Feasibility Study January 2001 PRELIMINARY CONCEPT The present study pretends to analyse the viability of a project that has been commended to us. It consists on a complex, which includes a pavilion that can house different events such as musical concerts, sports events, huge conventions, etc. with a capacity up to 13.000 attendants. It will also include a hotel with 200 rooms to cope with part of the demand generated by the visitors to our complex on each event (see Appendix 2 on page 33) This complex will be sited on the South Bank of the Thames near to the Tower Bridge and the HMS Belfast, the old war cruiseship now converted into a museum, and adjacent to the river. (see Appendix 1 on page 32) PAVILION This project has as central axis the construction of a new generation pavilion with an attendance capacity up to 13.000 people. This modern building will be able to house every kind of different events. It is planned that it will harbour tennis championships, basketball matches, wind−surfing indoor exhibitions, ice−skating meetings, snowboard indoor jumping exhibitions, music concerts, awards delivery ceremonies, boxing meetings, big conventions and as much different spectacles as you could imagine. The hall, a versatile and multifunctional area, will have the most modern technology. It will be an intelligent building where everything could be self−graduated: temperature, light, air, sound and image screens. The attendance will vary according to the type of events celebrated each moment. For being able to hold all the different stages that each spectacle requires, the lower tiers of seats will have a mechanism to remove them from their original place and store them on a reduced space under the other gradins. There will be several sectors into the tiers with different prices, according to the quality of the seats and their geographical situation related to the spectacle, with some V.I.P. zones. In the vomitories there will be many gifts and souvenirs shops, fast−food restaurants, cafes, arcade games rooms, child care zones, etc. that will be rented to another companies keeping a percentage of their revenues for our incomes. It will offer services such as: • Dressing rooms with different dimensions • Catering areas • VIP box, with extra rooms for receptions and different access. • Press rooms, with all the facilities and with an independent circuit. • Infirmary.

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− Special accesses for handicapped people. We must think that the complex will not suffer from any seasonal problems. London itself does not have this kind of problems, having a constant level of visitors during the whole year and we can harbour many different types of events to maintain the level of visitors throughout every different seasonal period. After analysing all the events and spectacles that our pavilion could lodge with the help of the local and national authorities, we can conclude that the following list of activities would be a great impulse for our interests: • ATP and WTA Tour tournaments • Open McDonald's Basketball tournament • FIBA Final Four of the European Basketball League • First class boxing fights • Swimming championships (European and World Cup) • Indoor Cycling and Athletics • Gymnastics • Handball, Volleyball, Football Indoor • Badminton, Table tennis • Mr. And Ms. Olympia of Body Building and the European and World Championships • Windsurf, snowboard, ice skating exhibitions • Hockey and Ice hockey • Trial, karting, motocross, monster trucks • Music Concerts • Awards delivery ceremonies • New Year's Eve parties • Martial Arts spectacles • World Conventions We think that with all these activities we can provide the visitor with a delightful and varied program suitable for all the market niches. As the spectacles are permanently changing the visitors could come to visit the pavilion as many times as they want, without getting fed up with the program, which will vary from time to time. HOTEL The proposed development includes a new built hotel as part as the complex. This hotel will be ready at the same time as the pavilion, and will supply the offer with 200 rooms of diverse category and price. Next we have the list with the facilities that will be offered by the Hotel to all its customers: • Underground car parking with over 800 places, free for all the hotel customers, and charged for the rest of the people, included those that will assist to the events programmed at the pavilion. • Bureau de change on the first floor, which will provide all our customers with British Pounds free of charge for our customers and charged for the rest of people. • Restaurant on the first floor, specialised on British food, but with a wide variety of continental food for customers and non−customers. • Piano−Bar at the first floor, with live music in the afternoon and the evening. • Café−Bar at the first floor opened during all the day, which will provide the customers with drinks. It will have common room with television, arcade games, billiard... • The Hotel will have a 25 meter covered swimming pool on the terrace of the third floor. This swimming pool's sunroof will be opened to the air on summer, when the temperature is adequate to 2

