Room Travelers Company - Report Example

Marketing Table of Contents Table of Contents Chapter one Introduction 3 1 of the report 3 2Need for the Report3 1.3Structure of the report 4 2.1 Description of the Service 4 2.2 Description of the target group 5 Chapter three Online Market Research 5 3.1 Description of the Market 5 3.2 Market size and market growth 6 3.3 Search Term Research 7 3.4 Competition Analysis 8 3.4.1 Description of the five most Important Online Competitors 8 3.4.2 Description of the two most important offline competitors 8 3.4.3 Hidden Competition 9 Chapter four Visibility and Traffic Generation 9 4.1 Objectives for the Amount of Visitors 9 4.2 Creating Usability and Generating Traffic 10 Chapter five Usability and Conversion 10 5.1 Conversion Rate Objectives 10 5.2 Optimizing Usability 10 5.3 Creating Trust 11 5.4 Increasing Conversion Rates 11 Chapter Six: Financial plan 11 References 13 Chapter one Introduction 1.1 Subject of the report The report present an online business plan of hotel booking company website for a company called Room Traveler (RT). RT is an innovative service company that is objectively created to simplify the hustle of booking rooms in the United States. In the current years, many people including domestic and international tourists prefer digital booking that is facilitated by the online platform. The demand for online hotel booking has increased in the past decade as a result of the availability of internet services globally. The website will aim to generate comprehensive services that will provide considerable solution to the hotel and the travel industry. The report provides a comprehensive analysis of an online hotel booking website through evaluation of the online market that is facilitated by evaluation of competition analysis. Also, the report explains the applicability of the website in the market and financial plan of setting the website in the market. 1.2 Need for the Report Hotel industry and travel is one of the fragmented and competitive industry that has experience diversified trends for many years. In the United States, the hotel and the travel industry consist of more than 40,000 companies that provide hospitality to millions of people from both domestic and international regions. This industry has many competitors that compete in multiple dimensions to satisfy the market share (Li & Netessine, 2012). The competition has even become more intense and complex because of the online services that are enhanced by availability of the internet. The online platform has allowed the industry to compete with companies that are in fur proximity since people can compare appealing rates and services. The main need for the report is to evaluate competitive analysis of online hotel booking website. This will provide relevant information to consider in order to ensure the business plan for RT Company is successful. 1.3 Structure of the report The report is organized in a systematic structure that will ensure the information is delivered effectively. The structure is divided into six different chapters, each having numerous sub-sections. Chapter one provides an introduction of the report and it deliberate on the subject and need of the report. Chapter two provides the concept of the report through provision of the description of company services and the desired target group. Chapter three evaluates the online market research and is divided into different strategic section. These sections include the description of the market, evaluation of the market size and growth, explanation of the search term research used by the target group and competition analysis. Chapter four evaluates the traffic generation and visibility through evaluation of objectives of the visitors. Chapter four of the research evaluates the usability and conversion. This part explains how the website will be utilized to provide hotel booking service to the market. Chapter six is the last chapter and it evaluates financial plan of placing the website in the market and generating desired traffic. 2.1 Description of the Service Room Travelers Company (RT) will act as an intermediary between the travelers from both domestic and international market and the destined hotels. The company will act as an agent of booking our customers to the available hotels and oversee all the payment transactions. The company services will allow customers to have a convenient allocation of desired hotel facility at any destination of choice. All the transaction facilitated by our services will be done online whereby, withdrawal of payment will be done from respective customers account and send direct to the reserved hotels. The booking system will allow customers to receive an invoice with serial number from our company that display on the destined hotel on arrival. The website will also allow the customers to obtain a direct review to the hotels where their reservations have been done. The website will also illustrate links to latest promotion and discounts in order to guide our customers on the latest offers. 2.2 Description of the target group The website developed for the company will target people from domestic and international regions that travel to different vacation destination. The company major target will be young couples that have high demand of diversified destinations. The young generation will be the ideal target for the website because they rely heavily on the online platform to provide a convenient solution. The company also expects married couples and family in pursuit of vacation destination to form a significant part of the traffic in our website. Also, the business personnel are expected to form a small portion of the web site tariffs as they enhance business endeavors in regions away from their homes. Chapter three Online Market Research 3.1 Description of the Market The website for RT Company will focus in United States as the primary market. The market consists of more than 40,000 