Download Luxury Boat Charter Company

Luxury Boat Charter Company
Contents
1. Introduction
2
1.1 Nature and Scope of Planned Activities and Operation
2
1.2 Profile
3
1.3 The Boat
4
2. Strategic Marketing Plan
5
2.1 Introduction
5
2.2 Market Research
6
2.3 Target Markets
6
2.4 The Marketing Mix: ‘4P’s of Marketing’
8
2.5 Marketing Strategies and Budget
10
3 Financial Feasibility
11
3.1 Overview
11
3.2 Financial Summary
11
3.3 Income and Expenditure Statement
12
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Luxury Boat Charter Company
1. Introduction
1.1 Nature and Scope of Planned Activities and Operation
The luxury cruise and safari market has seen a large growth in Maldives. More than 90 vessels are registered as Safari
boats in Maldives. Most these boats concentrate on the scuba diving clientele. A great many of the vessels do not have airconditioning and are very old and not well attended to. Many of the resorts are high end but do not always provide the level
of privacy that a client might need and expect. Most of the Safari boats rely on third party marketing strategies such as tour
operators. The rental rates are usually for 3-days or more and are exorbitantly high for a meager amount of comfort. There
are very few truly luxury boats in the market that offer top-notch service.
To cater to the demand for luxury high-end private vacations in Maldives we would like to develop a new safari company
starting with one boat. To reduce the dependency on one avenue of client acquisition we will not only use the traditional
avenue of the tour operator but also rely on our own marketing expertise.
Leveraging surf clubs, dive clubs as well as exclusive yacht clubs as marketing venues we will acquire a wider range of
clientele. By offering jet skiing, water skiing and other water sports we provide a greater range of activities than any other
safari boat on the market.
As the proposed project is based on a well-proven model, we will differentiate ourselves by creative marketing methods as
well as superior service. Our aim is to find a formula that is effective and efficient in the Maldivian context.
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Luxury Boat Charter Company
1.2 Profile
Introduction
Having started and run many companies the founders of LussoYachts Private Limited have the experience to tackle any
market. With advisors from international shipping companies such as Osman Shipping in Dubai, Indian Ocean Charters
in Maldives, Deep Blue Divers in Maldives, Asenyo Inc. a marketing firm in California and many other companies this
venture has no lack of expertise.
Widhadh Waheed
As CEO of Asenyo Inc. Widhadh has worked with companies such as Yahoo! Inc. (Yahoo Travel is the 5th largest travel
website in the US), NBC, CostPlus World Market, Photobucket, Hearst and more including another of the top 10 largest
travel companies in the United States. Widhadh has direct connections to the CEO of Arzoo.com to capture the Indian
market. She has also helped build one of the top 20 social networks in the United States (per comScore, May, 2009)
with 5.5 million visitors a month currently.
Jeffrey Salim Waheed
As a graduate of Stanford University Jeffrey has worked with NGO's, in the political arena, and has connections to the
best high-end hotels in Nepal. He was on the board of directors of Actually Marketing Inc a California based marketing
company. Jeffrey also has connections to many potential clients.
In the pursuit of creating and running a luxury Safari yacht, LussoYachts will maintain a strong commitment to
providing exceptional service and experiences..
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Luxury Boat Charter Company
1.3 The Boat
Lusso1
The Lusso1 is a 11-year-old Fairline Squadron 65. It is in tiptop shape for it's size and has been inspected by our
mechanic.
Cabins: 4
1 Master Suite
1 VIP Suite
1 Cabin with two twins
1 Cabin with two twin bunks
Heads: 3
Fully Stocked Kitchen with Dishwasher
3 Dining Areas
1 Sitting Room
Air-conditioned
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Luxury Boat Charter Company
2 Strategic Marketing Plan
2.1 Introduction
The following marketing plan is researched and developed for the sole purpose of marketing the luxury safari boat.
There are three main avenues for marketing the luxury safari. We will evaluate the best approach to penetrate to the
existing market. We have concluded that the best way to enter the market is through a small luxury charter. To this
effect we have identified a 4-cabin luxury yacht in Dubai at a very reasonable offer. Fairline Squadron 65 is a great
long lasting boat with a very good Man engine whose spare parts are readily available in Maldives.
The following sections in this marketing plan aim to address all the marketing issues in order to make the company a
success. The strategy starts with research, analyzing what the market has, needs and is looking for, and then this
section continues to identify the exact market for this type of boat following the 4 P’s of marketing, the product, the
price, the promotion and the place of operation. Finally this summary plan outlines the strategy to be used for the
luxury boat and the budget it requires to promote the charter to the targeted market.
