New Company Business Plan Adventure International Travel Tourism Essay

New Company Business Plan happening multinational Travel Tourism Essay lay on the line supranational Travel would be a sole proprietorship company that entrust provide contingency trips and activities such(prenominal) as move, river rafting, mountain climbing, biking, etc. a ample with some other function such as lodging, car rental, airline fines and so on. The location of the company leave be in the central of California. The idea potty setting up this line of products is its naughty growth rate propeling indus set about growth rate is 4% and 10% of bet on start per class. AIT get out labor advantage of this growing sector by providing full adventure sheafs with the support of experienced staff and effective commercializeing.The estimated set up cost for AIT would be approximately $102,500, off of this persona $85,000 leave be a loan from First issue Bank and remaining testament be the personal investment. The sizeable percentage of AITs target market would be health conscious, ages in the midst of 18-34, and families with yearly stand keep in line income of $50,000 and it will maintain 10% margins on all airline tickets and 20% gross margins on other function such as lodging, car rental, etc.AIT will start with 4 full time positions (manager, marketing and advertizing director, accountant, and travel agent). It expects slow growth in offset printing 2 quarters of operation because it will be new in the market and will take time to establish. Details about market analysis, strategy, management, and financial plan ar described in this study.AIT is a travel agency that provides adventure trips and consultation to its customers with a view to make their vacation worthy. Providing adventure trips is our indigenous short letter and hence we generate profits from it.The required capital for setting-up the business would be approximately $103,000, out of which some investment would come from personal and remaining would come fro m long-term loan from First National Bank in north-west location (Edward G. Hinkelman, 2004).EXPENSES this will allow in rent of the office, consultants fees, cost of insurance, electricity, water and other utilities bills. The commodious portion of investment will go in setting-up the computer systems.LOANS a loan of $85,000 would be taken from First National Bank. (Startups, 2010).AIT will be a sole proprietorship owned business that will be located in profound California. Once the Business achieves its goal we may go for a crock upnership with other agencies to expand our Business. This probably is through with(p) after 18 months of operation.AIT has searched for 3 electric po tential locations for setting up the Business. All these locations be in the central of California and are between approximately 1200-1500 square feet of area. After achieving the goal within define time stoppage in the travel industry AIT would be among the top 30 agencies in California with cr eation of 38 million in 2010 (Allan Beaver. 2005).AIT provides travel go to both individual and group of customers. We provide special fractures to corporate clients also. We provide full travel package that includes air tickets, lodging, car on rent, rail in passage, sightseeing, etc. Our aim is to turn back differentiate ourselves as a specialist in adventure travel agency ( take a chancesportsonline, 2010).AIT will provide a spunky standard of services including air tickets and travel packages. Top of it we will provide services like accommodation and entertainment, customer satisfaction, and answerance in handling the passport. Moreover, we offer quality services with competitive rates counsellingsinging mainly on Adventure travel. in that location are two categories of Adventure travel, hard and soft adventure. twain categories involve physically active and gymnastic activities. Soft adventure activities involve less physical work and risk as compared to hard adventur e activities. frugal indicators suggest that there is a high rise in demand for adventure travel services. We finish position ourselves as a niche services provider in the field of adventure travel. AIT will deal with all the top-notch suppliers with accomplished backgrounds. If any of the suppliers failed to meet our requirements for high standards of quality we will discontinue our business with them (Ibid).The travel agency business is very highly competitive in market and the latest technology, computerized reservation systems (CRS) using the meshwork has changed the way how agencies operate. With the help of internet both agencies and clients can search for best deals in the market. Air fare brokers offer much discount on online reservations. It has resulted in price tilt. CRS can sum up the speed and efficiency of agencies to respond to customer transactions. It has also resulted in increased set-up costs for other travel agencies those neediness to be competitive. Inc reasing industry competition and the number of travel options that are available have forced smaller travel agencies to become specialist at least one of the travel types and AIT would try to establish as a specialist in adventure travel. AIT believes in establishing customer relationships for its long-term gross sales and will provide full adventure packages with needy consultation and lower prices (Trekamerica, 2010).Brochures such as travel locations, airlines, train passage, car rental companies, etc. would be obtained from the suppliers of these services and