hotels that are located in different states. All this companies enhance aggressive marketing in order to present an appealing image to the potential customers. The hotels are located in diversified location with different attracting futures making them destination place for many people both in the domestic and international regions. The Hotels in the market are able to compete in respective of the proximity through relying on effective online services (Carr, 2010). The market also contains many competitors that will enact high competition for the company. There are dozens of companies that are providing similar services both in the online and offline platform. In the United States, 81.5 % of the customers in the hotel and the travel industry rely on the travel related searches to make their decisions. Also, 70% of customers visit travel and hotel booking sites in order to make reservations in their desired destination. 3.2 Market size and market growth The Company website will operate in a bigger market that has a potential from all parts of the worlds. The company market size is not restricted to United States only. Customers from all parts of the world can utilize the services of the website on the availability of the internet services. The company aims to have a tremendous growth in the first five years of the operation. This will be enhanced by provision of quality services and strategic marketing. The company expects a 15% market growth rate per year in the next five years and it is represented by the following diagram. Table 1: the five years expected growth Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Young couples 15% 600 690 794 913 1049 15% New wedded 15% 370 426 489 563 647 15% Married couples 15% 114 131 151 173 199 15% Total 15% 1,084 1,247 1,434 1,649 1,895 15% 3.3 Search Term Research There are many search terms used in the online hotel booking by the target market. The service provider in the online hotel booking is similar making it a very competitive arena in the hotel and the travel industry. The most common search engines that are used by the target group include travelinks.com, booking.com wotof.com, and tripadvisor.com. The list for the search terms is very big and it depends with the region where the company is specialized. The website will capitalize heavily on the Google Trends and Google AdWords to enhance the effectiveness of the website (Schaal, 2012). The company hopes that the AdWords enhanced by the company will facilitate quality score so as to create the desired results. The website will also facilitate direct booking trend which will have a booking engine that allow customers to track the hotel booking. The hotel booking trucking trend will allow one to know where the booking is coming from, the person reserving over a given period of time and analysis of reservation amounts. This is illustrated by the following diagram (TheBookingButton, 2011). Diagram 1: Hotel booking trucking trend 3.4 Competition Analysis 3.4.1 Description of the five most Important Online Competitors The five major online competitors, that are expected to pose high challenge to the RT Company website, include Expedia.com, Hotwire, Travelocity, Priceline and Orbitz Worldwide. Expedia is the dominating competitor in the market for the last decade with the bigger share. Expedia has more than 40% share in the online hotel booking market in United States. Priceline has taken 11% of the hotel online booking market share in the United States. Priceline is posing tremendous competition in the market through their rapid expansion in the international market. Orbitz Worldwide is another major online competitor in US with a market share of 21%. Travelocity and Hotwire also dominate a significant market and they rely heavily on the domestic customers. 3.4.2 Description of the two most important offline competitors The offline hotel booking services are enhanced through management of available rooms through receiving of booking request in other forms different from the online platform. The offline hotel booking is enhanced through registration in the offline booking menu and submitting the request through the emails. The two important offline competitors are the direct booking channel and the mail booking services. The direct booking is enhanced when an individual undertakes a manual reservation in a particular hotel. The mode is effective when enhanced by marketing strategies since it involves a face to face communication. The mail booking is done when an individual sends handwritten or electronic mail to a hotel requesting for a reservation ( Crnojevac & Gugić, 2010). This mode is considered outdated and time consuming in the current generation. The offline competition in the United States market will not pose high competition to the RT Company business plan. 3.4.3 Hidden Competition The hidden competition represents a challenge that is not directly evident, but it is enacting high pressure. The online hotel website generated by the company will face significant hidden competition from social media platform. Most of the companies in the hotel and the travel industry operate a comprehensive social media that provide a lot of information in relation to their booking and room reservation. Also, the social media provide important links that direct customers to other online competitors hence enacting challenge to the company. Examples of social media, that generate hidden competition, include Facebook and Twitter. Chapter four Visibility and Traffic Generation 4.1 Objectives for the Amount of Visitors The company website has an insightful focus on three potential target groups. The website will aim at obtaining 4300 young couples, 3950 new wedded and 1700 married couples and family in the first year. The number is expected to increase by 15% in the second year. This will reflect 4945 young couples, 4542 new wedded and 1955 married couples and family in the second year. The figures are well