Panache Travel Group (PTG) specializes in small, escorted luxury tours for discerning clients in two locations – Salt Lake City, Utah and New York, New York. The founders and employees are experienced travelers and travel professionals who are knowledgeable, capable, and passionate about the services PTG offers.
PTG focuses on the niche luxury travel market, catering to individuals, couples, and high-net-worth affinity groups who travel for leisure at least once a year. These clients seek the finest quality activities, accommodations, and superior service. PTG differentiates itself by providing smaller, exclusive package tours that allow for personalized attention from the travel hosts. The company targets potential clients through personal contact, partnerships with sophisticated travel agencies, media outreach, special events, and an interactive website.
To increase market share and brand recognition, PTG will initially offer the luxury tour packages at slightly below market rate, resulting in low to mid-range operating profit margins. Once PTG has established a loyal clientele and increased brand recognition, the prices can be raised to the market rate, leading to higher operating profit margins.
Contents
1.1 Objectives
1. Achieve sales in Year 1, followed by increases in Year 2 and Year 3, with corresponding profitability increases.
2. Develop the Panache Travel Group brand to retain customers, maintain mind-share of Panache resellers, and increase pricing power.
3. Establish strategic alliances with service providers nationally, internationally, and with travel professionals to create additional PTG sales channels.
4. Produce high client satisfaction in the industry.
1.2 Mission
The mission of Panache Travel Group is to provide unique, luxury tours and travel experiences for discriminating clients, resulting in their satisfaction, shown by repeat bookings and favorable word-of-mouth comments. PTG aims to distinguish itself as a specialist in luxury travel, offering exceptional service and anticipating client needs and desires. An efficiently run operation, handled by smart individuals, will enable both service receivers and providers to enjoy the experience and product, and be pleased with PTG’s professional, first-class service.
1.3 Keys to Success
- Segment and target luxury travelers within the larger travel market.
Company Summary
Panache Travel Group (PTG) will be the parent company of Panache Journeys and Panache Services.
- Panache Journeys is a luxury tour company specializing in fully-arranged, small, private tours (escorted).
2.1 Company Ownership
Panache Travel Group will form as a private, Limited Liability Corporation (LLC) organized in the State of Utah by its principal founders (see below). Alternative legal corporate structures may be used once principal investors have been located and investment funding has been secured. Company stock will be apportioned as follows:
- 55% Panache Travel Group founders’ ownership:
- George Raymond 25%
- Dominque Pascal 15%
- Alica Marques 15%
2.2 Start-up Summary
The initial start-up capital requirement for Panache Travel Group will be used to:
- Purchase the assets and liabilities of Panache European Journeys and Barkley Roberts Travel.
- Finance start-up costs and payroll expenses for the first 12-months of operation:
- Legal fees related to new filings in the state of Utah.
- Expenses related to rent, office supplies, insurance, utilities, etc.
- Salaries for key managers and personnel.
- Miscellaneous costs involved in formulation and execution of strategic plan.
Initial venture capital or individual investment will be obtained by mid-Year 1.