wholesale houses with whom IT would deal. On the request of customers, AIT will mail these brochures to them electronically. Also, other marketing mix activities such as direct mailing, printed advertising, pamphlets, etc. will be utilized as needed. Customers contact information can be retrieved if database is maintained by AIT (Howard S. Rowand).AIT need to establish strong relationships with the suppliers who provide travel related products and services. AIT will select two major(ip) airlines as its primary ticket providers. As per industry standard we can constrain 10% margin on ticket sales. With the help of market research we have identify working relationships with many of the service providers globally. There is an opportunity to keep margins up to 25% in profits in the location AIT has selected to start business. AIT will keep monitoring the quality of its offerings by taking the advantage of trade fairs, market publications, and other information that is related to travel industry (Travel trends, 2010).It would be expose if AIT follows the modern trend of technology in client reservations i.e. Computerized Reservation System (CRS). The CRS will help us in identifying the customers need and in retrieving the required information in fair few numbers of clicks. It will increase the speed and efficiency of communication with clients and suppliers. Also, CRS will help us in maintaining the customer database for future references. high-spirited use of internet in searching information and communication would be needed (Travel industry wire, 2010).3.6 Future ServicesWhen saturation point will sacrifice then AIT may think to open offices in other locations and may look to participate in other segments of the travel industry. AIT will keep researching for farther potential opportunities in market to expand business. The long-term goal of AIT is to achieve global position in providing top class adventure travel services at low costs. We will try to make profits by increasing the number of sales instead of increasing in prices.4.0 Market outline succinctAIT plans to provide adventure travel services in all the greater parts such as California, Arizona, Texas, Louisiana, Mississippi, Alabama, Georgia, Florida, Virginia, Pennsylvania, New York, Michigan, Indiana, Missouri, Utah, Colorado, Washington, New Jersey, Maryland, Hawaii, and North Dakota. Adventure travel is one of the sub-categories of leisure travel and further divided into soft and hard adventure travel. Travel agencies in the U.S are generating more than $50 jillion of revenue enhancement annually and out of which soft adventure travel is generating approximately $40-50 million and $12-15 million for hard adventure travel (tours to United States, 2009).4.1 Survey ConductedAIT has conducted the market survey for its customers and it has observed the following (Survey money, 2010)Out of the group of 51 individualsOccupation43 (84.3%) are students + working.10 (19.6%) are only working2.0% 1 others advance22 (43.1%) are between 18 to 2028 (54.9%) are between 21-34 of age1 (2.0%) is above 34Interested in Adventure tripAIT is surprised that due to stress in life, people are moving towards adventure trips to have some fun and relaxation in their life.49 (98%) are interested in adventure trip1 (2%) is not interested, and1 did not decide yet.Annual income of families22 (45.8%) have $50,000 of annual income11 (22.9%) have $60,000 of annual income, and15 (31.3%) have above $60,000 of annual income3 skipped the question.4.2 Market SegmentationAIT is targeting health conscious couples and individuals with average of $50,000 annual household incomes as customers. AIT will focus on people with the interest of adventure activities such as river rafting, mountain climbing and biking, skiing.The large percentage of men who were interested in taking adventure travel was between the ages of 18 to 35. But these days the number of women travelers is increasing rapidly. According to survey of women traveling together in 2008, women comprises of 49% of adventure trips. The average spending of men on adventure travels are more than women. AIT will also provide adventure packages to married couples aged between 25- 35 with children (Adventure women, 2010).4.3 Target Market Segment StrategyThe location of AIT would be in the pacific northwest of U.S because this region is rich in the nat ural salmon pink and provides outdoor activities to fitness oriented individuals. This area has people with more per capital income than any other part in the country those like to take part in such soft and hard adventure activities. These people will be the AITs target market. This area has many big companies and most of these companies organize such adventure trips for their employees as a group task and to increase group cohesion.4.4 Market TrendsOne of the notable trends in the field of travel industry is increase Deregulation. Deregulation is directly proportional to the need for differentiation of products and services that is if deregulation increases, the need for differentiation of products and services also increases and has resulted in decrease in the prices of airfare and other travel and tourism related services. Other trends include caps on commissions of travel agencies by many of the larger Airlines resulting increase in adventure travel and trim back profit margi ns. More than 147 million adult travelling populations (about 50% of adult population) of the United States have taken an adventure trip at least erstwhile in their lifetime