Tourism, Environment and Profitability : The Case of the Paphos Holiday Complex

This paper presents a project evaluation study in which the methodological tools taught in the H.I.I.D. Program in Investment Appraisal and Management are applied. It examines the feasibility of a hotel project in Cyprus covering all aspects of investment appraisal. It begins with an analysis of the market for tourism in Cyprus and a definition of the project concept. The financial appraisal analyses the project cash flow from the total investment and owners' perspectives. The economic appraisal of the project is completed after working out the economic discount rate, foreign exchange premium and a series of economic conversion factors for Cyprus. The distributive analysis identifies the project externalities and shows how these may be attributed to various economic groups. Sensitivity and risk analysis further enhances the appraisal by identifying and measuring the level of uncertainty surrounding the projected results. Finally, the study considers the impact of the project on the environment