Better Decisions, Better Developments: How Feasibility and Design Protect Capital and Improve Project Outcomes

The phrase “If you build it, they will come” has become part of the development lexicon, particularly for ambitious hospitality, resort, and entertainment projects. While memorable, it oversimplifies the realities of development. Successful projects are not the product of optimism alone. They are the result of disciplined planning, informed investment decisions, and careful execution.

The reality is that many proposed developments never move beyond the planning stage. A study conducted by the American Hotel & Lodging Association in August 2025 with 387 hotel owners and operators revealed that approximately one-third of survey respondents delayed their developments or renovations, one-quarter scaled back their initial plans, and 8% of projects were canceled entirely. While some of this was influenced by market conditions at that moment in time, including financing availability and rates, construction costs, and overall market performance, it highlights that a significant number of projects that are announced never make it to the finish line. For amusement attractions and entertainment developments, the percentage of projects that never move forward is often even higher.

Every development begins with a series of consequential decisions made long before construction begins. The challenge for owners isn’t eliminating uncertainty — it’s making the best possible decisions while uncertainty still exists.

Every Development is a Series of Decisions

Every hospitality project starts with optimism. Every successful one quickly becomes an exercise in disciplined decision-making. Before a shovel enters the ground, developers must answer a series of critical questions:

1. Are we building the right product?

2. Will investors achieve acceptable returns?

3. Is this the right site?

4. Can this operate efficiently?

5. Can we deliver what we envision?

Answering these reduces uncertainty before capital is committed.

Feasibility and design provide the framework for answering these questions with confidence. Feasibility defines the right project. Design optimizes its performance. Together, they create projects that are more financially viable, operationally efficient, and ultimately more successful.

Five Decisions That Determine Whether a Project Succeeds

Decision 1: Are We Building the Right Project?

Developers often enter a market with an idea already in mind. The more important question isn’t whether that idea can work — it’s whether it’s the best use of the site and the capital behind it. The purpose of feasibility isn’t to prove the original idea is right – it’s to improve it.

Market analysis starts by identifying who the project will compete with, where demand will come from, how far guests are willing to travel, and what motivates them to choose this destination over another. The answers often reshape the original concept: suggesting a project should be larger or smaller, that certain amenities should be added or removed, or that an underserved segment represents a stronger opportunity than the one first imagined.

A well-executed feasibility study objectively evaluates the proposed concept, identifying opportunities to strengthen the project before construction begins. While a new hotel, resort, or attraction—particularly one with a unique concept—may generate strong initial interest, the more important question for owners is whether demand will remain once the novelty fades. By understanding that risk early, developers can refine the project’s size, amenities, positioning, or target market before significant capital is committed, improving the likelihood of long-term financial success and avoiding costly repositioning after opening.

The evolution of Great Wolf Lodge is a good example. Rather than applying a one-size-fits-all formula, the company has adapted the size, amenity mix, and overall experience of its resorts to reflect the demand characteristics of each market, recognizing that different markets support different levels of investment.

Once feasibility has established the project’s strategic direction, design translates that market strategy into a guest experience. Brand expression goes well beyond logos. It lives in the architecture, materials, atmosphere, and guest experience. Every design decision should reinforce the property’s market position while differentiating it from competing destinations. The mix and arrangement of amenities matter as much as the amenities themselves: the same program, organized differently, can produce dramatically different financial outcomes.

By the time design begins, the project’s direction should already be grounded in market realities. Design’s role is no longer to validate the concept, but to optimize it – translating market insights into a destination that maximizes guest appeal, operational efficiency, and financial performance.

Decision 2: Will the Investment Generate Acceptable Returns?

Hospitality projects rarely fail because they lack revenue. They fail because the revenue they generate does not justify the cost of building and operating them.

The hospitality industry offers no shortage of ambitious projects whose vision ultimately exceeded market realities. In many cases, the concept itself wasn’t the problem. The challenge was that construction costs, operating expenses, or projected demand never aligned with the level of investment required.

Early feasibility pro formas often reflect optimistic assumptions around staffing levels, operating efficiency, and market capture. Labor is one of the largest operating expenses and has continued to rise significantly in recent years, putting additional pressure on margins; sales and marketing costs are often underweighted despite their importance in establishing market presence after opening. Benchmarking proposed projects against comparable operating facilities replaces those assumptions with realistic revenue and expense projections — and reduces the risk of undercapitalization or budget shortfalls once the doors open.

Design plays an equally important role in this decision. Pursuing extraordinary guest experiences without regard for budget can create memorable destinations, but also projects that struggle to hit their financial targets. Not every square foot contributes equally to performance; some spaces generate measurable returns while others simply support the operation. Effective design invests capital where it drives revenue and avoids unnecessary expenditure where guests perceive little additional value, treating guest experience as the project’s revenue-generation engine rather than an end in itself.

Guestroom sizing is a good example of strategic investment. The objective isn’t to maximize the size of the guestrooms. The objective is to build them as large as necessary to deliver a comfortable, memorable stay. Beyond that point, additional square footage often produces diminishing returns.

The cost of that extra space isn’t multiplied by one room but by every room in the hotel. An additional 25 square feet in a 300-room property adds 7,500 square feet to the building, along with the associated construction, furnishing, and operating costs. Those dollars may generate a greater return if invested in amenities, premium room types, or guest experiences that influence booking decisions and drive ancillary spending. The goal isn’t to maximize space but to maximize the return on every square foot.

Revenue and cost decisions made together, rather than in sequence, are what determine whether a project delivers the return it was underwritten to achieve.

Decision 3: Is This the Right Site?

Site selection may be the single most consequential decision in development. Developers often identify a site before they analyze whether it’s the right one or perhaps even the only one worth considering. In other cases, they may be left with a site not of their choosing and need to make it work.