the activity, and covered during the rest of the year. • Sport Centre on the third floor, close to the swimming pool with Jacuzzi, sauna, fitness centre, free weights centre, squash... • Big and luxurious Hall to welcome all our customers, with some sofas, chairs, help desk, reception desk.... The rooms will be divided in three categories: • De Luxe rooms • single room • double room • triple room • Executive • simple • double • Superior The rooms will have all the needed facilities: • Cable television • Bathroom • Telephone • Mini−bar • Internet connection • Ironing facilities • Fax • Monitor instant message service SITE SELECTION The proposed place for our complex is close to the Thames, quite near to the London centre and a main attraction area for visitors due to the buildings located there. The Tower Bridge and Tower of London, also the London Dungeon attraction, are some of the most visited attractions in London, and could provide an average customers to the Hotel and the Palace. But we have to introduce the city of London as a tourist destination first. London is the Europe's most visited city. It has a consistently growth in arrivals, overnights and expenditure since 1992−93. In 1998, however, the upward trend reversed and arrivals and overnights declined although expenditure continued to grow. Its slow pace in coping could now also threaten London's success, as well as its inadequate infrastructure −particularly transport−, and the continuing high prices as sterling increasingly strengthens against the euro and a number of other key currencies. London is undergoing major construction and renovation at a cost of 6 billion pounds, which will greatly enhance its tourism product. Attractions are becoming more widely dispersed through Greater London, facilited by urban regeneration programmes. Nonetheless London has an outdated and overworked public transport system, overcrowded airports, congested roads, inadequate hotel capacity and sometimes poor service levels. The strength of sterling in 1998 proved deterrent for certain international markets and also encouraged a record number of UK travellers to go abroad. This was one of several reasons contributing to a decline in London's overall visitor count in 1998.

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Greater London has a population of 7.1 million and covers an area of 174.000 hectares. London has lacked an overall governing body since Prime Minister Tatcher disbanded the unwieldy Greater London Council (GLC) in 1987. However, a new administrative structure for the capital has been put in place during 1999. The mayor, with an elected assembly, has formed the Greater London Authority, which will be responsible for developing strategies for the city's needs, including tourism. TRANSPORT Almost three quarters of international arrivals in London travel by air, 73.2% in 1997, of whom 52.7% arrived via London Heathrow Airport, 12.6% via Gatwick and 7.9 through London three other's airports, City, Stansted, and Luton. Just 2% of UK arrivals in the capital arrive by air, however, while more than 30% come by train, 10% on a regular bus or coach service and almost half 48% in their own car. The Channel Tunnel is playing an increasingly important role in providing access to London. Around 13% of all foreign visitors to London arrived through the tunnel in 1997, 82% of them travelling by passenger train, 11.4% with their own car and 47% on a coach. Some 13% of all London−bound foreign visitors arrived at a sea port in 1997. Dover is the port handling 9% of all foreign arrivals, while 2.2 % arrive in other ports in Southeast England and 1.8% arrive at Harwich. The expansion of passenger volume at all five airports throughout the 1990s is set to continue. The British Airports Authority (BAA), which owns and manages London Heathrow, Gatwick and Stansted, forecasts that Heathrow will be handling 62.5 million passengers in the year through September 2001 and 72 million by 2008/09, while Gatwick will handle 32.3 million by 2000/01 and 40 million by 2004/05. At Stansted, where the forecasts have been revised upwards as a result of the rapid development of new European low−cost scheduled services, the forecast is for 8.7 million passengers in 2000−01 and 19.3 million by 2008/09. Rapid growth in passengers through Luton airport, which lies 32 miles north of London, was sparked off by the low−cost airlines EasyJet and Debonair. Bullish projections at Luton predict 5 million passengers in 2000/01 (April to March) growing to 10 million by 2010/11. At London City Airport the forecast is for 3.5 million by 2003. Passenger throughput at London airports 1999 Heathrow 61.5 million Gatwick 31.0 million Stansted 7.9 million Luton 5.0 million City 1.5 million Tourism planners are concerned that London will not maintain its position as Europe's leading financial centre and tourism destination without improving air access, ground arrangements and onward links into the city centre. With 60.3 million passengers in 1998, Heathrow is Europe's leading business airport and handles more international passengers than any other airport in the world. Despite terminal improvements −a 25 million pounds extension and renovation has recently been completed at Terminal 2− it is visibly bursting at the seams, hence its plan to build a fifth terminal. Although BAA believes a new terminal is essential to accommodate the forecast passenger volumes, the project is still uncertain, despite the ending of a four−year public enquiry. The final decision will not be made 4

