Reception Facilities

Industry data

According to estimation, there are approximately 700 active reception facilities in Israel. Approximately 170-200 of them are defined as outdoor reception gardens and the rest are reception halls.

 

Industry Sub-division

Reception garden are operational as one of two standards: either a full service garden or operating the only the garden, while commissioning out all other activities.

 

Market Characteristics

  • Weddings constitute the greater part of reception garden occupation.
  • Gardens are located outside of city centers and extend over a relatively large area. Their uniqueness lies in the rural atmosphere and spaciousness they provide.
  • Seasonality- reception gardens are active mainly from May to October, although contemporarily most can be adapted for use in the winter as well. Of weekdays, activity reaches a peak on Tuesdays (Two Times Good).
  • Many reception gardens are established near a garden, swimming pool, orchard, or nature site.

 

Customers: Defining the Target Market and its Size, Market segmenting

  • The target market is mainly composed of couples to be married as well as families conducting a Bar/Bat Mitzvah or Brith ceremonies.
  • Additional potential lays in business corporations and workers’ unions conducting yearly or periodical events. Potential clientele of this segment should be targeted mainly for businesses located within a 50 KM radius from the garden. Most clientele are of middle class or higher.

 

 

Competition

Main competition lies in hotels, reception halls and other reception gardens.

Advantages include prestige, comfortable parking arrangements, flexible operating hours, use of vast area at relatively low costs.

Disadvantages include seasonality, relatively longer travel and arrival time.

 

Vendors

Vendors for the industry can be divided into three main groups:

  • Supply vendors: kitchen supplies, guest area and cutlery supplies.
  • Food and drink vendors.
  • Additional vendors: flowers, gardening, music.

 

 

Marketing resources

Typical marketing resources include advertisement in media and wedding guides, on internet sites, direction signs and billboards, using PR and being affiliated with brokerage offices who specialize in event planning.

After the reception facility has established a reputation, marketing will require very few additional financial investments as “word of mouth” spreads quickly.

 

Factors Affecting Success:

Central success factor is reputation. Reception facilities that are able to correctly associate with clientele of any certain type will have high occupancy.

In addition, operational expenses should be well managed in order to maintain profitability.

 

Entry Barriers:

  • The primary barrier is the initial high investment required in order to establish a reception facility.
  • Additional barriers are the licensing process and modification of land purpose if required.

 

Required Equipment:

The required investment varies according to a number of parameters:

  • An existing reception garden already appropriated for its purpose as opposed to a brand new garden.
  • A garden supplying only location, as opposed to a garden with a kitchen and other services.
  • Year round operation as opposed to summer operation only.
  • Capacity.
  • Luxury and prestige level.

Due to the complexity of the investment and the array of possibilities, an expert should be consulted prior to making the investment.

 

Industry revenue and profitability

Revenue at a reception garden is the result of operation method-

  • When the reception garden is operating as a full service facility, revenue is calculated according to price per plate, and multiplied by the number of plates. Plate price may range between $37 at low cost gardens and up to $60 per plate at higher-level gardens.
  • When the garden is rented out price is fixed, according to garden size, location, and demand. Additional parameters affecting revenue are seasonality and requested supplemental services such as flower arrangement and lighting. Material expenses are estimated at 28-33% of revenue.

 

 

Risk Level:

The high investment and competitiveness in the industry put this industry at a higher than average risk level therefore, a very meticulous business plan should be prepared in advance in order to prevent failure.

 

Licenses and Certifications:

The licensing process is long and complicated. Licenses required are a permit from local authorities, subjective to Ministry of Health and police department approval. If the land is agricultural, approval of Israel land administration is required in order to modify land’s purpose or approval for deviational use.

 

Insurances:

Business insurance (for content and inventory), third party insurance, employer’s liability insurance, loss of income insurance, and food poisoning insurance. In addition to the above, an insurance agent should be consulted in regards to the need for additional insurance.

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