Analysis of the economic viability of a rural tourism enterprise in Brazil: an application of the Monte Carlo Method

Abstract

The acquisition of projects aimed at rural tourism represents an alternative for generating income. The objective of this study was to evaluate the viability of purchasing a farm that is structured as a hostel, located in Joanópolis, interior of São Paulo, Brazil. The method was based on exploratory research based on a case study comparing the economic viability of this project. However, this viability is surrounded by uncertainties and risks. With this, the Monte Carlo method was used to analyze this probability. The data were obtained through the Department of Tourism in the city of Joanópolis from primary and secondary data. The calculations were made for work during a year drawn up in a cash flow with the monthly expenses of the hostel. From the results it was concluded that it is feasible to buy this hostel in the real and optimistic scenario and in the Monte Carlo method analyzing the project’s total NPV values