until at least 2001 and industry analysts predict that, even if the terminal gets approval, it might not be ready until 2006. Operations would also probably be subject to various restrictions to appease the strong environmental lobby that has tried to stop the project. Meanwhile, BAA believes it will continue losing traffic of continental rivals. BBAA said at the enquiry into the fifth terminal, that it intends to increase the number of passengers using public transport to and from Heathrow from 34% to 50%. It has also promised to cap the number of car parking spaces at the airport, and has already opened a new 440 million pounds high−speed rail link between Paddington railway station and Heathrow. This is earmarked to carry 6 million passengers in its first year, the aim is to take 3.000 Heathrow−bound vehicles off the road each day. The new rail link could be viewed as a first, if modest, step in developing the kind of integrated urban transport network which is common in many other European cities. At London City Airport, first opened in 1987 and owned since 1995 by Irish businessman Dermot Desmond, terminal and runway expansion is severely restricted by its location, but the reworking of existing space will allow it to double its passenger capacity by 2003. At present, 70% of passengers reach the airport (just 9.6 kilometres from the centre of London) by road. The Jubilee Line extension, from which the airport operate a bus link is helping, but more important in the long term is the revamped plan, announced by the government and the Docklands Light Railway (DLR) in 1999, to build an 80 million pounds 3.2−kilometre rail link between the DLR at Canning Town and the airport. This scheme is tied in with the regeneration of the surrounding area. The airport link, to be built by means of a public−private partnership involving the DLR and a private sector concessionaire, is due to be completed by 2003. Expansion plans are also underway at Luton −which is owned by its local council− where a consortium headed by the US Airport Group international is running the airport for 30 years in return for investing 170 million pounds. All these new developments will help the city of London to improve their infrastructures to receive a bigger quantity of international visitors travelling by air. The increment of International visitors should bear and increment of our market demand. Beside of the air visitors, the construction of the awaited Channel Tunnel should help to bring more visitors from France and Central Europe. The long−awaited high−speed rail scheme to link London with the Channel Tunnel through Kent and Northeast London to St Pancras station, with an international and domestic station at Stratford in east London, was finally confirmed in April 1998. However, it became clear in 1999 that funding was not available for other proposed links which would allow the north of England and Scotland high−speed access to the tunnel. The underground rail system is particularly important for London's tourism industry − an LTB survey showed that 91% of international visitors used the system during their visit in 1997, while only 51% used regular London buses, the second most popular form of transport. Taxis were taken by 30%, suburban trains by 23% and sightseeing buses by 15%−11% used London's hop on/hop off buses and 4% other sightseeing buses. Only 4% used the DLR, while 12% travelled in a friend's car at some point during their visit. Just 2% of foreign visitors used their own car. These percentage shares have stayed much the same over the past five years, says the LTB, although use of suburban trains declined by four percentage points during the period, while hop on/hop off sightseeing buses increased. Use of the underground increased by one percentage point. Some improvements are underway, many of them tied into urban regeneration programmes, particularly the developments in east London. The 3.2 billion pounds Jubilee Line Extension, which runs east and south from Westminster to link central London with Waterloo and Greenwich, is one of the biggest improvements to the underground system in 50 years. The design of the six new stations has been commissioned from some of the UK's top architects, to include new stops at Westminster, Stratford, North Greenwich (for the Millennium 5