Start-up Requirements:
– Legal: $500
– Stationery etc.: $600
– Brochures: $0
– Consultants: $0
– Insurance: $0
– Rent: $0
– Research and Development: $0
– Expensed Equipment: $0
– Other: $0
– Total Start-up Expenses: $1,100
Start-up Assets:
– Cash Required: $100,000
– Other Current Assets: $0
– Long-term Assets: $0
– Total Assets: $100,000
Total Requirements: $101,100
Start-up Funding:
– Start-up Expenses to Fund: $1,100
– Start-up Assets to Fund: $100,000
– Total Funding Required: $101,100
Assets:
– Non-cash Assets from Start-up: $0
– Cash Requirements from Start-up: $100,000
– Additional Cash Raised: $0
– Cash Balance on Starting Date: $100,000
– Total Assets: $100,000
Liabilities and Capital:
– Liabilities
– Current Borrowing: $1,100
– Long-term Liabilities: $0
– Accounts Payable (Outstanding Bills): $0
– Other Current Liabilities (interest-free): $0
– Total Liabilities: $1,100
– Capital
– Planned Investment
– Investor 1: $100,000
– Investor 2: $0
– Other: $0
– Additional Investment Requirement: $0
– Total Planned Investment: $100,000
– Loss at Start-up (Start-up Expenses): ($1,100)
– Total Capital: $98,900
Total Capital and Liabilities: $100,000
Total Funding: $101,100
Company Locations and Facilities:
Panache Travel Group has two locations:
1. Main Office: 129 Market Street, Suite 600, Salt Lake City, Utah 84103
2. East Coast Office: 150 Broadway, Suite 1200, New York, New York 10019
Services:
The mission of Panache Travel Group is to provide luxury escorted travel packages. The goal is to establish the Panache brand as synonymous with service and luxury. For the current year, Panache Journeys has planned and described twelve escorted tours. Panache Travel Group will rely on Panache Services, the World Wide Web, and the focused attention of founders and staff to make all plans and arrangements.
Service Description:
Panache Journeys provides luxury escorted travel packages. Pre-trip services include assistance with arranging airfare, trip insurance, passports, and making suggestions regarding packing. Itineraries, accommodations, food, and entertainment opportunities are communicated before the trip. Contacts are available for emergencies. Each client receives a guidebook before the journey.
Luxury hotels and dining experiences are carefully selected. Local subject experts provide their knowledge and perspective. Panache hosts accompany each journey to provide personal attention. Panache Journeys strives to meet and anticipate travel needs. Panache Services offers complementary travel services for Panache Journeys clients.
Competitive Comparison:
Panache Journeys positions itself as a luxury travel company offering small groups and a high level of service. It does not have a direct competitor in this particular niche of the luxury travel market in terms of service, group size, accommodations, and personal attention.
Sales Literature:
A full-color brochure describes Panache Journeys and includes prices and terms. Brochures will be used in direct mail campaigns and as sales promotional material. The website provides information about Panache, its hosts, journeys, and booking information.
Fulfillment:
Panache Travel Group acquires Panache European Journeys and Barkley Roberts Travel for key fulfillment and delivery. Panache European Journeys has established relationships with travel providers and has a successful history of providing tours. Barkley Roberts Travel is a full-service travel agency with a large client base.
Technology:
Panache Travel Group relies on the Computerized Reservation System (CRS) of Barkley Roberts Travel. The CRS increases communication speed and efficiency with suppliers. Panache Travel Group also utilizes computer technology and the Internet for market research, communications, data storage, and sales. Working agreements with other travel agencies enhance technological abilities.
Future Services:
Panache Travel Group plans to increase the geographical areas in which it offers tours. It may also explore other segments of the luxury travel market. The long-term goal is to establish itself as an internationally recognized provider of luxury travel.
Market Analysis Summary:
Panache Travel Group focuses its efforts on obtaining clients in the United States interested in luxury travel. The travel and tourism industry is a significant part of the U.S. economy and is expected to continue growing. The target customers of Panache Travel Group are couples and individuals with higher incomes and a desire for unique travel experiences.
Market Segmentation:
Panache Travel Group targets households with incomes over $100,000, travel agents and professionals with clients in the luxury market, corporations and nonprofit organizations interested in incentives and retreats, and internet users seeking luxury travel sites.