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Luxury Boat Charter Company
2.2 Market Research
The following section highlights the research and analysis made in order to study the market, the potential penetration
as well as expansion to the target market. It is highly important that the market is studied before investments are
made in order to minimise risk of market failure and to avoid competitive disadvantages.
Current Safari Offerings
2002
2003
2004
2005
2006
2007
2008
1,475
1,636
1,676
1,789
1,599
1,923
2,094
96
113
113
121
116
133
143
Registered Bed Capacity
Safari
Vessels
No. of Vessels
Safari
Vessels
Of these only a small percentage cater to the luxury safari market. None of the boats offer a wide range of water
sports activities. Marketing budgets are low or non-existent due to the heavy reliance on tour operators. The first 5
months of 2007 the live aboard occupancy rate was 70% according to MTPB.
2.3 Target Markets
In order to market the luxury boat, it is firstly important to identify and analyze existing target markets and potential new
target markets and niche markets before entering these markets in the Maldives. The following highlights the exciting target
markets and potential new target markets and niche markets.
Existing Target Markets
The existing target markets available are as follows.
a) Clientele from tour operators
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Luxury Boat Charter Company
b) Clientele from resorts
The above markets are identified as existing established markets that can be entered fairly easily with the aid of an
appropriate and affective marketing strategy.
Potential New Target Markets and Niche Markets
Although there is a viable and growing existing market for the luxury boat the potential new market could be even more
attractive and vast. With the development of effective online systems that connect various corners of the globe these
potential markets are becoming more and more accessible.
In order to exploit these potential new international markets, considerable time and resources have to be applied in order to
establish contacts and affective networks.
The potential new markets:
a) Direct web sales through our network of sites.
b) Direct marketing to exclusive clubs around the world.
c) Web sales through a network of affiliated sites.
In order to reach the potential markets, long-term commitment and dedicated work is required.
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Luxury Boat Charter Company
2.4 The Marketing Mix: ‘4P’s of Marketing’
The 4P’s of marketing will identify and analyze four critical elements within any marketing plan. These four elements are
‘Product’, ‘Price’, ‘Promotion’, and ‘Place (Distribution)’. In order for any marketing plan to be affective and successful, (1) a
product portfolio needs to be developed, (2) a pricing policy needs to be derived, (3) a promotional strategy needs to be
formulated, and finally (3) a distribution system needs to be identified.
Product (in this case Service) Portfolio
This subsection will provide a service listing for the different products that are going to be marketed.
Service Portfolio
Luxury Yacht Packages
•
•
•
•
•
•
3 Day Cruise
5 Day Cruise
7 Day Cruise
Daily Rental
Dinner Cruise
Surf/Dive Cruise
Pricing Policy
1) The price of a service is formulated and derived based on various factors such as the nature of the service, market
demand, supply and demand trends, its various cost elements, level of competition etc which will have to be considered
while service pricing is conducted.
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Luxury Boat Charter Company
2) It must be taken into consideration that market price of some services have been highly fluctuating to the extent that it
is difficult to find a common trend. Therefore, our pricing policy will be directly linked to these fluctuations in the
markets.
3) It is also important to note the fact that in order to deal with competition and price wars, the products identified can be
priced and marketed as ‘luxury’ experience with special emphasis being placed on the concept of extraordinary service.
4) Finally this pricing policy will take into consideration that, in order to sell the identified services at competitive and
premium prices in the market today, focus has to be placed on efficient methods of operation to cut costs, reduce
overheads, and create a positive image of the service in the customers’ mind.
Promotional Strategy
The promotional strategy will be dealt mostly within the marketing strategies section. But within this section there are a few
points that need to be highlighted regarding the promotional strategy that is going to be utilized for this marketing plan.
Firstly from a promotional perspective, in order to compete affectively with local competitors, different products will be
marketed differently according its type of product and quality. We will offer water sports and well-rounded options for any
potential needs a client may have while aboard.
Secondly it is also important to always promote the underlying reason or intention behind the project and the benefits
received by the clientele.
Place
In terms of location the Safari will be run mainly in and around Male' and the southern atolls. Our divers have already
located the best locations for diving, surfing and snorkeling. We will cater our trips around the interests of our clientele.
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Luxury Boat Charter Company
2.5 Marketing Strategies and Budget
This marketing strategy is formulated to meet the strategic marketing goals that have been identified in this marketing
plan. In order to address each market and to effectively communicate and penetrate to these markets, we will be selecting
our marketing tools very carefully according to the exposure levels.
The table below shows the marketing approach we will be using for each target market. The table also details out the
budget for each of these approaches.