Experience) and Canary Wharf (for the fast−growing Docklands area). Upgrading London's 100−year old underground system, used by some 2 million travellers a day, has been variously, and ultimately unsuccessfully, tackled by different governments and transport ministers, but no strategy to date has been able to go beyond a 'patch and mend' approach. Massive funds would be needed to bring the system up to the standards of Tokyo, Madrid or Paris. New tracks, reconstructed banks, rebuilding tunnels and bridges, cleaning up stations and upgrading signal systems are priorities, but little of this can be achieved in the short term, despite the underground's investment fund of 1 billion pounds for 1999 and 2000. The government plans huge cash injections from the private section after 2000, although details of how the funds are to be secured are still unclear. It is thought new mayor will be able to raise additional funds, but any improvements will nonetheless fail to overcome the problem of overcrowding. Despite deteriorating services, underground passenger numbers are continuing to increase (by 8% in 1998). The nearest underground stations to our complex are London Bridge Station, located on the South Bank of the Thames, and Tower Hill, on the North Bank of the Thames and connected to the main lines of the London's underground system. The tube is the most important link for travellers in London, and these two stations should provide our complex with enough connection to the Centre and South of London. MARKET ASSESMENT With over 13.5 million international arrivals in London in 1998, the UK capital attracted more visitors than a number of major country destinations. When the domestic visitors count is added −a further 11.6 million in 1998− the city's total arrivals exceed 25.1 million generating 112.5 million overnights. This puts London squarely among the world's top−ranking urban destinations in terms of both arrivals and overnights. Expenditure by foreign visitors in London was estimated at 6.7 billion pounds. Total visitors spend in the capital, including domestic visitor spending, was 7.8 billion pounds. The reasons for London's pre−eminence as an urban destination are clear. It is a key gateway city for commercial and leisure centre, and its tourist attractions are among the best known in the world. Its cultural life is arguably one of the world's richest and most diverse. Revenues from tourism Tourism accounted for some 8% of London's GDP in 1998, and provided some 200.000 jobs, roughly 8% of London's total workforce. Expenditure by visitors who stayed at least one night in the city amounted to 7.5 billion pounds in 1997 and an estimated 7.8 billion pounds in 1998. Day visitors to London spent a further 1.7 billion pounds in 1997. Expenditure by visitors to London 1998 domestic 1055 million pounds international 6730 million pounds International visitors are largely responsible for tourism expenditure, contributing 86'5% in 1998. International visitors account for a quarter of all underground passengers in the central part of the city, for instance, and their fares make up 15% of the total income of London's public transport and a quarter of all taxi fares. Foreign visitors spent some 1.15 billion pounds in London's shops in 1997 and bought around 30% of all theatre tickets in the West End.

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Arrivals and overnights international and domestic arrivals in London 1998 international 13.6 million change 0.7% domestic 11.6 million change −20.5% total 25.1 million annual change −10.7% One positive sign for London is that the decrease in overnights in 1998 was substantially smaller than the decrease in visitor arrivals, indicating that even though fewer visitors came to London in 1998, they stayed longer. International and domestic overnights in London 1998 international 85.5 million change 0.0% domestic 27.0 million change −11.8% total 112.5 million annual change −3.1% Forecasts for 1999 anticipate a 3% increase in international arrivals to 13.9 million and a 3.5% increase in domestic visitors to 14.7 million. Overnights should increase by 2.7% to 115.5 million, with a 2.9% growth in international overnights to 88 million and a smaller 1.8% growth in domestic overnights to 27.5 million. The averages yearly growth rate from 1997 to 2003 for international arrivals is forecast at 3.4%, and expenditure for the same period at 7.0%. Domestic arrivals will grow by a 1.7% average annual growth rate from 1997 to 2003, an expenditure by 4.8%. Projected growth in international and domestic arrivals and expenditure in London year international expenditure domestic expenditure 1997 13.5 6.449 14.6 1.040 1998 13.6 6.730 14.2 1.055 1999 13.9 7.220 14.7 1.130 2000 14.6 7.745 15.3 1.225 7

2001 15.1 8.400 15.6 1.285 2002 15.6 9.000 15.9 1.370 2003 16.5 9.680 16.2 1.410 London attracts a high proportion of the UK's foreign arrivals. London attracted 55.2% of all visitors to the UK in 1995, its share declining to 53% in 1996 and 52.8% in 1997. The capital's share for 1998 and 1999 is estimated to remain at 52.8%. Major markets The USA is by far the largest market for London, taking a 19.1% share of international arrivals in 1997 and increasing from 2.1 million in 1996 to 2.3 million in 1997−up to 10.7%. Arrivals from North America overall reportedly increased by 12% in the first nine months of 1998. Major source markets for London 1997 USA 2.342 17.3% France 1.254 9.3% Germany 1.153 8.5% Italy 597 4.4% Benelux 557 4.1% Japan 484 3.6% Middle East 466 3.5% Australia 428 3.2% Spain 398 2.9% Western Europe is London's largest regional source of international tourism. Visitors from the European Union and other west European countries together accounted for 51% of total arrivals in London in 1997. The European market declined n 1998, with results for the first nine months of the year showing a drop of 2.2%. The Eurostar rail service is helping the tourism sector of London in attracting more visitants from central Europe, mainly from Paris and surrounding areas, for weekend travellers. Aside from the USA, other major long−haul markets for London include Japan. Australia and New Zealand have continued to show healthy growth. Canada has recovered well and is expected to expand further. That means that we have to focus our events on the principal markets that London have. Our main market for the events should be the national visitors and residents of the city, but we can focus, as well, our events for these international visitors, who probably will use our hotel during their stay in London. London does not have a severe seasonal problem, although the months of July, August and September dominate, with a 31% share in 1997, increasing from 30% in 1996. The lowest season is January to March inclusive. International visitors clearly peak during summer months of July to September. 8