Market Analysis
| Market Analysis | |||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
| Potential Customers | Growth | CAGR | |||||
| USA Household Incomes Over $100K | 6% | 2,000,000 | 2,120,000 | 2,247,200 | 2,382,032 | 2,524,954 | 6.00% |
| Travel Agents & Professionals | 4% | 300,000 | 312,000 | 324,480 | 337,459 | 350,957 | 4.00% |
| Corporations, Civic Groups & Non-profit Organizations | 4% | 250,000 | 260,000 | 270,400 | 281,216 | 292,465 | 4.00% |
| Internet | 5% | 1,000,000 | 1,050,000 | 1,102,500 | 1,157,625 | 1,215,506 | 5.00% |
| Total | 5.42% | 3,550,000 | 3,742,000 | 3,944,580 | 4,158,332 | 4,383,882 | 5.42% |
4.2 Target Market Segment Strategy
Panache Travel Group, located in Salt Lake City and the New York City area, will develop relationships with satisfied clients who have traveled with PTG to encourage favorable word-of-mouth. The company will specifically target travel agents/professionals with established luxury client bases. Market identification will also be done through luxury trade shows, informational meetings, and contact with elite agency clients.
4.2.1 Market Growth
The travel industry is growing due to a healthy domestic economy and devaluation of currency in other parts of the world, making travel cheaper for U.S. residents. Leisure travel has increased every year since 1990, with luxury travel growing at an estimated 5% annually. Corporate participation in the luxury travel market, in the form of incentives and retreats, has also seen a significant increase.
4.2.2 Market Needs
Potential customers have various questions related to foreign travel. Travelers and travel professionals have valuable knowledge about destinations, accommodations, prices, and other important factors. Luxury travelers, in particular, rely heavily on travel professionals for assistance with all aspects of their trip. Panache Travel Group is confident in its ability to fulfill these needs and provide worry-free and satisfying experiences.
4.3 Service Business Analysis
The U.S. travel and tourism industry is the nation’s third-largest retail industry and is expected to be the leading industry in 2001. Revenues from travel have doubled in the last decade, with U.S. travel agencies generating over $100 billion in revenues annually.
The travel market is divided into business and leisure categories, each contributing about 45% to total revenues. The remaining 10% comes from combined business/leisure trips. Domestic and international travel further separate the market. Leisure travelers are categorized by the type of trip, income, and/or age.
Lifestyle, age, and disposable income influence travel decisions and the type of travel chosen. Luxury travelers seek to combine multiple interests with their vacation time. Panache Travel Group will focus on high-income travelers interested in special-interest, rest and relaxation, honeymoons, and sightseeing trips, targeting families, groups, and seniors.
4.3.1 Competition and Buying Patterns
There are many activities and types of travel available to people considering a luxury vacation. Potential customers have the option to spend their discretionary budget on various alternatives or invest the money they would have used for a vacation. However, for those interested in luxury vacations, Panache Services faces competition from numerous agencies.
It’s worth noting that these same agencies can also be direct sales agents of Panache Journeys. The average luxury traveler engages in one grand travel vacation every twelve months.
4.3.2 Main Competitors
While Panache Services faces competitors, the potential client market is extensive. Panache Journeys, on the other hand, has found a niche with limited direct competition. Three luxury tour companies compete directly with Panache Journeys:
1. Abercrombie & Kent: Based in Oak Brook, Illinois, it is the largest and most well-known luxury tour company globally. With over 40 years of experience, they have an established reputation and strategic alliances. However, their packages are overpriced, and their group sizes exceed the maximum of 24 people per trip offered by Panache Journeys.
4.3.3 Business Participants
The travel industry includes large national chains, small home-based businesses, and online consolidators. Associations like the American Society of Travel Agents (ASTA) and the Association of Retail Travel Agencies (ARTA) have members in the thousands. Many other agencies are also involved in the travel industry.
Strategy and Implementation Summary
To become a premier luxury tour operator and travel planner, Panache Travel Group will:
1. Establish PTG as a differentiated, specialty provider of luxury travel through diverse marketing communications targeting the PTG’s market.
Panache Travel Group’s value proposition stems from the personal knowledge and passion for travel from its founders and employees. They are confident in their ability to meet customer needs and develop long-term, trusting relationships.
5.2 Competitive Edge
Panache Travel Group’s competitive edge lies in its focus, passion, experience, and superior product with Panache Journeys. PTG offers a differentiated offering with creative management and commitment.
