The Company
Double Decker Tours of Washington, LLC (DDTOW), located in the city of Washington, DC is a new sightseeing company in its formative stages. The organization was formed to address a niche in the local sightseeing tour industry. The gap exists for high-quality and affordable sightseeing tours in the nation’s capital away the city center. A new entrant could capture a significant part of the current sightseeing market.
The Company’#8217s Mission
Double Decker Tours Washington is a London-style double-decker bus company whose mission it is to provide fun, safe, and reliable sightseeing tours to Washington, DC. Nine of the buses will be open top for sunny warm and beautiful days and three will be closed for cold and inclement weather.
Product and Services
DDTOW will offer charter services and daily sightseeing tours in Washington, DC. We will visit the White House, Capitol Building and Supreme Court, Senate Office Buildings, House Office Buildings and Museums, Library of Congress, Adams Morgan, Catholic University, and other important sites in the city.
Sales and Marketing Strategy
DDTOW will develop a message that touring with us is fun and we will project that message over the airwaves and in print. Comcast Cable System will be used to launch our message in Washington. We will also host parties for select tour association decision-makers and media. We plan a pre-opening marketing budget of $80,000. As we earn, we will spend 1% of our gross revenues on marketing and advertising. We will also distribute survey card to evaluate what is working well and what is not.
The Competition
The following are our main competitors on the Washington sightseeing market:
- Tourmobile: Tourmobile, which is located in East Potomac Park, is authorized by National Park Service for sightseeing tours on the National Mall and Arlington National Cemetary. Tourmobile employs a shuttle service with 85-passenger trams that run along the Mall, and 120-passenger buses that run in Arlington. They have been around for over 25-years. Tourmobile was founded as a Universal Studios affiliate in 1969 to provide interpretive service along the National Mall. Tourmobile, Inc., which was owned by Tom Mack, became a Washington DC company in 1981. Tourmobile employs over 42 employees and serves approximately 2 million riders annually.
- Historic Tours of America: HTA operates in Washington as the Old Town Trolley and DC Ducks. HTA is a national company with outlets across the country. HTA uses a shuttle system like Tourmobile for its passengers. They use 35- to 60%-passenger trolleys.
- Grayline: Grayline International is a global company with offices and tours around the world. Grayline operates multiple tours and contracts with local bus lines. Grayline has the Washington Lil Red Trolley.
- Zohery Tours. Zohery Tours runs both 15-passenger vans (and 45-passenger bus coaches) in the local area. Zohery tours take approximately three hours.
Target Market
According to recent Washington Convention and Tourism Corporation figures it was revealed that 17.6 millions people visited Washington DC and spent more than $10 billion. Four billion of those dollars were spent on sightseeing and related activities. Despite the fact that overnight leisure travel has increased while day-trip volumes have fallen, the good news is that average trip expenses rose to $480 per day. The majority of trips to the city were focused on visiting museums and historical sites (36%), and shopping (24%). As a result, 36% were solo travelers, compared to 88% of business travelers. 23% of leisure travellers came with their children, as opposed to 6% in business travel. Also many of our visitors to the city have income of over $75K, were married, had no children, were in the 35-54 age group, and had an advanced degree. While foreign tourists visited Washington by 19% and 14% respectively, they ranked it 8th out of the top 10 destinations in America by foreign visitors.
Management
Michael Frank Coleman* will act as member manager. He is now the member manager.
Extensive experience working in Washington, as well as Tourmobile and walking tours. Coleman has a gift for recognizing opportunities, and developing staff members to make the most of them. Coleman will hire a team consisting of experienced professionals to run operations and market the services.
Paul F. Williams*, a business development manager for DDTOW, has more than 30 years of experience in international and privately-owned business development.
*This sample plan has not included confidential and proprietary resume data.
Operations
Tickets sales and boarding of buses will be done at the MCI Center at 601 F Street. This location allows for great foot traffic and provides ample parking. Peter Pan Bus Service of Tuxedo in Maryland will store and service our buses. This will help reduce staff costs as well as ensure that we provide top-notch services to our customers. A small office located on Third Street in Northeast Washington will serve as administrative offices.
Financial
Our research and projections indicate that the demand for sightseeing tours in and around Washington is sufficient to provide Double Decker Tours of Washington, LLC with revenues of over $14 million dollars in its first full year of operations, utilizing 15 used London-style double-decker tour buses and selected routes throughout the city. These figures assume that 453,000 of the potential 22 million customers will be contacted. Revenues are expected to rise to $17 million in the second year, with more advertising and expanded tours serving over 500,000 clients. The DDTOW plan has the potential for a more rapid growth due in part to new memorial and other venues that are opening in Washington in the near future. DDTOW’s targeted market will demand tours during the next year. This will allow DDTOW to increase its market share. These sales levels will yield net profits totalling $13 million in DDTOW’s first operational year, and $15 millions in year 2. In year one net profits will exceed 60%. Year two will see the same. Part of the due diligence package is the long term plan for the company. The initial months of formative operation are costly. (See the Start-up table at the end of this document) Revenue will not be possible until then. This is due to new tour operators’ regulatory and organizational obligations. However, aggressive marketing and promotion can easily make up the slow start.
