Subscribe to keep reading
Get new posts and unlock the full article.
You can unsubscribe anytime.Resort Business Plan
- 30+ Business Plan Pages
- Investor/Bank Ready
- Pre-Written Business Plan
- Customizable in Minutes
- Immediate Access
Key Takeaways
- The absolute minimum total startup budget requires $93 million in Capital Expenditure (CAPEX) plus a substantial $277 million cash reserve to cover peak pre-opening burn.
- The nine-month heavy upfront investment schedule necessitates securing financing that covers the full CAPEX plus at least three months of pre-opening operating expenses before significant revenue generation.
- The largest immediate financial risks lie within the $5 million property renovation and the $15 million furnishing expenses, which must be prioritized in the initial budget planning.
- Despite the high initial outlay, the resort projects a strong first-year EBITDA of $186 million, indicating rapid potential profitability if the required $277 million cash buffer is secured.
Startup Cost 1 : Initial Property Renovation
Renovation Capital Lock
The initial property renovation requires a firm $5,000,000 capital outlay scheduled across Q1 2026. This budget covers all necessary structural upgrades and finishing work needed before opening the doors in January 2026. Getting this estimate locked down is critical for managing the pre-opening cash burn.
Cost Drivers for $5M
This $5 million estimate is driven by the required square footage improvements and essential structural upgrades identified during due diligence. You need finalized architectural plans to break this down into hard costs (labor/materials) and soft costs (permitting, engineering). If the square footage is significantly larger than anticipated, this number will inflate fast.
- Inputs: Finalized structural engineering reports.
- Basis: Square footage and structural work scope.
- Timeline: Must complete work by March 2026.
Controlling Renovation Spend
Avoid scope creep by strictly defining structural upgrades versus cosmetic finishes; stick to the plan. Value engineering (VE) can cut costs, but not on primary load-bearing or mechanical systems. If you delay non-essential aesthetic upgrades, you might save 10%, but that defers the luxury feel guests expect.
- Lock in material pricing early in 2025.
- Use phased construction scheduling.
- Avoid change orders post-January 2026.
Cash Flow Impact
This renovation cost directly impacts the $277 million operating cash buffer needed for Q1 2026. If renovation runs late or over budget, you drain working capital faster than planned. Honestly, Q1 2026 is the financial choke point, and delays mean you’ll need that cash buffer sooner than defintely planned.
Startup Cost 2 : Guest Room Furnishings
Furnishing Budget Set
The total budget for furnishing 140 rooms is set at $1,500,000, split between 80 Deluxe Kings and 60 higher-tier Suites/Villas/Penthouses. This cost dictates the quality standard for the entire guest experience. You need firm quotes now.
Inputs for Room Cost
This $1.5 million covers all Furniture, Fixtures, and Equipment (FF&E) for guest areas. To validate the estimate, you need detailed quotes based on the 80/60 room split. Higher unit costs for the Suites will heavily influence the average. Honestly, this is a big chunk of the initial outlay.
- Total rooms: 140
- Deluxe Kings count: 80
- Suites/Villas count: 60
Managing FF&E Spend
Avoid buying everything new if durability allows. Negotiate bulk pricing with fewer vendors to drive down the per-unit cost, especially for the 80 standard rooms. If onboarding takes 14+ days, churn risk rises on delivery timelines. A good target is keeping the average cost under $11,000 per unit.
- Phase procurement by room type.
- Prioritize durability over fleeting trends.
- Use existing supplier relationships.
Quality vs. Replacement Cycle
Spending less now on items like casegoods means higher maintenance costs later, hitting your operating expenses (OpEx). If you buy cheaper beds for the 60 premium units, guest satisfaction drops fast. You defintely need to balance initial spend against a 7-year replacement cycle.
Startup Cost 3 : Kitchen Equipment Upgrade
Kitchen Budget Reality
You must budget $750,000 now for commercial kitchen gear. This spend is non-negotiable to support your projected Food & Beverage (F&B) revenue starting at $150,000 monthly in 2026. Equipment quality dictates service speed.
Equipment Cost Breakdown
This $750,000 covers all industrial kitchen buildout required for scale. It’s a fixed asset cost necessary to hit the initial $150k F&B target starting in 2026. Remember this is just one piece of the larger capital stack needed before opening.
- Covers ovens, refrigeration, and ventilation systems.
- Supports expected operational throughput.
- Budgeted alongside $1.5 million for furnishings.
Managing Equipment Spend
Don't buy everything new upfront if you don't need peak capacity immediately. Look into leasing high-cost items like specialized combi ovens to smooth out the cash drain. Get competitive quotes; kitchen suppliers often have flexibility if you commit to volume.
- Lease equipment to preserve working capital.
- Phase purchases based on ramp-up schedule.
- Avoid buying capacity for Year 3 revenue today.
Operational Risk Check
If you short the $750,000 budget, your kitchen capacity will bottleneck F&B sales below $150,000. Poorly equipped kitchens cause staff burnout and slow service times, which directly hurts guest satisfaction scores. Plan for delivery and installation finishing by December 2025, defintely.
Startup Cost 4 : Landscaping & Spa Facilities
Target ADR Investment
You need to budget $1.3 million total for outdoor appeal and wellness spaces. This combined investment in landscaping and spa upgrades directly supports the strategy of commanding a high Average Daily Rate (ADR) from your target market. Don’t see this as soft cost; it’s essential pricing infrastructure.
Cost Breakdown
This startup cost bundles two distinct capital expenditures required before opening. You must allocate $800,000 specifically for exterior appeal, like grounds maintenance systems and aesthetic improvements. Separately, $500,000 covers necessary enhancements to the spa facilities themselves. These are non-negotiable for luxury positioning.
