Ski Resort Background - Business Decision Making - ثاني ثانوي

13 The Ski Resort ✓ Project www.ien.edu.sa In this project, you will use Microsoft Excel to help a new ski resort establish a budget for the next three years and decide whether to expand activities into the off-season. The Ski Resort Project will introduce learners to the importance of budgeting and accurate financial modeling that will affect business decision making. It is vital to identify and understand the impact of different variables on any decisions that are made and to determine the path that is best for the financial success of the project. This chapter will use Solver to determine the impact of cost and revenue on budgets. LEARNING OBJECTIVES Once you have completed this chapter, you should be able to: 1 2 Describe the challenges faced by busi- ness owners Explain the impacts of these challenges on small business owners 3 Represent information and highlight patterns and trends in data 4 5 Analyze the ways a new business can develop new revenue activities Demonstrate the business genera- tion activities that businesses should choose وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 443 The Ski Resort Project 443 30/06/2023 14:29

444 13 Chapter رة ا Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 444 Ski Resort Background Skiing is a new activity for Saudi Arabia. Despite the desert heat, ski resorts are being planned and built using renewable energy. Outdoor skiing facilities have never been built in Saudi Arabia before. Trojena, opening in 2026, will provide tourists and citizens alike to participate in all manner Egypt Nuweiba⚫ Dahab Gulf of Aqaba Strait Tiran i Sharm el-Sheikh Haql Sanafir I. Aqaba Jordan Trojena Jabal al-Lawz NEOM RED SEA Neom Bay The Line Oxagon Saudi Arabia Tabuk of adventure and winter sports. It will host luxury accommodation and entertainment in the sustainable, state-of-the-art surroundings of NEOM. The Kingdom will even host the 2029 Asian Winter Games! Imagine that another ski resort is planned for a mountainous area in the north- west of the country. The resort will have capacity for about 5,000 skiers per day and needs to attract around 3,000 daily skiers to be able to operate profitably. The owners hope to sell around 500 season tickets per year to local enthusiasts. Season tickets (allowing the user to use a service multiple times for less than the cost of the same number of single-entry tickets) are sold at a significant discount compared with an equivalent number of daily tickets, but the management knows that season-ticket holders also spend money at the resort on food and drink. The resort will generate income from ticket sales, but also from shops, ski les- sons, restaurants, and equipment rentals. They expect most local skiers will rent equipment because skiing is new to Saudi Arabia, and many visitors will have never skied before. Meanwhile, those who have brought their own equipment may want to buy items they left at home, or to buy branded merchandise from the resort's ski store-such as goggles, ski masks, and gloves. The business would like you to finish setting up their budget in a spreadsheet and run different scenarios. These scenarios would indicate the effects of changes in the number of skiers, different economic outlooks, and climate change. Then, the owners would like you to model a second scenario and add projected reve- nues from opening for summer operations to see how they might affect the key performance indicators (KPIs). 30/06/2023 14:29

وزارة التعليم Ministry of Education 2024-1446 Business Decision Making S1 S2 S3.indb 445 FIGURE 13-1: Skiing is an exciting new activity for Saudi Arabia The resort will be extremely expensive to build and operate so profit margin— KPI―must be maintained for the resort to be viable. So far, it is unclear if people from Saudi Arabia will embrace skiing, although the business' market research suggests people would like to see the sport come to the region. A huge factor affecting the ski industry is climate change. The United States has seen higher temperatures and fluctuations in the amount of snowfall in recent years. These changes have affected skiing at their resorts. This could make sus- tainable resorts in Saudi Arabia more appealing to skiers (continued success and business growth while causing little or no negative environmental or societal impacts). Finally, the state of the economy affects the ski industry. When potential skiers are out of work or underemployed, they do not have disposable income to spend on lift tickets, rentals, food, transportation, and accommodation. The owners of the resort are concerned about their profit margins, and wonder if they should keep the ski area open all year. Normally, ski resorts are only open during the coldest months of the year and remain closed in the off-season. Management wants you to model a scenario where the resort would stay open year-around and offer alternative tourist activities when it is too hot to ski. The Ski Resort Project 445 30/06/2023 14:29