5.3 Sales Strategy
PTG will emphasize the benefits of its services and luxury tours. The company aims to provide clients with all arrangements and exceed their expectations. PTG believes in the value of the travel they sell and aims to satisfy both seasoned and new travelers. Sales programs will be closely correlated with marketing promotions.
5.3.1 Sales Programs
Sales programs will include awards for high-grossing sales representatives and customer service awards for employees exemplifying PTG’s commitment to clients. Sales efforts will involve on-site, telephone, online, off-site, and third-party sales.
5.3.2 Sales Forecast
Panache Travel Group expects sales to double in the first three years of operation, considering the large potential client market and Panache Journeys’ niche. Detailed projections can be found in the sales chart and table accompanying the Sales Forecast topic.
Sales Forecast
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | |||
| Journeys | $310,000 | $900,000 | $2,700,000 |
| Services | $190,000 | $600,000 | $1,800,000 |
| Total Sales | $500,000 | $1,500,000 | $4,500,000 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
| Journeys | $202,800 | $688,500 | $2,025,000 |
| Services | $144,000 | $534,000 | $1,584,000 |
| Subtotal Direct Cost of Sales | $346,800 | $1,222,500 | $3,609,000 |
Panache Travel Group adheres to the theory that the goal of business is to create and keep customers. Its marketing strategy will reflect this goal as it builds its reputation to clients throughout the United States.
5.4.1 Marketing Programs
Direct marketing methods may include:
– Advertising Specialties: Items, specifically cotton T-shirts printed with Panache Journeys & (destination), to be given to Panache Travel Group clients.
– E-Mail Mailings: Regular or infrequent mailings to lists with updated information and special offers.
– Direct Mail: Brochures, newsletters.
– Sampling: Occasionally a discounted journey may be offered as a “trade-in-kind” to a visible and vocal trend-setter who is otherwise unable to afford a Panache Journey. Clear expectations would be established for what we would receive in exchange.
Informal Marketing/Networking. Activities such as joining organizations, public speaking, or attending conferences will be explored. For example, an invitation has been extended to one of the founders of PTG for membership in the “DOM professionals,” club, a charitable organization for women engaged in the sale and promotion of passenger transportation and travel in New York City. Its membership is a valuable networking organization.
Customer-Based Marketing may include:
– Emphasizing repeat sales by clients who have taken one Panache Journey.
– Exploring add-on sales to increase the total revenue per client through the sale of extra products or services, such as additional unescorted trip planned through Panache Services which might follow a Panache Journey or a domestic trip, business or leisure.
– Add-on sales facilitated by links to our website.
– Strategic Partnerships may include cooperative advertising, distribution agreements, and bundling.
– Special Offers and Promotions may include increased commissions or limited-time-only offers to PTG representatives or travel agents for seasonal promotions.
5.4.2 Positioning Statement
Our aim is directed at individuals, corporations, civic groups, and charitable organizations who wish to participate in luxury travel and towards travel agents who want to sell the finest small group luxury tours on the market.
5.4.3 Pricing Strategy
Much of the pricing of Panache Travel Group is determined by market standards. It will attempt to maintain modest margins on Panache Services and slightly higher margins on Panache Journeys. PTG will make every effort to maintain a competitive pricing policy and keep the price of Panache Journeys slightly below the price of other luxury tours for the first three years. However, as Panache Journeys builds its reputation as a premier small group luxury tour operator, it expects to earn the ability to charge comparable rates to other luxury tour companies.
5.4.4 Promotion Strategy
The image we are promoting:
“Panache":
"from Late Latin (pinnaculum): small feather;
from Old Italian (pennachio): ornamental tuft of feathers, often on a helmet; a tassel;
from Middle French (pennache): flamboyantly or stylish confident manner.”
—Oxford English Dictionary
This is the meaning of PANACHE, and this is the message we want to promote!
We seek to project our company’s name and subtleties of its meaning to the luxury traveler!
The luxury traveler travels with Panache — therefore he/she has panache!