Distribution of arrivals in London by quarter 1997 Quarter 1 20% Quarter 2 26% Quarter 3 31% Quarter 4 23% The seasonal issue does not affect our attraction. Although London would be a seasonal destination, our attraction could provide a wide variety of events to attract national and London residents customers. Visitor profiles Our market profile should be the holiday visitors but we do not reject other types of market, as the VFR, Business.... Over half of all international visitors to London −52.1%− were on holiday, with 16% VFR and 20.7% on business including those attending meetings, incentives, conventions and exhibitions in terms of overnights. Holidaymakers also dominate the international count constituting 43% of the total number of foreign overnights spent in London. VFR took a 21% share of overnights while business travellers accounted for 13.7% Domestic overnights in London are dominated by VFR tourists, constituting 53% of all domestic overnights in 1997 −a substantial growth over 1996s VFR share of 43%. Holidays comprised a lower 27% share of domestic overnights in 1997 and business 13%. International visitors to London spent almost 6 billion pounds in 1997. The higher spending business and MICE sector accounted 29% (1.76 billion pounds) and VFR travellers 12% (737 million pounds). The contribution by the business travel sector increased in 1997 by one percentage point while that by leisure travellers declined by three percentage points. International business travellers stay the shortest time in the capital but spend over double the daily holidaymakers' average spend and almost four times as much as VFR travellers. As would be expected, domestic business travellers stay a shorter time than their international counterparts, but their expenditure per day outstrips that of both domestic and international holidaymakers. Purpose arrivals overnights spend average spend−trip spend−day (`000) (mn) (pd) (nights) (pd) (pd) International Holiday 6.400 33.8 2.529 5.3 395 75 VFR 1.965 17.0 737 8.7 375 45 Business 2.543 10.8 1756 4.2 695 165 Total(incl. Other) 13.500 79.1 6449 6.4 490 75 Domestic Holiday 3.065 8.3 426 2.7 140 50

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VFR 9.050 16.2 239 1.8 25 15 Business 1.755 4.0 312 2.3 180 80 Total(incl. Other) 14.600 30.6 1040 2.1 70 35 Tourists from the USA are by far the largest contributors to London's tourism industry spending almost 1'3 billion in 1997 −a 21% share of the total of over 6 billion pounds. Germans are the next highest spenders but their total spend of 482 million pounds (8% of the total) is less than half that of US visitors. Middle Eastern visitors, although ranking seventh in terms of arrivals, are the third highest spenders. The French, who outranked Germany in 1997 in terms of volume, spent far less than the Germans, however, with a 4.5% share. The Italians spent almost as much as the French, although Italy's arrivals count was roughly half that of France. Almost a quarter of international arrivals in London are in the 25−34 age group, which is also responsible for a quarter of expenditure and overnights. This group is followed by the 35−44 year−old group with the 45−54 year−olds a close third. These two groups also rank second and third in terms of expenditure. The age group that accounts for the second−largest share of nights in London, however, is the 16−24 year−old group although, not surprisingly, this young group only contributes a 12.5% share of expenditure. Accommodation Greater London had over 145,200 beds in 1,054 establishments in September 1998, according to the LTB. Of these, 480 were hotels, motels, inns, guesthouses or aparthotels with 122.255 beds and 574 were B&Bs with a further 23,031 beds. The LTB points out that year−by−year comparisons of its data are not strictly possible since its count is based on responses to questionnaires. If no response is received the establishment is simply excluded. Nonetheless, capacity in London is clearly growing, and the LTB says its target of 10,000 new hotel rooms to come on stream between 1995−96 and 2000−01 appears to be achievable. By early 1998, 4.935 new rooms had opened in 55 hotels. London hotel and room supply 1997 Inner London Hotels 328 Rooms 51.742 % annual change in number of rooms 1.8 Outer London Hotels 155 Rooms 12.962 %annual change in number of rooms 2.6 A listing compiled by consultants HVS International shows that a further 2,267 rooms were planned for 1999 − of which 1,286 might be in Inner London − and 1.613 for 2000, The LTB, which logs all possible hotel projects, estimates that almost 30,000 new rooms could be added to the Greater London total by 2002. HVS, however, suggests a realistic figure would be just under 10.000, with an overall percentage growth of 15% from 1998 to 2002 and compound annual growth of 3% An interesting development has been the opening of budget properties in areas not previously considered by hotel groups. Local boroughs are being more accommodating in granting planning permission, and the new 10