and out of this figure 98 million have taken in the past classs. Nearly 31 million of the adult population have pursue in hard adventure activities such as river rafting, mountain biking, and scuba diving and around 25 million population is engaged in both hard and soft adventure activities in which people have high interest and participate during their adventure vacations are camping (84%), hiking (75%), skiing (52%), scuba diving (31%), sailing (25%), river rafting (24%), and mountain biking (24%). These customers are young and affluent, aged between 18 to 34 and one fourth of them have $50,000 ( 32,500) or more annual incomes (Adventure travel industry growth statistics, 2009).4.5 Market GrowthThe travel industry has a high growth rate. Reasons behind this growth are water-loving internal and internatio nal economies and the devaluation of foreign currency in other areas which has made travel cheaper for United States residents. According to the Tourism satellite accounting (TSA) world travel and tourism has generated close to $ 8 trillion of revenue in year 2008 and expected to generate approximately $ 15 trillion over the next ten years. Due to the global economic downturn it has experienced a slowdown in growth (In 2008 it was 3% in comparison to 3.9% in 2007). By looking for at the past experiences the long term forecasts believe that the growth for world travel and tourism between the period of 2009 and 2018 would be around 5% per year, bread and saveter 289 million employment and approx 11% of total global GDP by 2018 (Ibid).4.6 Market NeedsMost of the customers are unsure about the location where they wish to go for adventure trip. So travel agencies should provide better knowledge about destinations to their customers. These days customers are price conscious and look f or agencies with competitive price. epoch is also one of the precious commodities. AIT would be the solution to save time and money and insure that customers are fully satisfied with their vacation.4.7 Service Business abridgmentBefore 2000 travel and tourism industry in the U.S. was the countrys third largest retail industry and according to the department of commerce, it is now at number one. There is a 100% increase in the revenue generated from travel and tourism industry in the last decade. The U.S. travel agencies generate more than $100 billion of revenue each year. Travel industry is divided into two main categories 1. Business travel and 2.Leisure travel. Each of them contributes about 45% of the total revenue and remaining 5% of revenue comes from combined business and leisure trips. Travel market is than further divided into domestic into domestic and international travel. 70% of the revenue is generated by domestic travel. Business travel can be separated into medium t o large business trips and small independent businessman trips. The classification of leisure travel Customers is establish on the type of trip they take, budget, or age (Ibid).The four primary groups of customers under leisure travel are-Adventure lovers, special-interest groups, honeymoon couples, and sightseeing trips. inscrutable travelers with high incomes.Budget conscious travelers, andFamilies with children, group of students and seniors.4.8 Competition and Buying patternsAt present there are number of adventurous activities and types of travel such as theme parks, motor home trips, less expensive self-planned trips and cruises that are available to people to choose from and contemplate an adventure vacation, have created huge competition in the travel industry. Also, many high income people like to invest money in other financial services instead in having vacation. There are many travel agencies that are creating direct competition by providing adventure travel packages. Li festyle, age and income are three major factors that influence the decision of customer to travel and the type of travel to participate in. According to survey, on average an adventure traveler takes at least one of the adventure travel both 12-18 months (US Travel, 2009).4.9 Main competitorsRollins and Hayes They are establish on the eastern costal area and are the most famous and respected travel agency in the world that provides adventure trips. Since last 20 years they are in travel business and providing adventure packages to their customers. They are very successful in travel business. This gives them total control over the entire vacation. Rollins and Hayes have the advantage of their established reputation, strategic alliance, and experience in providing high quality trips with economies of scale. The negative intimacy about them which could be an opportunity for my business is that their packages are expensive and appeal only to rich customers with high incomes.Sundance travels It is a traditional travel agency based in Colorado and has been in the business for last 10 years. Slowly they have made the move towards adventure trips and are now well cognize for it. Their major strengths are reputation, past experiences, and financial solvency. And their major weaknesses are high personnel and management turnover and they are lacking behind in constructing better road map for future growth.Global Adventure They started travel business in 1995 in the Los Angeles area and now successfully established and well-known as adventure travel specialists. The Los Angeles is a very competitive area because of its large number of tourist attractions and other travel agencies. Global has achieved good position by dint of their highly