We aim to convey the myriad benefits the luxury client will receive by traveling with Panache!
A Panache client will have an experience evoked by these phrases:
– Top-of-the-line, top-drawer care-free leisure.
– Worry-free and problem-free, all-details-handled without hassle.
– Personally tailored, friendly expert guidance, seamless operations, attention to details.
– Pampered and “spoiled,” luxurious and permeated with stylish confidence.
– Irreplaceable memories, not astronomically priced.
Therefore, we have addressed the Five F’s a customer wants:
Function: Our service meets their concrete needs and desires.
Finances: Our prices are somewhat under market-rate.
Freedom: We make the purchase very convenient, thereby freeing the client’s time and mind.
Feelings: We provide a service that makes the clients feel pleased with themselves for their acumen in selecting such a superior product.
Future: The service creates great satisfaction. The client’s only longing is for another Journey!
The brochures are sleekly elegant. The logo printed on business cards and stationery is sophisticated and unusual: acid green and black dramatically create attention, and the elegance of the Romanesque Panache script is eye-catching. Our sales representatives and Panache hosts are experienced, knowledgeable, cosmopolitan, polished, and poised. Our website reinforces these images and messages.
How our image and services will be promoted:
During the first year, Panache Travel Group will continue a relationship begun with the Guild of Ballet West, a professional nonprofit ballet company located in Salt Lake City, in affiliation with the San Francisco Ballet Company, with a membership of 354. Two journeys will be offered as the grand prize for their annual fundraising extravaganza given by the Guild on April 28, 2001. This will create buzz and publicity for Panache Journeys, build interest for others to join the prize-winners to travel together, and give back to the community in which PTG is based.
An East-coast based promotion will be participation in the fundraising auction of educational public television station WLIW, Channel 21, based on Long Island, New York. The auction will take place June 1-3, 2001. One journey will be auctioned. We will create a 30-second spot with WLIW’s production team. The spot will be aired ten times; print acknowledgement will be made in a Newsday newspaper ad; we’ll receive promotion on WLIW’s auction website and link access to our website; and we have an on-air guest auctioneer opportunity and live interview about Panache Journeys. WLIW has a viewership in New York, New Jersey and Connecticut of more than 1.9 million households weekly, and we will be publicized before this vast audience.
PTG will continue calling on travel agencies, in person and by telephone, especially in areas identified as having high levels of income. A select, edited list has been prepared for us by a high-profile, much-loved and respected travel professional in New York City. Her stamp-of-approval, gained at the Las Vegas Luxury Travel Expo held in December 2000, has opened many doors. PTG will collaborate with upscale travel agencies in joint promotions. For example, we will co-sponsor a select mailing in Pittsburgh to high-net-worth individuals who have been identified as interested in luxury travel.
PTG will co-host a kick-off cocktail party with an important agency as they launch their new website. One hundred top local CEOs, clients of this agency, will be invited.
PTG is working with a Virginia agency and an important museum curator and lecturer to customize an itinerary emphasizing architectural aspects of European cities for interested museum members. PTG may develop an affiliation with the Great Books Program of the University of Chicago, initially in Westchester County, New York. Members have expressed an interest in having PTG tailor travel itineraries highlighting points of specific literary interest. An offer has been made to link our website with that of the Great Books program as well.
PTG will participate in national and regional trade shows. The next one on the calendar is the 2001 Alliance of Westchester Travel Agencies (AWTA) to be held in Tarrytown, New York, on April 2, 2001. It draws more than 400 owners, corporate managers, and travel agents from Westchester and Rockland counties in New York, Connecticut, and other surrounding areas.
Two nationally important trade shows held annually are the Luxury Travel Expo (LTE) in Las Vegas and the Incentive Travel Marketing Expo (ITME) in Chicago. Both are worthwhile. We will attend and exhibit.
