TripHostel Company. Website dedicated to hostels. Located in London, United-Kingdom.
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1 TripHostel Company Website dedicated to hostels. Located in London, United-Kingdom.
2 Contents Executive summary TripHostel business idea and service analysis Promotion strategy Pricing strategy Distribution Marketing Environment Financial forecasts and financial requirements Appendices
3 Executive summary. TripHostel Company is a website service which permits to net surfers to find and book hostels in a precise place. The web page has several functions which will permit to customer to find a hostel very adapted to his needs. The potential customers of TripHostel are principally students and young people with no lot of money. TripHostel is scheduled for operations on 1 January 2015, and it is a limited liability company. The company's offices are located in London in United-Kingdom. The management team of TripHostel is composed of Cherrie Yeo (Public Relations Manager), Laurie Découx (Market research manager), Miguel Gonzalez (Digital Marketing Manager), and Valentina Barlow (Marketing and Promotion Manager). The aim of this business is to become international and the most famous solution for travellers looking for an affordable hostel. This business will be a success because our target market, i.e. the students are about 109 millions in the world, and in United-Kingdom and if we add regular travellers looking for hostels it still increases the number of our potential customers. In addition our website will present lot of advantages which will be studied in the next parts of this business plan. To launch TripHostel company we need about 7000, the budget will be detailed later, but this loan will be repaid very quickly thanks to many solutions that we have to get revenue. To finish with this executive summary, our objective is to receive enough financial support in order to be able to create the most efficient website service for the business.
4 TripHostel business idea and service analysis. TripHostel is a website capable to look for a hostel adapted to the desires of the customer. On the website the customer will type the name of a city, even a country or an area, he will choose his dates, and the number of travellers. He can also add some filters as prices, stars, location in the city, breakfast or no, review score etc. Then he confirms his research and results appear. The customer can choose a hostel on the list of results. There is other options on the web page, for instance you can change the currency and the language. You can also create your own account for more services as booking information, list with favourite places, recently seen hostels and reviews. When customers click on a precise hostel he can see some pictures of it, the score of it, the price, details of rooms, the different services of the hostel etc. The customer can book hostels by credit card or debit card, he just has to enter his bank details. It is a very complete website on which one you can compare and look at the different hostels, and also book hostels. In addition, the website is developed in a smartphone application which offer exactly the same functions as the web-page, but to use a smartphone is a little bit faster and easier than using a computer or a laptop. Our service is a free and intangible service.
5 Promotion strategy. Our potential customer are young people, students and regular travellers who are looking for hostels. So our promotion will have lot of impact if it is concentrated on places where they interact (Facebook and students union) and television. Absolutely every students and young people have Facebook today so it is a really good way to reach our targeted audience, in addition there is 1,35 billion of members on Facebook and it is worldwide. So promote our company on Facebook will be really efficient. On Facebook you have one part on mobile phone and one part on internet (computer, laptop). About the Facebook computer page, you have three types of adverts, you have the photo page post (a picture of 400px and a text of 500 character), the link page post (a picture of 400px on 209px and a text of 500 character), and the domain ad (a picture of100px on 72px and a text of 90 character). About the Facebook mobile application you have also a photo page post but with a photo of 618 px and a text of 110 character, and a link page post with a photo of 560px on 292 px and a text of 110 character. The budget for Facebook promotion is about 600, because it is 6 daily and there is at least 100 clicks per day so in 60 days it could give us at least 6000 new potential customers. The Student's Union is present in many famous events as Student's Fayre or International Fayre, they also use some interesting tools as wall planners. Wall planners cost 350 for a big quantity like 6000 wall planners for instance. A stall in an International Fayre is about 100 and in a Student's Fayre about 200. We also offer discounts at all of our new customers, it will be a discount of 20% on a hostel booking and free breakfast. It will appeal many new customers. To finish with this part, the television will be a good way of communication because there is about 2 television sets per household in United-Kingdom so it represents lot of customers. It costs 2000 to have an advertisement spot of 15 seconds in a local channel. We should start with a local channel before having our own revenues and then we could continue with national channels. A 15 seconds spot in local channel represents about contacts in 10 years ('contact' means how many time each person is in contact with the TV advertising campaign).
6 Pricing strategy. In this part we will deal with the pricing strategy and our way to get revenues. First concerning how will we get revenue. We have three main solutions. The first one is that we will have an agreement with some hostels companies. Why? Because we offer to our customers to book rooms in precise hostels, so we permit to these hostels to have new customers. That is why we can receive a percentage on the bookings that these hostels win thanks to us, thanks to TripHostel company. The second one, we also will earn money thanks to the advertisements that will appear on our webpage, and it can be useful advertisements, like easyjet, ryanair, blablacar etc, because like that our customers can book a hostel and just in the minute they can book a flight for instance... The third one, is to get revenue from YouTube. On YouTube, somebody post a video and then some Youtubers will see the video, when the video get one thousand of vues, YouTube give money to the person who posted the video. So we can also earn money thanks to YouTube and our videos that we will post. Concerning the fixing of prices, our company do not have to fix any prices because we just permit to our customers to compare and look at the different hostels that are offered for some precise destinations, we do not have to modify any prices, hostels companies fix the prices, not TripHostel. In addition hostels prices are so interesting that it will be not profitable for us to modify it. To give you an example of hostels prices, there is a hostel in Bloomsbury called 'Generator London' which propose a 6 beds room just for a night it is really cheap. What is our pricing method? First our service is a free service, so our website is free for the customer, the customer does not have to pay anything and it is interesting. Secondly, about hostels, we think that students and young people are prepared to pay the cheapest room as possible, so it is a really good deal to work with hostel companies. Our pricing method is actually the same as the hostel company's method which is the economy pricing method because hostels just offer a simple service, a room with no frills, a basic room, so it is very economical, and perfectly adapted to our target market. Concerning our main competitors, they are: trivago.com, booking.com and all other websites which permit to compare, to look at, and to book a night or a journey online. The fact is that every websites are free to visit, so actually there is no competition, but in term of hotel booking we are in a good position relative to competitors because hostels are the cheapest kind of accommodation that you can find on the market, indeed it is not comfortable but it is enough for students or young people.