Long Term Development & Exit Strategy
Goals
Along with double-decker buses that travel new routes within the city, our tours will help us grow to become a major player over the next five year. We aim to build a reputation for quality, safety and fun that will allow us to be the best in the Washington sightseeing/tour industry.
Milestones
After our service starts, we will keep a close eye on sales and profit. We will continue to look for new markets, if we achieve our goals by year two.
Risk Evaluation
With any new venture, there is risk involved. The success of our project hinges on the strength of acceptance of our new tours and buses. After year 1, we expect that there will be a lot more competition from established tour operators who are willing to work with us.
Plan
DDTOW would love to expand its reach into the Baltimore and Richmond markets, Atlanta, Miami, and Atlanta over the next ten-years. At that time, we will entertain the possibility of a buy-out by a larger Sightseeing/Tour operator or seek to sell to a new owner.
Funds Sought and Utilization
DDTOW seeks financing in the form a 5-year loan of $800,000. The majority of the startup costs will be attributed to the following areas, with a declining value:
- You can purchase twelve double-decker London-style, 70-passenger sightseeing buses. Nine of the open-top sightseeing buses are for sunny days or nights. Three of them are for cold weather.
- Provisions of sufficient cash reserves for timely payment of operating costs for the busses during the first three-months.
- Costs of recruiting, training, as well as paying operational crews.
The following chart shows highlights of our first three year business plan.
1.1 Objectives
Double Decker Tours Washington will be focusing on the following elements as its primary goals:
- To create and manage a tour company that will focus on touring the monuments, museums, and government buildings in the capital city, as well the historic neighborhoods beyond the city.
- To develop an organizational and marketing plan that will achieve a load per bus of 65 to 85 percent depending on season. Then, increase it to 75 percent-100 percent. This will maximize revenue and return-on-investment while reducing risks.
- To achieve revenues of about $14 million by our first full year of tour operations, exceeding $20 million by our third year. Expanding into new markets within the Baltimore-Washington corridor.
- To realize net operating profits between 60-70% within the first twelve months of tour operations, and steady growth that allows for rational expansion.
- To achieve the following goals, we started with twelve 70-passenger London doubledecker buses that were purchased for use in Washington. We then gradually increased the number of buses as more people need them.
- To gear operations, and present a professional, serious, growth-oriented image from the outset, that will set the stage for a reasoned, planned expansion, mirroring growth rates projected for the first years of operations.
- The DC Chamber of Commerce, Greater Washington Board of Trade and other Washington tourism associations are key elements in achieving DDTOWՉ۪s other goals.
Success keys 1.2
These are the five keys to success for Double Decker Tours Washington, in decreasing order of importance:
- A highly skilled, professional management team is employed that combines vision, realism, financial ability, solid knowledge of Washington’s tour/sightseeing markets; familiarity with and belief in the benefits of computer information technologies; recognition of the critical importance of staff to an organization’s success; and total commitment to the overall mission of Double Decker Tours.
- Innovative, progressive and aggressive marketing that positions the company as a different kind player. One that is sharper and cleverer than others in the region, with a higher degree of professionalism and an operational standard than the norm in Washington. The key pillars in the marketing strategy are safety. Highly trained, dedicated and professional personnel will ensure that the company is safe.
- Identification, through careful market research, of unserved or under-served routes in the city that may be of interest to our customers and enable high load factors and profitable operations.
- A fleet of doubledecker buses in London style that offers unobstructed views of the city from the top deck. It also provides high levels of comfort, safety and fuel efficiency.
- Use of information technology to reduce staffing and other operational cost; expand the potential market base; readily capture sales opportunities; and enhance customer convenience and satisfaction.
1.3 Mission
Double Decker Tours of Washington, LLC is dedicated to providing safe, professional, and reasonably priced sightseeing services for our customers. We are aiming to fill an unmet need in Washington’s sightseeing industry. We want to take you to sights that aren’t being seen, and to highlight sites that are popular with millions of tourists. We will maintain and operate the most modern buses and provide excellent customer service. We will always promote and have fun tours
so that when the customer leaves us, they will remember the good time they had and recommend us to a friend or relative. From the moment we meet until the time they leave, we will offer friendly and courteous service.
DDTOW is committed to leading the way in customer service and will continue to be a leader among other companies by providing clean buses and friendly, informative, and helpful driver guides.