Our website will be a very important avenue for reaching prospective clients not reached in other ways. Casually speaking, “It’s a way to put more feet on the street!” It is also an ideal location to introduce tie-in products and services. For example, if we were to believe that a particular Tumi piece of luggage was ideal, we might seek an affiliation with them and create a link on our website. Additionally, if we created a reading list, we might profitably seek a tie-in with one of the online book sellers such as Amazon.com.
Another marketing program contemplated is the publication of a chatty newsletter, perhaps distributed quarterly. Its purpose would be to increase customer contact and serve as a vehicle for exemplifying our dedicated, personal attention. We could also highlight new Journeys, interesting travel tidbits, etc., through this means.
5.5 Strategic Alliances
Strategic alliances for promotions will be developed with travel agents, corporations, civic groups, and nonprofit organizations. Some of these alliances have been established by Panache Journeys and will continue and be expanded by Panache Travel Group.
Management Summary
The initial management team depends on the founders of Panache Travel Group and the current employees of Barkley Roberts Travel. George Raymond will act as General Manager. As PTG grows, a board of directors will be formed, and additional employees will be added in support, sales, field, and marketing.
6.1 Organizational Structure
Panache Travel Group will begin operations with 4 full-time positions and employ independent contractors where necessary for sales and field operations. It will use the services of the certified public accounting firm of Terry Price & Wunderli for payroll, taxes, and accounting. The positions are as follows:
– General Manager, LC Partner and President: George Raymond
– Marketing Director, LC Partner and Vice President: Dominque Pascal
– Travel Director, LC Partner and Vice President: Alica Marques
– Office Manager and 2nd Travel Agent: Suzy Brown
6.2 Management Team
General Manager and Development Director: George Raymond, 47, B.A. History, M.A. Comparative Literature, University of California, Ph.D. Comparative Literature, University of Utah. Seven years as Adjunct Professor of French and Comparative Literature at the University of Utah. A lifelong world traveler and sophisticated bon vivant who speaks French fluently and can make himself understood in myriad other languages. Well-traveled with millions of frequent-flyer air miles flown around the world.
Marketing and Sales Director: Dominque Pascal, 48, B.S. History, English, Yale University. Twenty-five years of experience with Morgan Stanley & Co., Inc., Junior League of Westchester, and personal family offices of financiers Willam Dupont Jr., and marketing director of Deluxe World Tours. Mother of three adult sons, an accomplished cook, and an avid reader, she has lived in New York for over thirty years and led many lives.
Alica Marques, 39. Twenty years of experience in the travel business, including two years as managing partner of Barkley Roberts Travel. With extensive travel experience, she has firsthand knowledge of many locations. An expert on CRS and other travel-related computer applications, Alica has many contacts in the industry, knowledge of critical daily operations, and speaks Spanish.
Office Manager and Travel Agent: Suzy Brown, 26. Five years of experience in travel, including her work as the current office manager of Barkley Roberts Travel. Not only familiar with the CRS system, she is a wizard with TRAMS, a back-office accounting program designed specifically for the travel business.
6.3 Personnel Plan
The personnel plan of Panache Travel Group depicts anticipated headcount for the startup year. The following table provides more detailed information. PTG anticipates the need to increase personnel in the first 2-3 years but will need to significantly increase independent contractors for sales reps and tour guides, who will be paid on a commission basis.
*Positions marked with an asterisk also receive commission from sales and hosting tours. The cost of paying these commissions is built into the cost of the sale.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| President and Development Dir.* | $14,000 | $25,000 | $40,000 |
| Marketing & Advertising Dir.* | $14,000 | $20,000 | $35,000 |
| Office Manager* | $14,000 | $20,000 | $35,000 |
| Accounting | $3,500 | $9,000 | $12,000 |
| Travel Dir.* | $7,000 | $13,000 | $14,000 |
| Travel Agent | $0 | $0 | $0 |
| Sales Reps. | $0 | $0 | $0 |
| Tour Guides | $0 | $0 | $0 |
| Additional Office Support | $0 | $0 | $13,000 |
| Total People | 10 | 14 | 20 |
| Total Payroll | $ | ||
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