Opportunity Evaluation

Opportunity Evaluation

• TTG will offer low cost group travel, including air transportation, hotel accommodations, ground transportation, guided tours.

• Industry is less than 10 years old, low penetration. Lack of financial and management controls. Civil Aeronautics Board, main regulatory organization, is oriented into making travel cost affordable.

• Limited number of group operators, (10 major players) the best company reported sales of $8 million first year ($500,000 profits). In the last 18 months, new companies have opened, most specialize in certain destinations, not enough to create a price war.

• Required operating capital is high ($155,000 minimum before the first tour, adding up to $250,000 as a cushion for unexpected expenses); airlines, hotels, meals and transfers, direct mail expenses, etc, are payments that have to be made in advance, so far, securing funding capital has been difficult. No collateral to back any debt, and the developing fuel crisis made investors skeptical.

Business and Marketing Strategy

• TTG plans on selling back to back group charters to “prime groups.” This allows them to lower airfare costs, as the aircraft will be full on each trip, and have bargaining power with hotels, since rooms will be filled every week. This savings will be passed on to customers.

• The prime groups are known to be responsive to group travel, they will be approached by a salesman, brochures will be mailed, and for each reservation the group makes, the organization will receive $15. There is an unlimited amount of prime groups to target.

• Primary source of sales: direct sales (direct mailing), and 10% - 25% from marketing through travel agents

• Projections for 1st year operations are 6,861 passengers, sales of $2,766,397, profit $169,223. And