Manhattan Luxury Experiences – Business Plan
Manhattan, the most metropolitan of the five boroughs of New York City, is dotted heavily by restaurants, shops, businesses, and famous attractions like the Times Square and Central Park, the Empire State, Rockefeller Center, the Metropolitan Museum of Art and United Nations buildings (WorldWeb.Com, undated).
EXECUTIVE SUMMARY
A recreational tourism company, Manhattan Luxury Experiences, will provide a fully-customizable tour service to wealthy, high-income tourists and residents.
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New York City received 43.8 million international and domestic tourists, following a generally upward trend since 1998. Of that number, the city received around 36.54 million Americans and 7.26 million foreigners, mostly from the United Kingdom, Canada, Germany and Scandinavia. (NYC & Co., undated)
The company will be offering four-hour sightseeing tours around Manhattan. The client and his group of up to 10 guests will experience seeing New York with an experienced guide. The package will include a luxurious driven tour and a walking tour in areas of interests.
Potential Market
The target market would include high-income tourists, specially those taking their family on holidays.
The company will also be offering tours guided by guides that are fluent in either Japanese or Korean. Statistics show that NYC received more than 500,000 Japanese and Korean visitors in 2006. Both groups have low-level English proficiency and studies of two limo-tour service companies currently operating in New York, Stan's Limo and New York Fun Tours, do not cater to them.
Product
Our initial product would be a fully-customizable tour with a highly experienced and knowledgeable tour guide. The clients will be treated like royalty for the duration four-hour tour. Tours would be planned according to the client's preferences, interests, and the time of his visit.
Current Competition and Competitive Strategy
New York City Fun Tours offers a three-hour tour of the city, in a stretch limousine. The company charges $595 for the tour which can accommodate up to 10 people. The tour is also being offered in Spanish. The tour includes a chauffeur, which the company says would be a native New Yorker who would also act as the tour guide. The tour would begin in West village, running through celebrity homes, to the promenade and will end in Manhattan. (New York City Fun Tours Activity Guide).
Meanwhile, another closely-similar service, Stan's Limo, offers several theme tours like a holiday tour, kids tour. Generally, its limo tour prices range from $75 to $150 for six hours. Like New York City Fun Tours, the limo drivers are native New Yorkers who are knowledgeable about NYC. Stan's Limo, however, does not provide a set itinerary for the trip.
Manhattan Luxury Experiences will take the best of both existing services and combine it with our unique value-added service: customization. With specific emphasis on putting a premium of quality service and comprehensiveness, trip advisors would be at-hand to assist the client in selecting which places and events in Manhattan he'd like to include in his tour. Trip advisors will also be recommending attractions and places according to the client's interests and the time of the year the client makes his visits, like skating for 30 minutes at Rockefeller Center during the winter months or visiting a just opened exhibit at the Metropolitan Museum of Art.
Manhattan Luxury Experiences' existing competitors are limited to pre-packaged tours, or haphazard tours without direction.
As previously mentioned, the company will be targeting families on holiday, as well as Japanese and Korean visitors. Half a million non-English native speakers in 2006 came to New York in 2006. No tour packages catered to them. This untapped market would provide the company with an edge by offering a service that was not there before. The company would be taking customization further by providing Korean and Japanese guests with a tour guide that speaks their language.
Pricing Strategy
Aside from New York Fun Tours and Stan's Limo, most limo services in New York City do not provide a fixed rate for their services. One exception is Royal Way, which advertises a $62 per person rate for its limo services. Taking into account that NY Fun Tours charge $595 for a three-hour tour, while Stan's Limo at least $75 for a six-hour tour, the company plans to utilize a base rate of $200 dollars per hour for its tours, which would include the customized tours and the guide.
Japanese and Korean tours will be charged a premium of $100 per hour.
Promotion
Since the company is looking more at tourists visiting Manhattan, most of its initial promotion would focus on developing its Web site, which would:
- advertise the company's services,
- offer a free consultation/customization consultation with our trip advisors, along with a quote-request functionality, and
- feature testimonials from past customers.
Initial company estimates of building a fully-functional Web site (including the employment of a Web design specialist) and supplementary expenses like hosting servers and a maintenance team, is placed at $10,000.
The company would also utilize existing travel-related Web sites, like Lonely Planet and Trip Advisor, as venues for its target advertising. Initial advertising budget is around $15,000.
The company will also be creating a tie-in with hotels, creating an avenue for the company to advertise our services in their lobbies. On-site marketing materials such as flyers and brochures, or promotional merchandise such as key holders, is estimated at $10,000.
The foregoing are for the initial year. Promotional activities on the second and succeeding years will be based on the success of each promotional channel, as objectively quantified by a survey (which will be given to the clients after the tour) and internal company metrics (Web site hits, sales from the Web site, queries and bookings from hotels).
Financial Plan
Net income for the first five years has been estimated at $1,460,000 for simplicity's sake, and based on the following assumptions: the company is estimating to provide around an average of five tours daily, which would translate to an annual total of 1825 tours in a year at $800 each. This figure does not include the premiums the company has set on Japanese and Korean tours, which the company estimates to number around 50 a year, which translates to a premium revenue of $20,000.
The company's capitalization plan for its office and its fleet of 5 limousines (again based on the assumption of 5 daily tours), and subsequent maintenance and operations, would be around $600,000 for the first year and $100,000 for the next four years.
The company also plans to employ two full-time trip advisors, an office receptionist, five chauffeurs, and tour guides on-call. Salaries and other administrative expenses are budgeted at around $750,000 annually.
As previously stated, promotional and launching efforts would have an initial budget of $10,000 for the Web site project, including professional Web site creation of $6,000, Web site maintenance of $2,000 and supplementary expenses of $2,000. Launching advertising budged totals $25,000, with $15,000 going to on line advertising, while $10,000 goes to brick-and-mortar advertising.
Over the course of five years, promotional expenses are seen to decline due to the following reasons: the company will only focus on the more effective promotional channel and after the third year, the company would have build brand recognition for itself, while relying more on other forms of advertising such as word-of-mouth and peer recommendations.
References
"Manhattan New York Travel Guide" Undated. WorldWeb.Com. Retrieved on 7 December 2007. <http://www.manhattan.worldweb.com/>
New York Fun Tours Web site. Retrieved on 7 December 2007. <http://www.zerve.com/amp/activity_details.php?activity_id=541&msg=2> and <http://www.zerve.com/FunTours/viptour>
"NYC Statistics" Undated. NYC & Company. Retrieved on 7 December 2007. <http://www.nycvisit.com/content/index.cfm?pagePkey=57>
Royal Way Web site. Retrieved on 7 December 2007. <http://www.royalwaylimo.com/holiday.htm>
Stan's Limo Web site. Retrieved on 7 December 2007. ;http://www.stanslimo.com/;
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Manhattan Luxury Experiences – Business Plan. (2018, Jun 12). Retrieved from https://phdessay.com/manhattan-luxury-experiences-business-plan/
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