Financial Model as a Part of an Investment Project: Design for a Middle Price Segment Hotel in Russian Region

In every investment project, the financial model plays a key role in decision making process. A properly designed and flexible financial model allows the investor or other stakeholders to make a reasonable investment decision. The relevance of the paper’s topic is that tourism in Russia as a part of the economy has a great growth potential, especially in the territories with UNESCO and the lack of tourist infrastructure restrains this growth. Consequently, there is a need for quality facilities, including hotels. Therefore, the construction of hotel’s financial model will allow us to understand under what conditions this type of projects will be of interest to investors. The scientific novelty of the research is to identify the specifics of financial modeling in the hotel business, as well as to develop a unique working model for the hotel of the middle price segment in the Russian region. In order to identify the features of financial modeling, a review of theoretical sources was conducted and an expert in this professional field was interviewed. Also, the analysis of the relevance of the location and type of hotel is done, which allowed to develop a model considering the regional features. Analysis of financial reports and profitability indicators of the model showed that when costs are optimized and pricing policy is relevant to the market conditions, the project becomes attractive to a potential investor.