Market
1 Local 2 International TOTAL Marketing Approach
Marketing Tools
Billboards, F lyers, Networking, Direct Marketing, Meetings, Radio, Advertising Websites Networking, Direct Marketing, Flyers, Brochures, Advertising, Print Media, Web Websites, Affiliates, Media Tour Operators 10
Budget (USD)
500.00/month 2300.00/month 2800.00/month Luxury Boat Charter Company
3 Financial Feasibility
3.1 Overview
This section of the Business Plan covers all the financial projections and forecasts proving the viability and profitability
of the business.
The first section below summarises and provides an analysis of the feasibility of the project. The
feasibility is continued on the detailed Proforma Financial Statements, which then leads to the final section providing
the key overall assumptions of the project for the medium term.
3.2 Financial Summary
As detailed in the Proforma Financial Statements later in this section, based on the proposed costing and pricings, the
project is highly viable. Our safari venture provides a very attractive outlook for investors.
This planned business activity gives a positive Net Present Value (NPV) of USD 2,611,331 and also gives an Internal
Rate of Return (IRR) of 59%, which is a much higher return than the Cost of Capital of 13%. With the assumptions
stated below this investment will have payback period of 4 years.
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Luxury Boat Charter Company
3.3 Income and Expenditure Statement
PROJECTED PROFIT AND LOSS STATEMENT (YEARLY)
Year 1
Year 2
Year 3
Year 4
Year 5
729,900
818,415
901,710
947,250
963,315
729,900
818,415
901,710
947,250
963,315
25,963
4,327
29,252
8,126
32,243
8,956
33,847
9,402
34,508
9,586
1,442
31,938
63,670
1,625
40,062
79,065
1,791
49,637
92,627
1,880
53,974
99,104
1,917
55,648
101,659
666,230
739,350
809,083
848,146
861,656
94,527
49,489
98,726
51,687
108,820
56,972
114,234
59,806
116,465
60,974
45,038
47,039
51,849
54,428
55,491
98,039.29
85,700.00
101,322.89
87,325.60
104,811.66
88,982.83
108,519.64
90,672.31
112,461.84
92,394.68
TOTALEXPENSES
183,739.29
188,648.49
193,794.49
199,191.95
204,856.52
EBITDA
527,528.83
597,740.33
667,136.84
703,382.25
712,290.74
FINANCING EXPENSES
Bed Tax
235,684.96
10,892
235,684.96
11,376
235,684.96
12,539
235,684.96
13,163
13,420
INCOME
Room Rental Income
Gross Sales
Less:
DIRECT
EXPENSES
Guest Food Expenses
House Keeping
Expenses
Laundry Service Exp
Fuel
TOTAL DIRECT
EXPENSES
GROSS PROFIT
Add:
OTHER INCOME
Extras (Income)
Less: Extras
(Expenses)
Contribution
Less:
Overheads (Expenses)
Staff Salaries
(Expenses)
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Luxury Boat Charter Company
Corporate Tax (7.5% annually)
PROFIT & LOSS
APPROPRIATION
ACCUMULATED PROFITS
(beginning)
Add:
Less:
ACCUMULATED PROFITS
(ending)
21,071.39
Net Profit for the
Year
Dividends
Purchase price:
Loan amount:
3 year term
APR
3 month forbearance requested,
Balance at start of payment term:
Repayment amount:
Total to be repaid:
Monthly Payment:
Yearly payment
700,000
560000
13%
578200
653366
738303.58
834283.0454
942739.8413
19640.41336
235684.9603
Year 1
Year 2
Year 3
Year 4
13
26,300.96
31,418.47
34,090.09
52,415.32
259,880.48
584,259.04
971,753.49
1,392,197.90
259,880.48
324,378.57
387,494.45
420,444.41
646,455.59
259,880.48
584,259.04
971,753.49
1,392,197.90
2,038,653.48
Luxury Boat Charter Company
3.4 Assumptions
ASSUMPTIONS
Currency, USD
Year 1
Year 2
Year 3
Year 4
Year 5
High Season - Days
Shoulder Season - Days
Low Season - Days
Total No. days
131
81
153
365
131
81
153
365
131
81
153
365
131
81
153
365
131
81
153
365
High Season - Occupancy
Shoulder Season - Occupancy
Low Season - Occupancy
Average Annual Occupancy
60%
