Sightseeing Bus Tours Business Plan

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The Company

Double Decker Tours of Washington, LLC, located in Washington, DC, is a young sightseeing company. The company was established to fill a need in the local sightseeing tourism market. This gap exists in high-quality, reasonably-priced sightseeing tours in the nation’s capital far from the city center. It suggests that a new company could capture a substantial portion of the existing sightseeing tour market.

Mission

Double Decker Tours Washington’s mission is provide fun, safe and reliable sightseeing tours for visitors to Washington, DC. They use double-decker buses in London style. 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 offers charter and sightseeing services throughout Washington, DC. We will tour the White House, Capitol Buildings (Supreme Court), Senate Office Buildings (House Office Buildings), Museums and Library of Congress, Adams Morgan, Catholic University, among other places that make up Washington, DC.

Marketing and Sales Strategy

DDTOW will spread the message that touring with them is fun. Comcast Cable System, Washington will be our platform to promote our message. We also host parties and events for key decision makers in tour associations and media. A $80,000 pre-opening marketing budget has been set up. As we earn, we will spend 1% of our gross revenues on marketing and advertising. We will also distribute survey cards to assess what we are doing right and identify what we are doing wrong.

Competition

We are the main competitor in Washington’s sightseeing market.

1. Tourmobile: Tourmobile’s headquarters is at East Potomac Park. The National Park Service has granted Tourmobile permission to take tourists on sightseeing tours in Arlington National Cemetary and along the National Mall. Tourmobile uses a shuttle service employing 85-passenger trams along the Mall and 120-passenger trams in Arlington. They have been in business for over 25 years. In 1969, Tourmobile began as a subsidiary to Universal Studios. It was established to provide interpretive services on the National Mall. Tourmobile, Inc., was founded by Tom Mack and became a Washington DC owned company. Tourmobile is home to over 42 vehicles, and it serves close to 2 million riders annually.
2. Historic Tours of America: HTA operates in Washington as the Old Town Trolley and DC Ducks. HTA operates in all 50 states. HTA, like Tourmobile, uses a shuttle system for its passengers and they use 35- to 60-passenger trolleys.
3. Grayline International: Grayline International, a global company with offices around the globe, is Grayline International. Grayline runs several tours and contracts its services with local bus lines. Grayline has the Washington Lil Red Trolley.
4. Zohery Tours: Zohery Tours is a local company that runs 15-passenger vans and 45-passenger coach buses. Zohery tours take approximately three hours.

Target Market

Recent Washington Convention and Tourism Corporation statistics showed that 17.6 Million people visited Washington, DC and spent over $10 Billion dollars. $4 billion of this was on sightseeing and other tourism-related activities. Although overnight leisure travel increased significantly while day-trip volume was down, the good news was that average trip expenditures increased to levels of $480 per day per trip. A lot of trips to the capital were focused on shopping and visiting historical sites and museums (36%). In leisure travel, 36% of visitors were solo travelers as compared to 80% of business travelers and 23% of leisure travelers came with children as compared to 6% of business travelers. Many of our visitors were over 75K in income, married, had no kids, and held advanced degrees. The number of foreign tourists visiting Washington fell by 19% in 2003 and 14% in 2002, respectively. However, Washington is now ranked 8th among US destinations for foreign tourists.

Management

Michael Frank Coleman* is the member manager. He is the member manager.

Extensive experience working in Washington, as well as Tourmobile and walking tours. Coleman has a natural ability to recognize opportunities and develop staff members to maximize those opportunities. Coleman will hire a team consisting of experienced professionals to run operations and market the services.

Paul F. Williams* brings over 30 years’ experience in business development, both private and international. He will serve as DDTOW’s business manager.

This sample plan excludes confidential and proprietary data.

Operations

Tickets sales and boarding of the buses will take place at the MCI Center at 601 F Street in Northwest Washington. This location provides great foot traffic right in the middle of the entertainment district. There is ample parking and access to public transport. The buses will be stored and serviced by Peter Pan Bus Service in Tuxedo, Maryland thereby reducing staff cost and insuring top notch services for our customers. Administration offices will be provided by a small office in Northeast Washington at Third Street.