- Landscaping budget: $800,000
- Spa enhancement budget: $500,000
- Total required: $1.3 million
Managing Build-Out Spend
You can’t cut quality here; these drive perceived value for high-paying guests. Focus on competitive bidding for the construction phases, perhaps phasing the spa enhancements if cash flow is tight post-renovation. Avoid scope creep on high-end material selections for the grounds.
- Use three quotes for all major landscape contracts.
- Delay non-critical spa features until stabilization.
- Benchmark spa build-out costs against similar properties.
Pricing Leverage
If the landscaping and spa don't feel premium on Day 1, your ability to charge a high ADR during the initial six months evaporates. This spend locks in your initial pricing power and justifies the premium rates you need to cover the $5 million property renovation.
Startup Cost 5 : Pre-Opening Staff Salaries
Pre-Opening Payroll Burn
Pre-opening salaries are fixed cash drains that start before any revenue hits the books. You must fund the $180k/yr General Manager and $120k/yr Head Chef entirely from capital until the resort opens. This is non-negotiable overhead.
Cost Inputs and Timing
This cost covers key staff hired before opening, like the General Manager and Head Chef. The GM salary is $15,000/month ($180k divided by 12 months). This fixed expense must be covered by your $277 million operating cash buffer until occupancy starts.
- GM salary: $15,000 per month.
- Chef salary: $10,000 per month.
- Funded by working capital.
Managing Key Hires
Avoid paying full base salaries until staff can actively contribute to setup, maybe 60 days out. A mistake is starting salaries during the $5 million renovation period. Consider offering a sign-on bonus instead of a full salary for the initial planning phase. Defintely keep contracts tight.
- Delay start dates if possible.
- Use bonuses for early planning.
- Keep salary ramp-up tight.
Cash Flow Sensitivity
If the pre-opening phase stretches beyond three months, you add $25,000 in extra payroll monthly for these two roles alone. Model this sensitivity against your cash buffer; timing is critical for cash flow stability.
Startup Cost 6 : Technology & Systems
Tech Budget
You need $300,000 set aside for core technology infrastructure supporting operations for your resort. This covers the Property Management System (PMS), Point-of-Sale (POS) systems, and the necessary network backbone to run a 140-room luxury destination. Get this right, or guest experiences suffer immediately.
Stack Allocation
This $300,000 budget must cover systems handling 140 rooms and multiple revenue centers like dining and spa services. The PMS manages reservations and guest folios, while POS systems capture all ancillary revenue transactions. Network infrastructure ensures these systems communicate reliably across the property, which is critical for high-end service delivery.
- PMS licensing and setup fees.
- POS hardware and software licenses.
- High-density Wi-Fi deployment costs.
Cost Control
Avoid large upfront software purchases; prefer Software as a Service (SaaS) subscriptions to shift costs to operating expense (OpEx). Negotiate implementation timelines, as complex resort setups can easily run 60 to 90 days. Integration fees between the PMS and POS often inflate budgets unexpectedly if not capped early on.
- Prioritize cloud-based PMS solutions.
- Bundle network hardware quotes early.
- Cap third-party integration costs upfront.
Billing Integrity
The single biggest risk here is poor integration between the PMS and the F&B POS. If check transfers fail, you risk inaccurate guest billing, which directly impacts Average Daily Rate (ADR) recognition and guest satisfaction scores. Test this link rigorously before opening day, as manual corrections are slow and expensive.
Startup Cost 7 : Operating Cash Buffer
Cash Buffer Mandate
You must secure $277 million in working capital now. This amount covers the peak cash flow deficit projected for March 2026, ensuring the Havenwood Resort & Spa survives until it hits consistent profitability.
Deficit Coverage Needs
This massive buffer covers the negative cash position before the resort generates enough operating cash to sustain itself. It bridges the gap between initial high capital expenditures, like the $5 million renovation, and steady revenue generation from lodging and $150,000 monthly F&B sales targets.
- Timing of peak deficit: March 2026.
- Initial fixed overhead costs.
- Time needed to reach operational break-even.
- Total pre-revenue burn rate.
Managing the Burn Rate
Managing this cash requirement means aggressively hitting revenue milestones early. Delaying non-critical spending, like optimizing the $800,000 landscaping budget until Q3 2026, can slightly reduce the peak need. High Average Daily Rate (ADR) must be maintained to shorten the deficit window.
- Negotiate longer payment terms for vendors.
- Stagger capital expenditure timelines.
- Accelerate booking cycles for corporate retreats.
Buffer Non-Negotiable
Failing to secure the full $277 million buffer means the resort stops operating before it can prove its luxury model works. This isn't just runway; it’s the required capital to survive the initial negative cash cycle before operations become defintely profitable.
Resort Investment Pitch Deck
- Professional, Consistent Formatting
- 100% Editable
- Investor-Approved Valuation Models
- Ready to Impress Investors
- Instant Download
Related Blogs
- How to Launch a Resort: 7 Steps to Financial Feasibility
- How to Write a Resort Business Plan (Funding & Forecast)
- 7 Essential KPIs to Track for Resort Financial Health
- How Much Does It Cost To Run A Resort Each Month in 2026?
- How Much Resort Owners Typically Make?
- 7 Strategies to Increase Resort Profitability and EBITDA
Frequently Asked Questions
The highest projected Average Daily Rate (ADR) is for the Penthouse, reaching $3,000 on weekends in 2026 Deluxe Kings start at $450 midweek The overall occupancy target is 580% in the first year