illustrated in the following table. Table 2: Expected Visitors Year 1 Year 2 Target Group Expected Growth Young couples 15% 4300 4945 New wedded 15% 3950 4542 Married couples &family 15% 1700 1955 Total 15% 1,084 1246.6 4.2 Creating Usability and Generating Traffic The Company website will enhance people usability and generation of traffics through utilization of the following strategies. First, the website will create an insightful focus on the long tail key search. The website will be identified by phrases and topics that deal with hotel and travel industry in order to enhance effectiveness. Second, the website will be linked to different forums that are enhanced in the hotel and travel industry. Third, the company will rely on different social media to drive a significant number of traffic to the website. Fourth, the company will promote the blog post and also join numerous blogging communities. Fifth, the company will also arrange advertising swap that will enhance marketing of the website. Sixth, the company will also utilize YouTube to enhance advertisement and demonstrate effectiveness (Price, 2014). Chapter five Usability and Conversion 5.1 Conversion Rate Objectives The conversion can be explained as the ration between the visitors of a given website and the number of visitors with meaningful action on the website. RT Company relies heavily on the website function to support all their operations, which are conducted on the online platform. The major objectives of the conversion rate of RT Company website include linking customers and the hotels, obtaining sales leads and providing desired destination to customers. 5.2 Optimizing Usability Optimization of the website usability has become a significant factor that has affected the operation of the online business. RT Company will utilize several tips in order to enhance the usability of customers. Fist, the website will be created in a simple way focusing on the real actual content. Second, the website will avoid obstacle that limit the customer to navigate to the primary content. Third, the website will have an interesting visuals that provide significant information and at the same time is enjoyed by the users. 5.3 Creating Trust Establishment of trust is a major component that will be considered in the operation of RT Company website. There are numerous methods that will be used to facilitate creation of trust. The website will use security stickers that display diversified components unwinding activities of the company. The website chooses the right payment gateway in facilitating monetary transactions. The company will also rely on the social proof from other links and social media to prove their truthfulness to the customers (Steinberg, 2014). 5.4 Increasing Conversion Rates Increment of the conversion rate will be very crucial for the RT Company website since it will create a stable foundation of high sales volume. The company will increase the conversion rate through creation of a clear value preposition that is very compelling to the users. The websites will have innovative page elements that are strategic to strengthen the value preposition. The website will also enhance the conversion rate through setting a strategic funnel of enhancing sales of our services. This will allow the company to have not only high numbers of tariffs but also sales in our services. Lastly, the website will have a crucial focus on the address objections in order to enhance the conversion rate. This will be enhanced through elimination of all possible hesitation to the customers. Chapter Six: Financial plan RT Company also expects to have a low sales volume in the first year. The sales will increase significantly in the following years. RT Company will utilize an acquisition startup cost in order to enhance generation of traffic an also facilitate increment of the conversion rate of the website. The startup cost is represented by the table presented below. Table 3: startup cost START-UP COST Start-up Expenses to Fund $23,900 Start-up Assets to Fund $3,200 Total Funding Required $32,265 $59,365 Assets   Non-cash Assets from Start-up $0 Cash Requirements from Start-up $6,670 Additional Cash Raised $7,800 Cash Balance on Starting Date $64,930 Total Assets $79,400   Liabilities and Capital   Liabilities   Current Borrowing $5,600 Long-term Liabilities $3,000 Accounts Payable (Outstanding Bills) $1,200 Other Current Liabilities (interest-free) $0 Total Liabilities $9,800 Capital   Owner $19,500 Investor $42,000 Additional Investment Requirement $8,100 Total Planned Investment $69,600 $139,200 Loss at Start-up (Start-up Expenses) $69,600 Total Capital $69,600   Total Capital and Liabilities $79,400   Total Cost $79,400 References Crnojevac, I., & Gugić, J. (2010). eTourism: A comparison of Online and Offline Bookings and the Importance of Hotel Attributes. Preliminary Communication Article, 41-54. Carr, B. (2010). How Booking Engines Increase Revenue and Capture Market Share. Retrieved from http://hotelexecutive.com/business_review/2554/how-booking-engines-increase-revenue-and-capture-market-share Li, J., & Netessine, S. (2012). Who are My Competitors? Let the Customer Decide. 1-34. Price, C. (2014, June 30). The 10 Best Ways to Generate Traffic Without Google. Retrieved from searchenginewatch.com: http://searchenginewatch.com/sew/how-to/2352408/the-10-best-ways-to-generate-traffic-without-google Schaal, D. (2012, June 4). Google launches AdWords-like Promoted Hotels. Retrieved from http://www.tnooz.com/article/google-launches-adwords-like-promoted-hotels/ Steinberg, M. (2014, September 30). Building Trust on Your Ecommerce Site. Retrieved from checkfront.com: https://www.checkfront.com/building-trust-on-your-ecommerce-site TheBookingButton. (2011). The who the what the how much. Retrieved from http://www.thebookingbutton.com/hotel-reservation-software-features/hotel-booking-engine/ Withiam , G. (2005). Brave New World: Online Hotel Distribution. Read More