skilled management and successful marketing communications (Ibid).4.10 Distributing a ServiceThe dispersal channel in travel industry pattern is from supplier to agent and then to customer. A conference system can be used for dis tribution between agency and suppliers. Airline reporting corporation (ARC) and International airlines travel agents networks (IATAN) are the two conferences through which agency and air travel providers communicate. The primary work of the agency is to hold the fixed number of airline ticket vouchers from the airline reporting corporation and then responsible for storing and collecting the payments for the vouchers. To keep the prices down and to attract more customers, agencies are buying airline tickets in large quantities and selling them online (Microstrategy, 2010).5.0 Strategy and Implementation SummaryAIT has planned to adopt the following strategies to achieve the goal of becoming leader in the adventure travel business in the Pacific northwest of U.S.AIT would establish its reputation by providing differentiation of products and services to its clients. This could be possible through better marketing Communication programs at AITs target market using various forms of medi a.By providing supreme services to the customers so that AIT can gain repeats Business and build trust. This can be done by providing superior services in all stages of the transaction.By promoting adventure travel as a reasoning(a), exciting, and interesting activities and by publishing photos and testimonials of customers who participate in such activities in companys newsletter, website and other advertising Medias.5.1 Competitive EdgeCompetitive edge of AIT is its dedication, interest in adventure travel, focus on building long term relationships and trust, and experienced staff. AIT will provide differentiated travel services to customers with the better utilization of Management experience, cost and commitment in maintaining quality service.5.2 Marketing StrategyThe basic goal of the AITs Business is to create and keep clients for future. The Marketing Strategy of AIT will reflect this goal in building its reputation in the Pacific North western area. Though AIT will operat e in the travel industry but it will provide much more than just an adventure trip. It will provide adventure and freedom to enjoy it. Due to busy era most of the people spend 50 weeks of a year in their office only. AIT will encourage them about the challenge, excitement, ability to do, and importance of an athletic endeavor. AIT will try to promote the benefits of having an adventure travel and theses benefits may include body fitness, ear to ear grins, personality development, excitement, and lots more (travel agent success, 2010).5.3 Promotion StrategyDuring the opening communion of AIT there will be a grand party and we will organize and sponsor many athletic related events such as 2km fun race, 5km marathon, mountain climbing and biking, etc. AIT will provide travel related packages to winners and other consolation prizes to participants. It will be easier for AIT to promote its services through interaction with people present on ceremony if all employees working with AIT w ould from the local athletic clubs background. During the opening ceremony and other fun events, AIT will give presentation on the services and trips it offers. AIT will talk terms with local health clubs and other promotional activities through these strategic alliances (saac, 2010). Specialty advertising association of California will serve marketing service to AIT because they are very famous and provide better advertising service at lower costs. AIT will also promote its services on local communicate stations. Orkut, Facebook, Twitter are also acting like an effective tool for promoting services online. AIT will create communities named as Adventure Travel Lovers on these social websites and will publish information about its travel offerings. Personal selling is also very effective promotional tool but AIT will keep it limited to safe cost on phone bills. According o IT facts, in California 96% of households have internet access, so AIT will focus more on online promotional a ctivities. AIT also planes to station sales in major public places such as shopping malls (Ibid).5.4 Distribution strategyAITs distribution strategy will focus on the direct selling in the area where it is possible to reach at minimum cost and for other areas globe Wide Web will be use to establish distribution capability. This will increase the ability of AIT to establish a national reputation.5.5 Marketing ProgramsAIT will use traditional marketing communication methods to reach its customers. Every month AIT will conduct surveys to know the taste of both soft and hard adventure lovers and their profiles such as where they live, where they work, what is their profession, etc. According to IT FACTS California, most of the travel customers purchase either over the internet or through travel agents and AIT will assist them in both ways online and in-personal. The use of internet will provide a better and an effective methods of communication with clients and suppliers. In starting A IT will focus on primary customer group and this group is defined as the number of customers who have purchased an adventure package before and who are interested in buying it. In addition to Internet, AIT will follow all those marketing tools with which customers feel comfortable such as travel magazines, direct mail, in house meetings and personal