7 Distribution strategy. If a firm wants to be successful it has to have the best product or service of the market, but if these products or services are not well distributed on the market you can be sure that his success will never be achieved. So how to distribute our service? Our distribution is a direct distribution because there is no intermediaries. Our principal channel of distribution is obviously Internet, with social networks and a smartphone application which will be available on Windows phone store. Why social networks? Because we principally target students and young people and obviously every students have Facebook, Twitter, Instagram, and YouTube. Facebook has registered 1.35 billions of users in the world, YouTube 1 billion, Twitter 284 millions, and Instagram 200 millions, it is really substantial. In addition it a free way to penetrate the market. On social networks we can post some 'status' (for Facebook), or 'tweets' (for Twitter) to show some destinations that we offer at a precise period of time or to show special offers that we propose to our customers. On YouTube we can post videos in the goal of present good destinations that we offer. On Instagram we just can put pictures, pictures about cities which offer cheap hostels for instance. Why a smartphone application? Because it is free to create is own application thanks to windowsphone and it is really efficient because everybody has a smartphone today, mostly students and young people and it is faster and easier than using a computer or a laptop. This two solutions represent the most efficient channel of distribution that we could have relative to our target market.
8 Marketing environment. This is the study of the marketing environment of TripHostel. First, what about the micro environment. Our company present any risks, because we act as intermediaries, intermediaries of hostel companies. We will ensure to keep our customers through fidelity program, it will be discounts after a precise number of bookings. Our company need a very small amount of employees, because it will be the graphic designer who will create the website, and then, we think that three employees are necessary to manage technical problems of the website and manage the call centre. In addition of the management team of course. Secondly, concerning the macro environment. There is a political stability in United-Kingdom and in Europe which is important for a company which concern the travel. There is unexploited opportunities in the technical environment (with the emergence of smartphone, tablet computer etc) With the European Union there is no movement restriction, travellers and tourists do not need visas or some certificates, just a passport or an ID. In addition thanks to this community (EU) companies of transports (flights, trains, ferries, coaches etc) offer very interesting rates across the Europe. For instance you can go from London to Paris for 30 thanks to EasyJet company... This market represent huge opportunities for our company, we are 'connected' with this companies. To finish, Erasmus and other mobility programmes grow in popularity. For instance in UK, students have been welcomed in Erasmus students are really interesting for us, because they come to the United-Kingdom and their friends and family come to visit them so they want to travel around the country, to visit their new country, and TripHostel will provide them the best service in searching for accommodation. Thirdly, what about our internal environment. The website can be run by a small amount of employees, so that is a good advantage. We have nice and homely offices located in London. It is easy to expand or downsize or company.
9 Financial forecasts and financial requirements. This is the cash flow forecast for a precise period of time: CASH FLOW FORECAST TRIPHOSTEL DURING THE MONTH OF DECEMBER Cash flow from operations Net earning 32170,5 Renewal of the website 9 Repair of technique problems 50 Telephone subscription and Internet 40 Promotion 186 Salaries 3300 Net cash from operations Cash flow from investing Premises for our business (rent) 4375 Creation of the website 3100 Cash flow from financing Monthly interest 700 NET CASH FLOW This cash flow is our first cash flow, so at this period of time the company will be just launched. Probably in the next cash flow, the net earning will be higher. The basic calculation for the net earning is: - TripHostel will receive 10% on each margin on each booking, so about 1 in a margin of 10. The average of booking per day is about So we will earn about 1000 per day, so per month. - For the advertising revenue it is about 0.10 per click, on an average of 50 clicks per day, we will earn about 5 per day, so 155 per month. - For the Youtube revenue, it is about 1 for 1000 vues, on an average of 500 vues per day, we will earn 0.50 per day, so 15.5 per month. So our net earning is per month. Now, this is our budget: Creation of the website 3200 Facebook promotion 600 Student Union promotion 650 Television promotion 2000 Total 6450 We are asking for 7000 We are planning to spend investors money in the creation of our website, and on the promotion of our company. We will see later for the salaries, and the local, when the website will be launched. We need 6450 precisely but we are asking for 7000, because it is a prevention measure, in case of emergency.
10 Appendices. THE SWOT ANALYSIS. Strengths: We have a great demographic target. We need low investment that will be repaid quickly. We do not have lot of risks because we are an intermediary of hostel companies and we do not fix any prices. Weaknesses: Time is needed to win popularity and reputation. Opportunities: To become leaders of a booming market. To expand hostel bookings. Threats: We have many competitors in term of hotel bookings, it will be difficult to compete. The main difference between us and our competitors is that we are focus on hostels and not in every kind of accommodation as Trivago.com or Booking.com are.
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