Tourism Website Services Business Plan
The Internet is changing the World. Before our eyes, the World Wide Web is systematically transforming industry after industry. To an increasing extent, a company does not exist if it is not present on the Internet.
Spanish Resources plans to exploit this trend. The tourism industry is in the early stages of being transformed by the Internet. Spanish Resources will passionately focus on the Mexican tourism segments of this industry. The company will bring Mexican resorts and tourist destinations onto the World Wide Web. By creating websites for our clients, we will establish them on the Web at a key moment in the transformation of the tourism industry.
The company will use its marketing resources to define a new niche in the Mexican tourism market. This niche focus will include website design and overall Web strategy for resort operators and other tourist destinations in Mexico. We will then define ourselves as the leader in this niche.
Spanish Resources expects revenue of $751,350 in the first year, $1,441,500 in the second year and $1,807,550 in the third year. Profits for the same time periods will increase steadily.
We expect employee headcount to grow from four to eleven over the first year and to hold steady there after. The company expects paid-in capital of $300,000 to provide more then adequate working capital for the duration of the plan.
The company will provide a turn-key solution to its clients. However, we will rely on multiple outside vendors to supply website implementation and hosting. The company will provide all other aspects of the service.
Our most important objectives are:
- Three major referenceable accounts in the first six months.
- An annual revenue of $1,441,500 in the second year.
- In the first year, at least fifteen mentions of the company in tourism industry magazines and newsletters.
Spanish Resources will remove the language and technology barriers to travel destination operators in Mexico through the use of the Internet in order to reach perspective english-speaking tourists.
We will provide a dynamic and fun work environment with stable, long-term job opportunities that will include exotic travel for some employees and incentive bonuses for all key personnel.
Spanish Resources will be incorporated in the state of Connecticut as a general corporation (Subchapter C).
The company will provide website development services to tourism destinations in Mexico. Although the company has no operating history, the founders, Carolyn and Jerry, have extensive experience in the competencies required for the company to succeed. The company will have a more than adequate amount, with $300,000 investment.
2.1 Start-up Summary
There are three features of the start-up expenses that are worth noting.
First, the research and development expense involves the founders traveling to appropriate destinations to gather first-hand information about the market and market conditions.
Second, the company is investing heavily in sales collateral because of the need to project a strong quality image from the company’s inception.
Third, the company is assuming the need for only a single base of operations.
The company will offer two basic services: creating a basic website, and creating an in-depth website.
The company’s core competencies are an understanding of cultural and linguistic issues and the infrastructure of the World Wide Web. The company intends to partner with firms that are proficient in website implementation, rather than building such an operation internally.
In order to provide a high level of service, the company will have operations in both Stamford, Connecticut and in Mexico. The Stamford operation will serve as headquarters and the point of contact for partner Web design firms. The Mexican operation will support direct sales, after sales support and account management.
3.1 Service Description
The company offers two basic categories of service.
The basic service, which is sold to small resorts and travel destination, provides a simple website. This website will typically include photographs, location and contact details for the destination. In addition, the website will be submitted to all of the Web search engines and be provided to travel- oriented websites.
The basic website is designed to inform Web users about the existence of resorts and travel destinations. This basic level of service is provided for people whose primary goal is establishing a presence on the Web. This service will cost $2,000 to $3,000 dollars.
The in-depth website is designed for large resorts. This site provides everything included in the basic website and adds more depth and interactivity. This form of website will provide more detailed description and images of the resort and its facilities.
In addition, the website will allow users to make bookings, ask for promotional literature to be mailed to them and make other requests directly of the resort operators. The in-depth website goes beyond a presence on the Web, by using the Web to establish the initial relationship with potential guests. We will make the in-depth website available to smaller resorts and other destinations if requested. This service cost $8,500.
We intend to provide ongoing services to basic and in-depth website customers that will include updates and expansions of their site, as well as brokerage for Web hosting services. We expect ongoing services to account for approximately the same dollar amounts as the initial contracts.
Fulfillment for the company relies on both internal resources and our Web designer partners. The company will establish relations with at least two Web design firms.
The company will handle the direct relationships with the clients including all linguistic and cultural issues as well as a collection of imagery, identification of key resort facilities, and a high-level design concept for the website.
The Web design firm will be responsible for converting imagery to computer form, typesetting of text, and other technical website implementation issues. For basic website work, the Web design firm will be paid from $1,000 to $1,500 and for in-depth website work, they will be paid from $3,000-$3,500 dollars.
Market Analysis Summary
The tourism market in Mexico is enormous. In 1998, according to The Bank of Mexico, 19.8 million international tourists traveled to Mexico and spent over six billion dollars.
350 major hotels and thousands of smaller travel destinations serviced these tourists. Increasingly tourists are researching and booking travel using the Internet.
There are 20 travel websites already and this number is projected to increase by 100% by the end of 2001.
The company plans to target the large resorts that don’t yet have a website and expand into the thousands of smaller destinations as the business develops.
The company will approach this market primarily through advertising. Our advertising will serve two different functions.
First, we will use testimonials from reference accounts to expose the benefits of our services to tourism operators.
Second, we will use advertising through trade publications and direct mail to establish a brand that the Mexican tourism industry will associate with high-quality professional services.
4.1 Market Segmentation
We broadly divide our market between resort hotels and other travel destinations. Within resort hotels we segment between 1, 2, 3, 4, and 5 star hotels.
Within other travel destinations we include apartments, bed and breakfast, suits, villas, condos, trailer parks, and bungalows.
Within the category of resort hotels, we define large resorts as being 4 or 5 star hotels.
We define smaller resorts as 3 or 4 star hotels. Please note this analysis counts 4 star hotels twice.
In addition, we have excluded 1 and 2 star hotels entirely. Furthermore the company believes these estimates are conservative because they exclude the major beach resort areas such as Acapulco, Puerto Vayarta, Cancun, Zihuatenejo, Ixtapa, etc.
4.2 Target Market Segment Strategy
The company’s market strategy is to focus on resort hotels and tourist travel destinations in Mexico that meet two important criteria.
First, we are targeting the segments of the market that can afford Web-based promotion.
Second, we are targeting those segments of the market that can benefit from a presence on the World Wide Web.
The company has gathered market data from the official Mexican tourism website. To be conservative, we gathered data that excludes the major beach resort areas.
Many of the major beach resorts already have websites. Although we intend to target those areas as well, for purposes of this analysis, we have left them out of the numerical totals. If they were included, these resorts would approximately double the number of large resorts. Smaller resorts and other travel destinations would also be affected, but by a smaller amount.
Although there are many more 1 and 2 star hotels then any other category, the company decided to exclude them because their segment can neither afford nor benefit from a presence on the World Wide Web.
We decided to include 4 star hotels in both large and small resort segments because we predict that 4 star operators will divide themselves between large and small service offerings.
It is also important to note that many of the 4 and 5 star hotels are controled by resort chains, where as the smaller hotels tend to be individually owned.
Furthermore, 5 star hotels often have affiliations with other travel destinations such as golf courses. Also note that the predicted 10% growth rate was estimated by the company, not by the tourism board.