attractions associated with the millennium changeover have also encouraged hotel developers to look at areas farther afield. In 1997 and 1998, for instance, Granada's Travelodges opened in Wandsworth and at the Blackwall Tunnel and Travel Inns opened at Putney Bridge and in Euston. A three−star Jury's opened in Pentonville Road (Islington), an Ibis at London Bridge (Southwark) and another one in Poplar (Tower Hamlets), and a Forte Posthouse opened in Docklands. Holiday Inn Express started operations in the City and in Southwark. At the other end of the scale, interesting upmarket and niche properties are also opening −Hemisphere Hotels' No.1 Aldwych, for instance, the four−star Chelsea Village Hotel in Fulham, the 76−room Myhotel in Bloomsbury and The Marriott County Hall just over Westminster Bridge in Lambeth in the former home of the GLC. The increase in upmarket, niche and budget properties looks set to continue. New hotel development in London 1999/2001 HOTEL ROOMS LOCATION Announced for 1999: Bankside 100 Southwark Charterhouse Square 75 City Chelsea Court 140 Chelsea Cockspur 122 Westminster Forte Posthouse 314 Docklands Canary View Four Seasons 139 Docklands Canary Wharf Great Eastern 266 City Holborn Hotel 200 City fringe Holiday Inn Express 136 Tower Hamlets Silvertown Holiday Inn Greenwich 162 Greenwich Peninsula Ibis Preston 88 Tower Hamlets Shaw Park Plaza 300 Candem St Martin's Lane 204 Westminster 11

Threadneedle Street 70 City Travel lnn 350 Twickenham Travel Inn Tower Bridge 196 City Announced for 2000: The Charlotte Street 54 Westminster Crowne Plaza 203 City Hotel George 44 Chelsea Novotel 216 City Pearl Assurance 350 Candem Sandersen House 150 Westminster Sofitel 189 Westminster Announced for 2001 and beyond : 140 Aldersgate 209 City Battersea Power 350 Wandsworth Station 1 Commercial Street 235 City Great Western Royal 352 West London Greenwich Reach 130 Greenwich Holiday Inn Camden 130 Candem Town Ibis Blackwall Way 88 Tower Hamlets Marriott St Pancras 300 Candem 10 Park Lane 200 Westminster 74 St James Street 122 Westminster Victoria Hotels 297 Westminster West India Quay 220 Tower Hamlets

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London's hotels reached the peak of their performance in 1998. According to consultants Pannell Kerr Forster (PKF), average occupancy fell in 1998 by 2.2 percentage points to 80.9%, while average daily room rates (ADR) grew by 6.8% to 107.82 pounds producing an increase in revenue per available room (revPAR) of 4% to 87'23 pounds. PKF, whose findings are based on a survey of 132 London hotels, predicts that the downward occupancy trend will continue, but does not view the decline as a serious problem − ADR will grow at a rate just slightly above inflation, it says, unless of course, there is an unexpected economic or political crisis in a major market. The surge of new properties in London over the next few years could also have an impact on performance, as hotels fight harder for market share. London hotel's operating performance 1998 occupancy deluxe 1st class business tourist all 1998 79.5 76.6 82.5 82.2 80.9 %change −1.4 −2.9 −1.7 −2.4 −2.2 ADR 1998 212.09 125.78 91.59 62.71 107.82 %change 5.1 6.6 7.5 8.1 6.8 Rev PAR 1998 167.20 96.35 75.56 51.55 87.23 %change 2.8 2.7 5.4 5.0 4.0 London is a prime target for most international hotel groups, but several major European groups are still not represented. London is playing a key role as a bridgehead for US companies developing further into Europe but the push from Asian groups to secure a London presence has been temporarily halted by their economic crisis. Locations in central London are notoriously difficult to acquire, and are likely to remain so. Despite expansions in areas, which have previously been ignored, demand for centrally located hotels remains extremely high, and conversions and refurbishment is the easiest route. Among several new areas likely to attract hotel development is the South Bank, stretching from Lambeth Bridge to Tower Bridge and beyond, which is a growing centre of arts, culture and entertainment. In addition to the National Theatre and Royal Festival Hall complex. the Old and New Vic theatre and the new Shakespeare Globe Theatre, the area will house the new Tate Gallery of Modern Art, the IMAX cinema and the millennium ferris−wheel. Improved transport −the Jubilee Line Extension, the Thameslink (due in 2002) and new stunning pedestrian footbridge linking Bankside with St Paul's (2000)− have also encouraged hotel development. Marriott, Holiday Inn and Novotel have already opened in this area. Docklands is potentially another important new area for hotel developments. After a diffident start, the new business district in Canary Wharf, where transport is fast improving, is becoming a serious alternative to London's Square Mile, the traditional heart of the city's business life. The strongest demonstration of this is Four Season's decision to open a 139−room deluxe property in Canary Wharf. Business travel accounted for 21% of foreign arrivals and 14% of overnights in 1997 as well as a significant 13