50%
40%
50%
65%
55%
48%
56%
70%
65%
52%
62%
75%
65%
55%
65%
75%
65%
58%
66%
4
8
4
8
4
8
4
8
4
8
No of Guests
High Season
Shoulder Season
Low Season
guests / year average
629
324
490
1,442
681
356
588
1,625
734
421
636
1,791
786
421
673
1,880
786
421
710
1,917
Bed tax ($ per head)
8
8
8
8
8
4500
4500
4500
4500
4500
4000
3000
4000
3000
4000
3000
4000
3000
4000
3000
No of Rooms
No of Beds
Room Rates - 4 cabin luxury charter
High Season Rate ($ per room per night)
Shoulder Season Rate ($ per room per
night)
Low Season Rate ($ per room per night)
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Luxury Boat Charter Company
Main Income
Extras (Income Per Bed Night)
Water Sports
Bar Sales
Laundry
Diving
Extras - Expenditure
Water Sports
Bar Sales
Laundry
Diving
Guest food Expenses - Full Board
($pp/day)
House Keeping Expenses - $pp/day
Laundry Services - $pp/day
Fuel Consumption and Cost
Boat, Generator, Dinghy, all fuel included
Total Fuel Expenditure - yearly
175
31,938
50
20
5
50
50
20
5
50
50
20
5
50
50
20
5
50
50
20
5
50
22%
25%
18%
35
22%
25%
18%
35
22%
25%
18%
35
22%
25%
18%
35
22%
25%
18%
35
18
3
1
18
3
1
18
3
1
18
3
1
18
3
1
196
40,062
15
218
49,637
228
53,974
231
55,648
Luxury Boat Charter Company
3.5 Bed Nights Sold
4 cabin
luxury
yacht
Year
Year
Year
Year
Year
1
2
3
4
5
Shou
lder
Seas
on
High
Seaso
n
Occup
ancy
60%
65%
70%
75%
75%
Booking revenue
Year 1
Year 2
Year 3
Year 4
Year 5
Bed
Rate
Bed
Night
s
131
131
131
131
131
4500
Income
353,700
383,175
412,650
442,125
442,125
Occu
panc
y
50%
55%
65%
65%
65%
Low Season
Bed
Rat
e
Bed
Nig
hts
81
81
81
81
81
4000
Income
162,000
178,200
210,600
210,600
210,600
Taxes
729,900.00
818,415.00
901,710.00
947,250.00
963,315.00
10,892.00
11,375.84
12,538.96
13,162.80
13,419.84
16
Bed Rate
Occupancy
40%
48%
52%
55%
58%
Bed Nights
153
153
153
153
153
3500
Income
214,200
257,040
278,460
294,525
310,590
Total
Booking
Rental
729,900.00
818,415.00
901,710.00
947,250.00
963,315.00
Luxury Boat Charter Company
3.6 Crew
Boat Crew
Nos
1
1
1
1
4
Salary Scale
Captain
Chef
Kitchen helper / Waiter
Housekeeper / Bartender
1,500
1,200
800
800
Total
Total Cost
1,500
1,200
800
800
4,300
Cost per
year
18,000
14,400
9,600
9,600
51,600
MAINTENANCE
Nos
1
1
1
3
Salary Scale
Boat Mechanic
Plumber cum Carpenter
Laborer
800
600
400
Total
GRAND TOTAL
Total Cost
800
600
400
1,800
6,100
17
Cost per
year
9,600
7,200
4,800
21,600
73,200
Luxury Boat Charter Company
3.6 Other Income
OTHER INCOME
4 cabin luxury
No of Bed Nights
Extras (Income Per Year)
Water Sports
Bar Sales
Laundry
Diving
TOTAL
Year 1
778
Income $
Year 2
813
Income $
Year 3
896
Income $
Year 4
940
Income $
Year 5
959
Income $
Cost of service
% of
Guests
50
20
5
150
60%
80%
10%
50%
23,340.00
12,448.00
389.00
58,350.00
94,527.00
24,376.80
13,000.96
406.28
60,942.00
98,726.04
26,869.20
14,330.24
447.82
67,173.00
108,820.26
28,206.00
15,043.20
470.10
70,515.00
114,234.30
28,756.80
15,336.96
479.28
71,892.00
116,465.04
% of
Income
25%
22%
18%
70%
Expenditure
$
5,835.00
2,738.56
70.02
40,845.00
49,488.58
Expenditure
$
6,094.20
2,860.21
73.13
42,659.40
51,686.94
Expenditure
$
6,717.30
3,152.65
80.61
47,021.10
56,971.66
Expenditure
$
7,051.50
3,309.50
84.62
49,360.50
59,806.12
Expenditure
$
7,189.20
3,374.13
86.27
50,324.40
60,974.00
Year 1
94,527.00
49,488.58
45,038.42
Year 2
98,726.04
51,686.94
47,039.10
Year 3
108,820.26
56,971.66
51,848.60
Year 4
114,234.30
59,806.12
54,428.18
Year 5
116,465.04
60,974.00
55,491.04
Extras Expenses
Water Sports
Bar Sales
Laundry
Diving
TOTAL
Grand Totals
Extras Income
Extras Expense
Gross Margin
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Luxury Boat Charter Company
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