potential location. Visitor forecasts for different scenarios were carried out and served as a basis for a projection of operational costs and possible revenues. The project turned out to be not feasible. Alternative strategies for developing winter sports tourism at Hahnenklee were proposed. Description and evaluation of capital acquisition strategies Client: Ski lift company Homberg-Ziegenhelle, Züschen, Germany Year: 2001 The management of Homberg-Ziegenhelle Ski Area Ltd. realized that it had to invest in quality improvement in order to increase the area's attractiveness to skiers. However, it was not possible to raise the necessary funds from the company's own resources. SnowPlan outlined different options of capital acquisition as well as chances and risks respectively. A synopsis intended to attract potential investors and an evaluation of the company were developed. Within a short time, the company found new investors and first modernizing measures were realized in summer Calculation of profitability snowmaking system Bocksberg Client: KVG Goslar-Hahnenklee, Hahnenklee, Germany Year: 2000 The Bocksberg Cable Railways had obtained planning permission for the installation of a snowmaking system for the 1.2 km trail from the top of the Bocksberg mountain to the village of Hahnenklee. The

7 Nature Preservation Association lodged a complaint in order to stop the development. They argued that it would not be possible to run the ski area on a sound economic basis. On the basis of a study carried out by SnowPlan it was possible to prove in court that this was not the case. The court ruled in favour of Bocksberg Cable Railways. After two months of construction, the snowmaking system went into operation in November Development Concept Summer- and Winter Sports area Monschau-Rohren Client: Summer and Winter Sports Centre Monschau-Rohren, Germany Year: 2000 With approximately 250,000 visitors per year the Summer and Winter Sports Centre Monschau-Rohren is one of the main visitor attractions in the county of Aachen and particularly in the region Monschau/Eifel. In line with ideas about a succession plan, Christoph Schrahe worked out a development concept indicating the potential of the economic capacity of different additional offers and giving advice about the future positioning of the leisure centre. Feasibility Study snowmaking system Postwiese Client: Postwiesen Ski Area, Neuastenberg, Germany Year: 1999 (Monitoring consultancy until 2002) Planning of a snowmaking system for the Postwiesen ski area Winterberg-Neuastenberg with SnowPlan. Due to a special climate situation it was important to determine the capacity of the snowmaking system exactly. Furthermore, the snowmaking coverage was aligned with the existing lift capacity which reduced the necessary investments considerably. Taking economic and regional aspects into account, it was proved that the project was economically viable. Afterwards the Postwiesen ski area successfully applied for government subsidies. The installation of the snowmaking system in combination with a new electronic ticket system and a new grooming machine (total investment 1.8 million Euros) brought tremendous results: Whereas the 10-year average of operating days had decreased from 71 ( ) to 32 days ( ) before the installation, it increased to more than 90 days afterwards. Average daily visits increased from 250 to 625 and the turnover was increased by 800%. Powered by TCPDF (

Market Analysis and Visitor Forecasts

Market Analysis and Visitor Forecasts Visitor forecast BUGA Wuppertal Client: RMP Stephan Lenzen Landschaftsarchitekten Year: 2018 During the planning of a Bundesgartenschau in the city of Wuppertal, Montenius