29% of expenditure −strong ammunition for those lobbying to develop the MICE sector. Domestic business arrivals comprised 12% fall domestic arrivals and 13% of overnights. London's pre−eminence in Europe's business world is clear and, according to the investment agency London First, its position as Europe's financial and communications centre is strong enough to ensure continuing dominance. At least 20% of Europe's largest companies have their headquarters in London, and, although consolidation has meant that fewer leading companies in the capital are British, London is the chosen European headquarters for a growing number of North and South American and Asian companies. Some 250 non−UK companies have moved into London over the past four years. While prospects for regular business traffic look healthy, the MICE sector is hampered by the lack of a large purpose−built convention centre and by high hotel occupancies and rates, which deter organisers of large events. Despite this, London was ranked second in the world as a conference destination in 1998, behind Paris, and third in terms of international meetings. The LTB Convention Bureau has boosted its staff, stared aggressive promotional programmes and is lobbying for a new conference centre, but in reality this is probably ten years away, those involved in the sector believe. In the meantime, several regional centres have developed conferences facilities that offer improving access and are competitively priced compared with London. Aside from the purpose−built London Arena in Docklands, London's purpose−built conference facilities are largely unable to cater for more than 3.000 delegates −the maximum capacity in single halls at Wembley Conference Centre is 2.700, at the Festival Hall 2.600 at the Barbican 1989 and at the upgraded Queen Elizabeth Conference Centre 1.100. London will be helped by ExCel, under construction in the Docklands, which will have 90.000 square metres of event space, and is due to open phase 1 in autumn 2000. At present just six hotels have halls that can accommodate 1.000−1.5000 for conferences, but the upgraded Stakis London Metropole in Paddington will become London's first purpose−built convention hotel in which 1.200 delegates can stay and also attend meetings. Its 90 million pounds extension will accommodate 1.900 theatre style and will be ready in October 2000. In addition Islington's Business Design Centre is expanding, with a new 1.000 square metre hall with links to the adjacent Stakis hotel due to open in 1999. Our Complex can also be used as a great congress centre, as we have all the technological and human facilities to carry out congresses and meetings of high level, as much in our Hotel as in our Palace. Attractions London's top attractions are dominated by traditional, ever popular sights, the majority of them owned by various trusts and religious bodies, central government departments or local authorities. Of London's 15 attractions that receive over 1 million visitors a year, seven are museums and galleries. Tourist attraction in London receiving over 1 million visitors per annum 1998 Venue 1998 British Museum 5.60 National Gallery 4.80 Madame Tussauds 2.80 Westminster Abbey 3.00

