VoyagAir Travel Agency Adam Bailey, Zach Hayes, John Hendricks, Hung Minh Do, Matthew McKay, Jacob Rogan

The Bottom Line

We are opening a travel agency in Vietnam looking to capitalize on the growing travel market in Southeast Asia.

Where are the gaps in travel sites?

  • Travel Agents can cost less - agents have the time and knowledge to find the best deals for tickets and trips
  • Travel Agents have advanced knowledge - agents know the travel industry inside and out: they know the best places to go and when to go. This can also come in handy when they find you upgrade or perks on your trip that you couldn’t find
  • Travel Agents are convenient - to find the best deals on travel websites you often have to look around spending multiple days searching, but travel agents can do all this for you
  • Travel Agents are available - travel sites don’t offer support after the tickets are purchased but agents can help you with problems you encounter along the trip
  • Travel Agents do more - agents are not limited to certain airlines like travel sites and they also help with other trip necessities such as visas

How do we add value?

  1. We add a personalized Customer Experience - the larger travel organizations lack the personalized help that VoyagAire can offer.
  2. We offer more value for the customer’s dollar - by capitalizing on the airline miles reward system for each individual, we can give loyal customers more benefits than the competitors. For example, extended stay, discount flights, and free priority check in.
  3. We take the stress out of travel - often times, when planning a trip, it can be stressful. We will offer a full service to our customers taking away the stress of travel.
  4. A unified, smartphone app, website, and airport kiosk experience
  5. Partnering with a credit card company to offer more rewards

How do we compete with other cheap websites?

Our goal is to compete by adding value that cheap websites cannot. We might not offer the cheapest options, but we aim to provide the best option.

We are also entering a market with low competition in which travel websites are not widely used. This will give us a first-mover advantage.

Why Vietnam?

Vietnam offers a unique start-up culture, great value, a good climate, and a solid entrepreneurial environment

  1. As living standards have risen in Vietnam, people are spending more money on travel. In the past, travel typically took the form of visiting relatives at their home, or taking a company trip to the beach with one's colleagues. More recently, however, travel has become more diverse as people look to enrich their lifestyles. This trend is helping to redefine Vietnam's tourism industry.
  2. The Boston Consulting Group expects Vietnam’s middle class to double to 33 million people by 2020 and make up a third of the population of the country. (Jennings, 2016)
  3. The culture of Vietnam and the new middle class is driving them to show their status by spending big on experiences like travel. (Jennings, 2016)
  4. According to The Vietnam National Administration: The number of 10 million international tourist arrivals, up 25 percent against last year (or two million), making the highest thus far.
  5. In a report by MasterCard on travel in Southeast Asia, they found that 4.8 million Vietnamese traveled abroad, but by 2021 that will increase to 7.5 million. Travel out of other Southeast Asian countries is also rapidly increasing. (Choong & Hedrick-Wong, 2016)
  6. The Italian market for Vietnamese tourism upped 30 percent, Spain and the UK ones jumped by 27 percent and 22 percent, respectively. Russia is the Vietnamese tourism sector’s biggest European market with a growth of 27 percent.
  7. In 2017, the country’s tourism aims to lure 11.5 million international tourists and serve 66 million domestic visitors, earning 460 trillion VND (20.24 billion USD) in revenue.
  8. Vietnam will rank second in travel growth in the Asia Pacific region. (VietNamNet, 2017)

Our Business Model

Business model: 5 Components:

Revenue Model: Our revenue stream will come from adding a service charge on top of the purchase made by the consumer. The charge will come to 5-10% of each package. Packages will include anything from just a plane ticket, to a ticket, visa assistance, hotel booking, etc.

Gross Margin Model: Our travel agency will have higher profit margins to begin with because of low overhead costs involved with the business. We are starting off small with a small highly skilled staff and supplementing it with our online presence that has low overhead as well. It is hard to determine the actual gross profit margins as they can have a high range of variability (Morello, 2012). Once the business is started then more accurate gross profit margins can be determined. (talk about expenses)

Operating/Cash Flow Model: Our company will provide the consumer with a the bang-for-your-buck trips. We would give our customers the opportunity to gain travel points which will give them discount and perks on future trips. This is something that other travel agencies do not offer their customers.

Working Capital Model: The largest asset that our company holds, is the knowledge itself. We will be able to train our employees to understand the ins and outs of the rewards we will be giving our employees.

Financing Model: To start this company, it won’t take more than a laptop and a website. So initial investments won’t be too large. However, we will need to purchase and design a website, advertise, and get the word out which will be our major cost.

Mission and Vision Statements

Mission Statement: “VoyagAir is a travel service dedicated to encouraging adventurers to discover the world. By providing full service through a personal agent, VoyagAir is able to connect customers with the highest value experience for every budget.”