Financial

Double Decker Tours of Washington, LLC, generated revenues of over 14 million dollars in its first year of operation. This includes 15 double-decker London-style tour buses, and selected routes through the city. These sales figures were based on 453,000 customers from a potential customer base that could reach 22 million. Over 500,000 customers will be served by DDTOW in its second year. Additional advertising and expanded tours are expected increase revenues to $17million. DDTOW’s plan could see a faster growth, partly due to the opening of new memorials and other venues in Washington. DDTOW&#8217’s market share will increase by more than the demand for tours in the target market. These sales numbers will lead to net profits in excess of $13million in its first operational year and $15million in its second. In year one net profits will exceed 60%. Year two will see the same. As part of the due-diligence package, the company has a long-term plan. Cash will burn in the initial few months of forming operation. See the Start-up Table later in this document to see how revenue can be started. This is due in part to the regulatory and organizational requirements of new tour operators, but aggressive marketing can make up for it.

Long-Term Development & Exit Plan

Goals

The use of double-decker busses and our tours will enable us to grow in the next five years as a major player in this region. Our goal is to create a reputation of quality, fun and safety that will make us the leader in the Washington area sightseeing/tour market.

Milestones

We will closely monitor sales and profit after our service begins. If we are on target at the end of year two, we will look to expand into a new market.

Risk Evaluation

Risk is inherent in any new venture. The success of the project depends on the acceptance of our new tours or buses. We expect to face a lot of opposition from established tour operators after year one.

Exit plan

DDTOW would prefer to expand into the Baltimore Richmond, Atlanta, Miami and Atlanta markets in the next ten years. We may look into the possibility that a larger Sightseeing/Tour operator might buy us out or sell our business to another owner.

Funds – Sought and Utilization

DDTOW is looking for financing in the amount of $800,000. This will be in the form of five-year loans. The following areas are in declining value for most of the start-up expenses:

1. 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.
2. Provisions of a sufficient cash reserve to assure timely payment of operating costs of the buses for the first three months.
3. Costs related to recruiting, training, or paying operational crews.

Marketing, advertising, public relations, including costs for setting up a website that can offer tour information, make online sales, and reserve tours, as well conventional print and broadcast advertising and public relations activities.

Administrative and legal costs involved in the creation of the company and operations.

A reserve is a fund that covers all operating costs (except bus operating costs) for the minimum three months of operation.

This chart shows the highlights of our business plan for the first three years.

1.1 Objectives

Double Decker Tours of Washington will have as it primary objectives the following elements:

• To establish and operate a new tour company aiming specifically at touring the monuments, memorials, museums, and government buildings of the capital city as well as touring the historic neighborhoods away from the city center.
• To establish an organizational marketing strategy and marketing strategy that will enable bus operators to achieve an average load of 65-85% depending on season. It will then increase to 75-100%. This will allow them to maximize their revenues and return of investment while decreasing risk.
• Our first year of operation saw revenues of approximately $14 million. By our third year, we have exceeded $20 million. Expanding into new markets within the Baltimore-Washington corridor.
• To achieve net operating profit of 60-70% within the first 12 month of tour operation and steady growth which allows rational expansion.
• The following steps will be taken to achieve the desired results: Purchase twelve double-decker buses in London-style, 70-passenger configurations for the Washington touring public. Continue expanding the fleet incrementally as the demand increases.
• To gear operations and present professionalism, serenity, and growth-oriented images from the outset. This will set up the conditions for a rational, planned expansion.
• The DC Chamber of Commerce, Greater Washington Board of Trade and other Washington tourism associations are key elements in achieving DDTOW&#8217’s other goals.

1.2 Keys to Success

In decreasing order of importance the following five key factors are crucial to Double Decker Tours’ success in Washington:

• Employing an experienced, highly professional management team that combines vision; realism; financial ability; solid knowledge of the Washington tour/sightseeing market; familiarity with, and belief in, the utilization and benefits of the latest computer informational technologies; realization of the crucial importance of an organization personnel to its success; and a total commitment to the overall mission and goals of Double Decker Tours of Washington.
• The company is known for its innovative, forward-thinking, and aggressive marketing. It is seen as an alternative player. One that is more sharp and smarter than the rest in Washington. One that has a higher standard of professionalism and operations. The marketing strategy will be based on safety. It will have highly-trained, dedicated and professional staff, care for customers and their needs, and clear, understandable pricing.
• Through careful market research, we identify routes that are not well-served in the city. This allows us to provide high load factors and profitable operations.
• Use of a fleet of London-style doubledecker buses that offer an unobstructed view of the city from the top deck and offers a high level of comfort, safety, and fuel and operational 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 was established with the mission of providing affordable, safe, and professional sightseeing services to its customers. We plan to fill a need in Washington by introducing tourists to places that aren’t currently being shown. We will operate and maintain the best fleet of buses available and we will never skimp on safety or customer service. We will continue to promote and offer fun tours

So that our customer remembers the experience they had with us and can recommend us to their friends and family. From the moment they meet us, to the moment they leave, we provide courteous and friendly 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.

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