Through the lens of feasibility, the implications of location extend well beyond visibility or access: while exposure to major highways can enhance awareness, some resort and leisure developments perform better in more secluded settings that support a sense of escape. Even within strong metropolitan areas, performance can vary significantly by micro-location: a project in a major region such as Dallas–Fort Worth benefits from broad market strength, but outcomes still differ widely depending on accessibility, infrastructure, and proximity to demand generators. Some thrive because they provide a genuine sense of escape while remaining within a comfortable drive time of their target market. Others struggle because, despite attractive real estate, they are disconnected from their primary demand generators or lack the supporting infrastructure needed to deliver the intended experience.

Blue Harbor Resort in Sheboygan, Wisconsin illustrates this principle well. Although the property offered spectacular views of Lake Michigan, poor subsurface soils required significant geotechnical measures that materially affected development costs. The site was still the right location for investment—but only because those challenges were identified early enough to incorporate them into the project’s financial planning. That’s the true value of site feasibility and selection: understanding both the opportunities and the hidden costs before they become expensive surprises.

Entitlements, incentives, utilities, traffic infrastructure, labor availability, zoning, visibility, topography, and buildable land all influence a site’s true potential, as well as its hidden costs. Rather than forcing a fixed program onto a site, the strongest projects let the site and the program inform one another; relatively minor adjustments to layout, parking, or circulation can reduce infrastructure costs and improve the guest experience at once.

A successful site plan also begins shaping the guest experience before visitors ever enter the building: the approach, arrival sequence, and first impressions build anticipation and reinforce the brand, while making the destination visible and memorable to future guests. Every site must ultimately be tested against the realities of the proposed program — height restrictions, setbacks, parking requirements, and room for future expansion can quickly turn an attractive parcel into one that’s financially or operationally impractical.

The strongest sites aren’t simply available or visible. They are the ones where the program and the land have been tested against each other before significant capital is committed.

Decision 4: Will This Operate Efficiently?

A building can be beautifully designed and still lose money every single day of operations. Every square foot, every layout choice, and every workflow either helps staff do their jobs efficiently or quietly works against them. That difference undoubtedly shows up on the P&L long after the ribbon-cutting is over. The question about operations is not whether the facility looks right on opening day. It’s whether it can run efficiently every day thereafter.

Labor is one of the largest and most persistent operating expenses in hospitality. Designing a facility that allows staff to work efficiently isn’t simply an operational objective; it’s one of the most effective ways to improve long-term profitability. Operational planning begins long before design. Feasibility establishes the operational assumptions that shape the project—from occupancy and throughput to seasonality and staffing. Those assumptions inform the pro forma and ultimately become the foundation of an efficient operational model.

While a feasibility study may yield different projections than original internal forecasts, benchmarking against a comparable set of properties often reveals expenses and operational considerations that are underestimated during early planning. A feasibility study can also provide recommendations on areas where efficiencies can be created without sacrificing the guest experience. This can include recommending the right amenity mix and analyzing sizing of various departments to ensure the operation does not suffer from functional obsolescence in some parts of the property.

Staffing levels, departmental organization, demand patterns, and capacity requirements are evaluated against properties of similar scale and positioning to reveal where early assumptions were overly optimistic. The result is a clearer, more realistic picture of what it will actually take to run the facility — allowing developers to avoid under-resourcing operations or overbuilding capacity that never gets efficiently used.

If guest experience is the revenue-generation engine, operational efficiency is the profit-generation engine. These design decisions rarely draw guests’ attention, but every unnecessary step, inefficient workflow, and poorly planned support space becomes a recurring cost embedded in daily operations — and over time, those inefficiencies can outweigh the impact of any single capital decision. Efficient back-of-house planning and streamlined circulation let staff accomplish more with fewer resources, which in turn makes it easier to deliver the consistent service that drives guest satisfaction and repeat visitation.

Operational efficiency and guest experience aren’t competing priorities – they reinforce one another. Better service improves guest satisfaction, strengthens reviews, builds loyalty, and ultimately enhances financial performance.

Decision 5: Can We Deliver What We Envision?

A well-conceived project can still fail to reach the market as intended, not because the vision was wrong, but because the path from initial concept to design to construction was unclear or not market evaluated.

Feasibility reduces this risk by ensuring project scope stays aligned with financial reality before design and construction commitments are made: testing whether the development is appropriately sized for the market and whether capital is allocated in a way that supports achievable returns. Just as importantly, it prevents a project from becoming over-scoped relative to its financial foundation, an issue that often surfaces later as budget pressure, design revisions, and delayed delivery.

On the design side, execution risk typically shows up as cost overruns, schedule delays, and change orders during construction, and it’s most strongly influenced by coordination, constructability, and phasing. Thorough coordination ensures every system and detail is designed not only for performance but for how it will actually be built, reducing the ambiguity that drives RFIs and field-driven redesign. In larger developments, disciplined phasing allows owners to validate performance before full build-out while preserving a logical path for expansion.

Execution risk is ultimately reduced through clarity. When design intent is fully coordinated and buildable, contractors spend less time interpreting and more time executing.

Why Timing Matters

The greatest opportunity to influence project outcomes occurs long before construction begins. Changes made during early planning stages can often be implemented with minimal cost; the same change made during construction can require extensive redesign, rework, and significant financial impact.

As a project progresses, design decisions become increasingly interconnected. By the time construction documents are complete, even a small change can ripple through multiple systems, drawings, and specifications. Unresolved decisions are never eliminated — they’re merely deferred. The only question is whether they’re resolved during planning, when options are flexible, or during construction, when time and cost pressures are significantly higher.