Vision Statement: “VoyagAir’s vision is to become the number one travel service provider in the world through excellent experiences at an affordable rate.”

Initial Locations

Our Benefits: VoyagAir is a full-service travel agency. We provide customers with a unique customized experience by informing customers of destinations that will earn them rewards that can be used to:

  • Increase stay time
  • Earn preferred boarding
  • Extra baggage
  • Hotel stays
  • Priority check in
  • Business class upgrade
American Express Credit Card: We will establish a relationship with American Express to offer credit cards and capitalize on their rewards system to help customers.

Value Canvas

(Product)

  • Benefits - Mileage points based off purchases
  • Features - Extended stay, priority check-in
  • Experiences

(Customer)

  • Wants - Cheap flights, speedy processes, personable experience, benefits from points
  • Needs - To get from point A to point B as quickly and as reasonable as possible
  • Fears - Commitment

Customers depend and make decisions based off what the product or service of a company offer.

The Main Competitors

  1. Bookit.com - With a focus on interface design, BookIt.com strives to offer travelers the most intuitive online travel services available. Their easy-to-navigate website makes booking hotels, airfare and rental cars quick and easy.
  2. Vantage Deluxe World Travel - Since it began in 1983, Vantage Deluxe World Travel has been helping travelers immerse themselves in local cultures around the world. The company prides itself on the handpicked tours and journeys it provides for their customers.
  3. CheapOAir - CheapOair is a simple-to-use vacation planner that includes search engines for hotels, flights, car rentals and package deals. The system automatically compares costs from several companies to find the very best deal.
  4. OneTravel.com - Onetravel.com is a travel website where people can search for flights, hotels, cars and vacation packages online, with many of the services offered at discounted prices. The site has featured deals within set price ranges.
  5. Global Work and Travel Co. - The Global Work & Travel Co. is one of the world's leading youth travel brands offering working holiday, volunteer, au pair, teach and internship trips, which include one-on-one coordination and 24/7 support.
  6. Priceline Group - The Priceline group is the largest travel agency worldwide. They own websites such as Priceline.com, Kayak.com, Cheapflights.com, and a handful more smaller websites. The Priceline group main source of income is through their website, Priceline.com. Which allows users to name their price and have Priceline find a trip for them.
  7. Expedia - Expedia Inc. is an internet-based travel website and has the largest market share of the travel agency market. It has acquired multiple travel sites to continue to expand it's online presence.

References:

Alvarez, A. (2017, January). Travel Agencies in the US. Retrieved March 22, 2017, from http://clients1.ibisworld.com/reports/us/industry/default.aspx?entid=1481

Choong, D., & Hedrick-Wong, Y. (2017, January 24). Mastercard Future of Outbound Travel in Asia Pacific (2016 to 2021) Report . Retrieved February 26, 2017, from http://newsroom.mastercard.com/asia-pacific/files/2017/01/Mastercard-Future-of-Outbound-Travel-Report-2016-2021-Asia-Pacific1.pdf

Jennings, R. (2016, September 06). Vietnam's Growing Middle Class Expected to Double by 2020. Retrieved February 26, 2017, from http://learningenglish.voanews.com/a/higher-priced-goods-popular-with-vietnams-middle-class/3496221.html

Meltzer, M. (2014, July 16). 10 Reasons Travel Agents Are Better Than the Internet. Retrieved March 22, 2017, from http://www.huffingtonpost.com/thrillist/10-reasons-travel-agents_b_5591994.html

Morello, R. (2012, October 27). What Are the Profit Margins on Tourism-Related Businesses? Retrieved March 22, 2017, from http://yourbusiness.azcentral.com/profit-margins-tourismrelated-businesses-10110.html

Sort Top 10 Best Rated Travel Agencies. (n.d.). Retrieved March 22, 2017, from https://www.consumeraffairs.com/travel/agencies.html

ThiThanh, B. (2014, August 8). Comparison of Vietnamese Travel Habits | Asia Insight Report | The Intelligence Provider INTAGE Inc. Retrieved March 22, 2017, from https://www.intage.co.jp/english/asia_insight/20140808#.WNKZ53P3af1

Torr, J. (2016, January 26). Vietjet Air reports 34.5% revenue increase in 2015. Retrieved February 26, 2017, from http://atwonline.com/finance-data/vietjet-air-reports-345-revenue-increase-2015

Vietnamnet. (2016, December 23). Vietnam’s tourism hits growth records in 2016. Retrieved March 22, 2017, from http://m.english.vietnamnet.vn/fms/travel/169988/vietnam-s-tourism-hits-growth-records-in-2016.html

VeitNamNet. (2017, January 12). Vietnam to rank 2nd in travel growth. Retrieved February 26, 2017, from http://m.english.vietnamnet.vn/fms/travel/171121/vietnam-to-rank-2nd-in-travel-growth.html

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