Transcript Gold Compass Travel Travel. In the right direction. Terri Fargo Jonathan Scharffenberg Sally Arizaga Ramon Perez Christian Machado.

Gold Compass Travel
Travel. In the right direction.
Terri Fargo
Jonathan Scharffenberg
Sally Arizaga
Ramon Perez
Christian Machado
Mission
Provide customers with a unique and
personalized vacation planning experience in a
manner that reflects our passion for travel and
commitment to superior customer service.
Vision
Our vision is to facilitate the creation of positive
life experiences through travel.
Concept

Luxury Vacation Planning Specialists

Customer Value Through

“Above and Beyond” Service
Customer Database
 Destination Packets
 Vacation Debriefing
 Seminars

Concept
 Convenient
Access
Store Location
 Web site
 “House Calls”

Organization and Management

General Partner and Manager


Limited Partner and Agents





Terri Fargo
Sally Arizaga
Christian Machado
Ramon Perez
Jon Scharffenberg
Augmented by Advisory Board
Industry

Industry Overview

Travel Agencies: SIC 4724 & NAICS 561510

Travel & Tourism- 3rd Largest Retail Industry

Overall Travel Expenditures $679.4 billion in 2006
Industry

Industry Characteristics & Trends




Mature and growing at 2.9%
Consolidation of Industry
Declining Commissions = Service Fees
Industry Competitors


Online (Expedia and Priceline.com)
Local Markets
Gold Compass
Travel
Zoe’s Cruises
& Tours
AAA
TravelStore
Target
Market
High income,
educated travelers
Princess
passengers
AAA Members
Business
Travelers
Operation
s
5 agents - 1
location
8 agents – 1
location
6027 agents – 1066
locations
280 agents 25 locations
Customer
Service
Customer
satisfaction
through personal
service
87% customer
referral
Members only
Awarded
“Leader in
Luxury
Travel”
Complaints:
Unprofessional
Difficult to get
information
Complaints:
Unprofessional
Problems with
travel planning
Did not resolve
customer
complaints
Market


44% Increase in Millionaire Households Since
2003
Increased Luxury Consumer Spending in 2006


3.8% of income
$56,000 estimated in 2006
During the last
12 months have
you:
Household Income
$100K+
$150K+
$200K+
Purchase any
luxury product
89%
92%
97%
Purchased any
luxury service
85%
87%
93%
Purchased
travel
57%
64%
68%
Purchased
electronics
56%
59%
66%
Purchased
fragrance/beau
ty products
43%
46%
45%
Purchase maid
service
37%
45%
63%
Target Market





Near Affluent
Affluent
Super-Affluent
Highest Mean Income:
El Dorado County &
Placer County
70000
60000
50000
40000
30000
20000
10000
0
Near Affluents
Affluents
Super-Affluents
Do
ra
do
Pl
ac
Sa
e
cr
am r
en
to
Su
tte
r
Yo
lo

Sacramento Metro Area Demographics
El

Individuals Age 30-50
College Educated
Married
Three Categories
Number of Households

County
Customer Profile

Affluent Traveler



Less likely to book online
Want convenience
Want to be “educated”
Customer Profile

Seek Experience Rather Than Material Goods


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Enjoyment & pleasure
Quality of life
 Relaxation & stress relief
 “Making memories”
6 trips per year
Almost $26,000 on travel
Sales Forecast

National Market



33,000 establishments
$59.5 billion
State Market


5,785 establishments
$7 billion
Sales Forecast

Local Market




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223 establishments
$196.4 million
.45% penetration
$900,000 in revenue
Gold Compass Travel

.15% penetration 1st year

$288,708 in revenue
Start-Up Capital

Owner Injection




General Partner - $500
Limited Partners - $7,000 each
Total = $28,500
Loans



$55,000 the 1st year
1st year only interest payments
2nd year start paying the principal on the loan
Credit Financing

$200,000 Line of Credit

Amortized over 30 years at 8.25% interest with a
balloon after 6 years
Use of Funds

Rent & Tenant Improvements



Salaries

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Tenant improvements $7,800
Rent $16,000
$80,000
Technology

$6,110
Use of Funds

Marketing


$28,565
Licenses & Certificates

$5,355
Growth Rate
12%
Gold
Compass
Travel
Growth
10%
8%
6%
4%
Industry
growth
2%
0%
0
2
4
Year
6
Revenue and Net Income
 Revenue
Year 1= $288,708

Year 2= $363,525
Year 2= $91,754
Year 3= $398,865
Year 3= $107,731
Year 4 = $430,776
Year 4 = $117,109
Year 5 = $465,238
Year 5 = $135,583
Net Income
Year 1= $18,580
Total Assets





Year 1 = $135,849
Year 2 = $253,727
Year 3 = $368,605
Year 4 = $496,774
Year 5 = $642,538
Profitability

5 Year Annual Average



Return on Investment = 80%
Gross Profit Margin = 90%
Net Profit Margin = 23%
Allocation of Profits and Losses

General Partner


Terri Fargo
 30% equity position
Limited Partners

Christian, Jon, Ramon, Sally
 17.5% equity position each = 70%
Exit Strategy


Remain in business
Alternative:

Sell at the end of year five


No less than balance sheet value of $642,538
DCF Valuation of expected cash flows
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