The African Hotel?
1. I have been thinking about this hotel deal for about twelve years. This is when it all started, but it started with the Chinese.
2. I had a number of black people visit with me when I was recently ill both at the hospital and at my home and the thought struck me that I should convert my Chinese hotel deal to an African deal.
3. I think it is time that black Africa have a better imagine. Why not an African hotel?
4. Basically, it is symbolic. That is the goal. Here are some of my thoughts on why we could overpay for any hotel regardless of which one it is.
5. Generally speaking, the incomes of hotels are kind of standard. They are what they are. Probably they make between 15% and 20% profit. With my concept, we wish to add some additional revenue. Revenue will be the following:
a. If we are redoing a hotel or building new, we would use an African motif starting with the bedroom which has the following:
Flooring, Tables, Lamps, Chairs, Beds with mattresses, sheets, pillows and pillow cases Quilts Etc.
Hopefully these products will be made in some country in Africa.
6. All items in the hallways, restaurants, bathrooms will be made in Africa.
7. Our intentions will be to sell these products through North America. All things will have an African theme of one type or another.
8. Under the same heading, there will be a selling organization to sell products to African nations. Even though they are doing it now, I think, if a professional group was put together, it is my assumption that they would rather buy through this new African venture.
9. There will be a new banking system put into the hotel to cover all the necessary banking for all of the above. As a second part to this venture, we hope to add the following:
a. Investment Banking
b. Credit Card business
10. Let me explain this Investment Banking. Almost all countries in Africa were colonized. Many of them took from those countries whatever they wanted and however they wanted. Certainly, there are available minerals of different descriptions such as, gold diamonds, timber, etc. In some cases, it might be oil, gas or coal.
11. The question for someone to raise is in some of these arenas does it pay to continue to explore or mine these products. The question is which products and there is always a question of time.
12. I suppose in some of these countries, they may already have answers to some of these questions. So we would have to look at each country separately to get those answers.
13. As another question that has been posed to me that there is different type of timber available from some of these countries. They sell the timber in the state that it is in without any processing. I believe in some countries they have problems cutting the timbers and moving it to a seaport.
14. I believe this information is important for the reader of this paper. I am sure there are many other possibilities that I have not explored. 15. I have spoken to some people who asked me what the possibilities of having an overall travel agency for Africa to start.
16. I think intelligent people from different parts of the commercial world should sit down together. We could find numbers of different possibilities for this deal to make money on a relatively easy basis.
17. Since this has never been tried before, I, too, as the architect find that I require help in exploring the numbers of different possibilities that exist.
18. Sometimes when I let my imagination run free, I can see no reason why this new venture could not purchase airplanes and vessels and be in the traveling business?
19. It is not my purpose in this memorandum to try to sell anyone anything. This paper is meant to give people an idea of what I am discussing on paper instead of by telephone.
20. I am leaving this memorandum open because I believe it is endless on possible things that could be done.
21. The last part of this memorandum deals with obtaining the necessary funds to make it a viable deal.
22. As I understanding, the hotel business should make a 15% to 20% profit after all expenses. They are generally locked in on the amount of money they can make. With the addition of additional products to sell, I think it is now possible to extend that percentage too perhaps an additional 25% or more with the income to be derived from what I have noted above. If I am right about this, using a test case in my mind, so we can all speak about the same thing, I have envisioned 1,000 room hotel with 80% occupancy. That would be roughly $60 million. Potentially, I visualize the same amount of profit from the other side somewhere between $60 million and some unknown number.
23. I envision taking the deal public and using Yahoo for whatever agreement is made for all parties for their best interest. I believe that with the sale of common stock enough money could be raised to either buy a used hotel and redo it or put up a new hotel. In this instance, there is no reason I can see that with this profit, we could raise upwards of $500 million and pay for everything in cash if necessary.
24. We are in the process of trying to find the right mix of products that will be used in the hotel. We are having problems gathering the data. At the rate we are going, it sounds to me that it will take upwards of four to six months to try to document these products. We are speaking to people and getting information, but it is a slow process.
To end, I don't know how to write a correct business plan to identify the income that I have discussed above, at least not at this moment. This is still a dream, but it is slowly turning into somewhat of a reality. I have asked all of the people I have met, what do they see wrong in the deal or what problems they might see?
From all of the people I have spoken to, they are excited and have not come up with anything deficit wise which is encouraging. It just takes time. I am prepared to have the reader give us their opinion on what they perceive this deal.
By Jay Srybnik