selling. Initially, AIT will start operating in the local region than within 18 or more months of operation it will extend sales into other national and global markets. It will keep informing about its season, off season offers through newsletter every month (Ibid).5.6 Positioning rumorBoth individuals and corporate clients who are interested in having the adventure travel, AIT is a solution for it because it is a premier adventure travel agency that provides full package including transport, accommodation, sightseeing, consultation, and adventure activities.5.7 Pricing StrategyAIT will decide its price according to the market standard s. As per the current market standards (10% to 16%) it will maintain margins of 10% on all travel services (it facts, 2010) and will try to keep 20% margins on remaining products and services that will depend on the set of providers. It will keep the prices low (just minimum margin 10%) as compared to other travel agencies in the region to maintain a competitive pricing policy. AIT will try to make its reputation as the best travel service provider in the region and will charge the best for services (resources. net, 2010).5.8 Sales StrategyThe main aim of the AIT is to deliver the benefits of products and services that it offers and promotes. It sells the freedom of life to customers and there are numerous benefits of this freedom such as healthy and balanced lifestyle. AIT will keep reminding its old and new customers about the importance of having the adventure trip and will hold a tag line as There is more to life than building bigger barns. AIT will provide full assistance with adventure travel and its primary concern is to provide high standard services and to make customers satisfy instead of maximizing the profits without concerning customer satisfaction. If AIT follows this, it will reduce costs and gives profit in long spring because maintaining a relationship and good will with customers is always less expensive than to develop a new one (Ibid).5.9 Sales forecastThe periodical sales forecast is projected in the table below. AIT expects that in the first quarter of operation there would be a less number of sales but it has been estimated that 3 years growth would be around 20%.5.10 Strategic AlliancesWith purpose of promotion AIT will develop strategic alliances with California family fitness centre, spectrum athletic clubs, and many others according to need of the business. Alliances with providers of adventure travel in other US. States and abroad will also be established (California family fitness, 2010).6.0 Action plan/Milestones7.0Management S ummaryHowever, AIT will start as a small business organization and will hold sole proprietorship, so employees working with it would have to share their duties and responsibilities. There would be a general manager who will be responsible for decision making. It is necessary for all employees to be capable of accepting all types of responsibilities of the business. During hiring period of employees, applicants should meet the following requirementsThey must have at least 3 years of experience in the travel industry and activities, AIT will promote.They must hold certification in certified travel counselor from a reputed institute for example Institute of certified travel agents (ICTA) (totaljobs.com, 2010).7.1 Organizational structureIn the parentage AIT will start its operation by hiring four full time positions and these positions are describes below.8.0 Financial planThe financial plan for AIT is discussed in the following sections. During first 2 quarters of operation, AIT exp ects slow growth because it will be new to market and other seasonal factors. All the estimated costs are based on the current market standards. AIT has decided to keep sufficient exchange to overcome the situation of negative cash flow, if required. There may some differences in the figure during setting up the company due to gross margins, but this will present a realistic financial plan (Travel financial help, 2010).Important AssumptionsNational growth will not affect the growth of travel industry for the next five years.The demand for adventure travel will keep growing.International situation for providers and suppliers of services would remain positive.All calculations are carried out in Dollar ($).8.1 Key financial indicatorsAIT has developed a chart which is shown below and describes major financial indicators for the first 3 consecutive years of operation. The U.S. economy has recovered lot from recession that will support the positive growth in adventure travel business.8 .2 Break Even AnalysisAIT has decided to keep 20% gross margins and accordingly break even analysis is carried out. The table below describes the BEA, including monthly sales BE points (Ibid).8.3 project profit and lossAIT will try to improve its operation progress in the third quarter of the 1st year after establishing itself in the market. It will improve gross margins from 22% in 2nd year and 23% in 3rd year. The below graph shows estimated annual profit and loss details.8.4 Projected cash flowBoth monthly and yearly estimated cash flow is projected in the below graph. Yearly cash flow is calculated by taking 60 day collection period. AIT has considered positive cash flow during the mid of the first year of operation (Ibid).8.5 Projected Balance sheetEstimated balance sheet is shown below.8.6 Business ratios-Below are the AITs Business ratios, estimated based on Standard Industry Classification (SIC) index code 4724.- appendix