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Tower of London 2.60 Tate Gallery 2.20 St Paul's Cathedral 2.00 Natural History Museum 1.90 Science Museum 1.60 Chessington World of adventure 1.60 Hampton Court Gardens 1.20 London zoo 1.05 Victoria&Albert Museum 1.10 Royal Botanic Gardens 1.00 National Portrait Gallery 1.00 A surge of important new attractions, extensions and renovations to the city's tourism infrastructure is underway, with an investment of some 6 billion pounds (including transport developments) which is funded by the national lottery and the government, and largely matched by private sector funds. All these attractions are not related with the proposed Complex. In this list of the main attractions of London there is no one that could provide the visitors with a wide variety of events. Our Complex could be an attraction by itself in the future, the place where all the famous singers, bands, teams, spectacles have been in the city of London. REVENUES The projected revenues for the pavilion are variable depending on the different types of events, spectacles and activities offered during the season. These incomes will be originated by the hiring of the pavilion and a percentage on the ticket sales. The hiring of the spaces dedicated to shops in the vomitories and a percentage on their sales will also provide benefits. They could also come from external sources of funding like grants and sponsorship. The estimated revenues after calculating the hiring fees and percentages of the tickets and the shop sales are around 21.500.000 pounds per year. • Hiring fee of the pavilion 35.000 pounds • Ticket sales 15.000 pounds • Hiring and shop sales 5.000 pounds • Sponsors and publicity 10.000 pounds • TV rights 7.000 pounds • Government Grant 2.000 pounds • TOTAL 74.000 pounds

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These incomes are an estimated average per day of use of the pavilion. It is stimated that it will be in use around 290 days per year. The price proposed for the hotel rooms, based in an average of the prices in various hotels of the same category located in Central London, can be the next: • De Luxe single room 119 Pounds • De Luxe double room 149 Pounds • De Luxe triple room 169 Pounds • Executive single room 159 Pounds • Executive double room 179 Pounds • Superior room 199 Pounds The 200 rooms that we propose to construct in our hotel will be divided by categories as we show next: • De Luxe single room 60 rooms • De luxe double room 40 rooms • De Luxe triple room 15 rooms • Executive single room 40 rooms • Executive double room 25 rooms • Superior room 20 rooms • Total 200 rooms We can make an estimated revenue for room bookings. Provided that the occupancy average in Inner London is 80%, we have made our projected revenues for the first years: De Luxe Single rooms 2.084.880 pounds De Luxe double rooms 1.740.320 pounds De Luxe triple rooms 740.220 pounds Executive single rooms 1.857.120 pounds Executive double rooms 1.306. 700 pounds Superior rooms 1.162.160 pounds Total 8.891.400 pounds The cost of constructing and running the hotel might be high, but the revenues expected by both, hotel and Pavilion, should be enough to convince the investors to invest in this project. In this list of projected revenues we only include the total of income produced by the rooms, we do not include the revenues from catering, bar, Pavilion hiring and others. The other revenues should be enough to cover the running costs. CONCLUSION As we have seen during all the precedent pages, we can say that the project would be a great success if the local and national institutions help it with a good promotion outside the United Kingdom and inside it. We can hope that the complex could be in use during the whole year because, as we had said before, it can host many events of different types. This will permit avoid any seasonal problems as we can have many kind 16

of attendants both from London residents and foreign visitors. Apart from that, the hotel will provide us a minimum level of incomes during the whole year, as it can be used for any kind of visitors and not only the ones that come to visit the pavilion. Therefore, the hotel could be full of people even while the pavilion is not in use. That is one of the reasons that makes attracting to invest in the project as the hotel ensures a minimum level of revenues that we hope will be enough to cover the running costs. We also can earn money for guided visits to the pavilion as we hope that its futurist design would make an amusement tourist attraction from it. The site location of the project is also a great strength as it is situated in the centre of London and really close to several of the most important and famous tourists attractions. Maybe the lack of parking is an inconvenient but it will be partially solved with the new 800 places parking. The place is also accessible with the public transport network, the underground and the bus. We have not done any research about the costs, as it is quite difficult to get some realistic information about constructing, running and operating costs of a pavilion and hotel. Anyway we hope that the estimated incomes will be more than enough to cover this costs and make profit of it, maybe not the first but the following years. Concluding we can say that what we hope to achieve is a success similar to the one achieved but another similar complexes in Europe such us the Palau Sant Jordi of Barcelona and the Paris Berci. This will be possible with a good advertisement and promotion campaign and if some good spectacles are shown in the pavilion in order to create a very positive first impression in the visitors and attendants. Because of its high level of visitors and tourists, London is one of the best places to organise good events and this will be a great place for them. BIBLIOGRAPHY • Swarbrooke J., The development and management of visitor attractions, 1995, Butterworth − Hulemann • Davidson R., Travel and Tourism in Europe, 1998, Longman • Various, TTI City Reports No. 2 1999, London, Travel & Tourism Intelligence Appendix 1. Site Map

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Map 1. General view of London

Map 2. Concrete view of the site where the complex will be built Appendix3. London Underground Map

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