Risk factors and mitigations
A transparent investment case must make downside risks as visible as the upside.
Construction and cost
Cost escalation, contractor availability, design changes and weather may increase the capital requirement or delay opening.
Mitigation: fixed-price scopes where appropriate, quantity-surveyor review, contingency and milestone-based draw controls.
Planning and approvals
Tourism use, commercial zoning, permits, access, water, fire safety and environmental requirements must be confirmed.
Mitigation: legal and technical permit audit with conditions precedent.
Demand and seasonality
Snow conditions, weather, macroeconomic conditions and competition can reduce occupancy or achievable room rates.
Mitigation: conservative base case, summer strategy and cash reserves.
Operating execution
Distribution fees, staffing, maintenance, utilities and management costs may be higher than assumed.
Mitigation: independent operating budget and experienced management contract.
Valuation and exit
The projected €8.4 million post-build value may not be achieved, particularly if income stabilises below plan or yields expand.
Mitigation: independent valuation and downside loan-to-value tests.
Transaction structure
Investor priority, collateral, dilution, governance and exit rights are not defined in the supplied materials.
Mitigation: negotiated term sheet, legal documentation and security perfection.
Specific assumptions to challenge
- The stated 8%–18% return range from year three.
- The occupancy ramp from 55% to 75% and the €75 bed-price assumption.
- The summer-demand uplift attributed to planned activities.
- The €8.4 million completed asset value.
- The availability and conditions of any stated gastronomy subsidy.
- The completeness of operating-cost and maintenance assumptions.