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. The gap exists in high quality, reasonably-priced sightseeing trips in the nation’s capital, away from the center of the city. This indicates that a new entrant to the market could be expected.
Double Decker Tours Washington has the mission to offer safe, reliable, and enjoyable sightseeing tours to Washington, DC. The buses are double-decker buses from London. For sunny, warm, and beautiful days nine of the buses will have their tops open while three others will remain closed in case of bad weather.
Product and Services
DDTOW offers charter and sightseeing services throughout Washington, DC. We will be visiting the White House and Capitol Buildings, Supreme Court, Senate Office Buildings as well as House Office Buildings as well as Museums, Library of Congress, Adams Morgan and other locations that make up the city.
Strategy for Marketing and Sales
DDTOW will spread the message that touring with them is fun. Comcast Cable System is our first platform for promoting our message. In the Washington region, we also plan to host parties for tour association decision makers as well as media. We have a $80,000 marketing budget for pre-opening. We will spend about 1% on advertising and marketing as we make profits. To assess our strengths and weaknesses, we will distribute surveys cards.
Our main competitors in the Washington sightseeing market are:
- 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 operating for more than 25 year. 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 has over 42 vehicles and serves upwards of 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 International: Grayline International is an international company that has offices and offers tours all over the globe. Grayline operates multiple tours and contracts with local bus lines. Grayline provides Washington’s Lil Red Trolley.
- Zohery Tours. Zohery Tours runs both 15-passenger vans (and 45-passenger bus coaches) in the local area. The Zohery tours last approximately 3 hours.
The Washington Convention and Tourism Corporation recently released figures that showed 17.6 million visitors to Washington, DC spent over $10 billion and $4 billion on tourism and sightseeing activities. Even though overnight leisure travel increased dramatically while day-trip volume decreased, the good news about this was that average trip spending rose to $480 per trip per day. 36% of all trips to the city involved visiting historical places, museums (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. Many of our visitors to Washington have incomes over $75K and are married with children between the ages of 35 and 54. They also have advanced degrees. 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.
Michael Frank Coleman* will be the member manager. He is the member manager.
Experience in Washington sightseeing, including working for Tourmobile and leading walking tours. Mr. Coleman has a knack for recognizing opportunities and developing staff members to take advantage of those situations. Coleman will create a team made up of tour professionals who can oversee the operation and market our services.
Paul F. Williams* is a 30-year veteran of international and private sector business and entrepreneurial development. He will be DDTOW’s business development manager.
*Confidential and proprietary resume data has been omitted from this sample plan.
Tickets sales and boarding the buses will take places at the MCI Center located at 601 F Street NW 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. Administrative offices will be held at a small building on Third Street in Northeast Washington.
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 sales figures are based on capturing 453,000 customers out of a potential customer base of 22 million people. 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 has the potential to grow faster due to new memorials and other venues opening in Washington. DDTOW’s targeted market will demand tours during the next year. This will allow DDTOW to increase its market share. 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 profit will exceed 60% and will stay at the same level in year 2. Part of the due diligence package is the long term plan for the company. 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 to new tour operators’ regulatory and organizational obligations. However, aggressive marketing and promotion can easily make up the slow start.
Exit Plan – Long-Term Development and Exit Planning
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 aim is to be the market leader in Washington’s sightseeing and tour market.
After our service starts, we will keep a close eye on sales and profit. We will seek to expand into new markets if our service is on track by the end year two.
There is always risk when starting a new venture. The success of the project depends on the acceptance of our new tours or buses. After year one, we anticipate a lot from the established tour operators joining forces against us.
Ideally, DDTOW would like to expand into the Baltimore, Richmond, Atlanta and Miami markets over the next ten years. At that point, DDTOW will consider a buyout by a larger Sightseeing/Tour operator. We may also seek to sell to a buyer.
Funds Sought, Utilization
DDTOW is looking for financing in the amount of $800,000. This will be in the form of five-year loans. These are the areas with the most declining value of the anticipated start-up costs:
- Purchasing twelve 70-passenger London-style double-decker sightseeing buses, nine of which are open top for beautiful days and nights and three closed top for cold or inclement weather.
- Provisions of sufficient cash reserves to guarantee timely payment for operating costs of buses in the first three month.
- Costs related to recruiting, training, or paying operational crews.
The following chart shows highlights of our first three year business plan.
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 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.
- Our first year of operations saw us earn approximately $14 million in revenue. We hope to reach $20 million our third year. We also plan to expand our reach into other markets in the Baltimoreâ€“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.
- 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.
- As an element critical to achieving DDTOW’s other key objectives, to identify and develop strategic alliances through the DC Chamber of Commerce, the Greater Washington Board of Trade, the Washington Convention and Tourism Corporation and other Washington associations and tourism groups.
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.
- Intelligent, progressive, and aggressive marketing that identifies the company as a different kind of player, one that is sharper and smarter, with a higher level of professionalism and operational standard than is the norm in the Washington region. Concentration on safety, with highly trained, dedicated, and professional personnel, caring for the customer and the customer’s needs and straightforward, understandable fare pricing will form key pillars of the marketing strategy.
- 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.
Double Decker Tours of Washington, LLC has a mission to provide safe, professional, reasonably priced sightseeing services to our customers. We are aiming to fill an unmet need in Washington’s sightseeing industry. We want to take you to sights that arenâ€™t being seen, and to highlight sites that are popular with millions of tourists. We will provide the highest quality service and buses possible. 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 time we meet with them until they leave, our service will be friendly and professional.
DDTOW aims to set the standard for excellence in customer service by offering clean buses, knowledgeable and helpful driver guides, as well as outstanding customer service.