2. Market Analysis
2.4 Industry Current Participants in City Tours
2.4.1 Participants Distribution Patterns
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The well-established travel agencies or tour operators have international partnerships all around the world, and so focus their business in arranging tours for big groups of tourists before they come to Taiwan. They also offer city tours to those independent tourists, international or local, that come to the city without pre-arranged groups. The smaller travel agencies have fewer international partnerships but work in a similar way as their bigger counterparts.
The local taxi companies offer arranged city tours inside Taipei or to nearby places. They don't have international presence or information in the Web, the city tours are an extra service they offer besides the normal transportation service.
2.4.1. Participants Distribution Patterns
Tourists usually purchase city tours on a word-of-mouth basis, previous experience or brand recognition regardless of where they buy them. There are some key players that influence the buying decision: family, friends and coworkers, hotel’s concierges, travel guides, travel blogs, social media and travel web pages.
The major travel agencies try to leverage these key players with different distribution and marketing strategies like alliances with other major travel agencies around the world and the best hotels in the country, presence in the Internet and travel guides, and offices in the best districts of the city.
On the other hand, the taxi companies use word-of-mouth to increase customers. They utilize their taxi drivers to inform about their city tours to their clients and promote them. They also use their offices as sales points.
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We have identified three main competitors in Taipei City described below.
1. Travel agencies and tour operators in Taiwan
There are an extensive number of travel agencies and tour operators in Taiwan. Most of them provide city tours in Taipei, very similar between each other. They offer morning tours, night tours or tours around nearby places outside the city. The morning tour lasts between 3 to 4 hours and has an approximately price of NT$900 (US$31) per person. It includes 5 touristic places, air-conditioning coach bus, an English, Japanese speaking tour guide, entrance ticket to Palace Museum NT$160 (US$5.5), hotel pickup and transfer and local travel insurance. A night tour or a tour to nearby places outside the city, has an approximately price of NT$1,300 (US$44.5) per person, lasts around 4 hours and includes the same things as the morning tour but different places to visit.
Strengths:
Their strength relies in their extensive know how of the business, especially those well known and big travel agencies like Lion Travel or Ez Travel. Their business model is well structured and they have international alliances likewise alliances with different hotels in Taipei who offer their city tours to the hotel guests. They also have several sales offices around the city strategically located for easy access and to attract more customers.
Weaknesses:
Their city tours are designed so that tourists are able to visit only four or five tourist places (the most important of Taipei) in four, five hours. They can’t be customized because they are made for groups. If a tourist wants a customized tour, the price is much higher. Said that, tourists are often limited to visit what the travel agency decides and the travel agencies usually don't operate unless there is more than one person for the city tour. Moreover, customers constantly complain about hiring city tours in Taipei that have provided tour guides with poor English language skills.
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travel easily. The taxi city tours provide English or Japanese speaking drivers. The city tour in Taipei lasts about 4 hours and includes the visit to around 3 tourist spots. The price per taxi is of NT$2,500 (US$85.59)Strengths:
Their biggest strength relies on the expertise of the taxi drivers when driving around the city, because of this and since the taxis don't need to follow a predetermined route, they can travel faster than the tour buses. Another strength is that the “Tour Taxi” program was created in cooperation with the government and as such receives full support from them. The government, for example, distributed a list of taxi drivers that offer this service to the hotels in Taipei. In 2009 when the program started there were 111 certified “Tour Taxi” drivers, now the number has increased considerably [14].
Weaknesses:
The major weakness of the “Tour Taxi” program is that is not well promoted; foreign tourists coming to Taipei usually don't know about this service. Also, the “Tour Taxi” drivers are only certified in English and Japanese not in other languages. Another weakness is the price.
For tourists that travel by themselves or in couples, the price of the “Tour Taxi” is more expensive than the common city tour.
3. Taipei Metro (MRT) and public transportation
A good way for tourists to travel around Taipei is using public transportation, especially the MRT. Tourists can visit most of the touristic places easily, with few exceptions like the National Palace Museum and the Martyr’s Shrine that are further away from the MRT station and have few bus stops nearby. The city government provides the option of one-day pass with unlimited rides on the MRT and public bus for the price of NT$180 (US$6.16) per person.
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travel to most of the places around Taipei in MRT and public bus for a very convenient price.Weaknesses:
One of the major weaknesses is that neither the MRT nor the public buses are dedicated to tourists; besides transportation they don't offer them any other added value. Also, public buses stops have information available only in Chinese, for those tourists that don't know the language and come for first time to the city it can be difficult to understand the routes.
Finally, tourists that use MRT can’t see the city landscape because most of the time they are traveling underground.
3. The company
The Taipei Hop-on Hop-off Sightseeing Tour Bus service will be part of a new travel agency that will be located in Taipei, Taiwan. As mentioned before, this business idea has been successful in several cities around the world but is new to Taipei. Therefore, the operation will focus on:
- Providing a new, unique, convenient and fast way of sightseeing in Taipei city using double-decker buses London style with different features in a pre-established route of three hours with 15 stops
- Give the opportunity to tourists to learn more of Taipei’s history and everyday life in a fun and interesting way using the multi-language audio-guides incorporated in the buses
- Provide a friendlier image of Taipei and Taiwan to tourists
- Be a more economic and high quality alternative to the city tours offered in Taipei.
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3.1. Company Ownership
The travel agency will be created as a private limited company and will be fully owned by its founder and principle investors. The reason behind is the belief that a total control of the company results in a better decision-making process. Also, establishing the agency as a limited company provides security to the shareholders and gives them the benefits of being a separate entity.
3.2. Company Locations and Facilities
The travel agency will operate in a small office in Taipei City area preferably in Datong District close to the initial point of the tour. This facility will be dedicated only to the administration and operations management of the Taipei Hop-on Hop-off Sightseeing Tour Bus but not for ticket sales.
For the ticket sales, and with the purpose of having a broader presence and reducing our staffing costs, we will use the following facilities:
- Service Center located in Taoyuan International Airport managed by the Tourism Bureau
- 20 authorized hotels
- 12 Information centers around the city managed by the Taipei City Government - The Hop-on Hop-off bus (customers will have the option of purchasing the ticket
directly in the bus)
- Our web page for online sales: www.taipeihoponhopoff.com
We will rent a parking lot for the buses in New Taipei City area near the initial point of the tour.
The office and the parking lot will be rented on a year-by-year lease.
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3.3. Hours of Operation
The Hop-on Hop-off buses will operate from Tuesday to Sunday, six days a week. The first bus will start the tour route at 08h00 in the morning and the last shift will finish at 20h00 at night approximately.
3.4. Start-Up Summary
For the start-up operations we will need 4 investors and acquire a long-term loan that will be paid in 5 years. Investor 1 is “CONSEL Internacional”, a construction company located in Quito-Ecuador looking to do overseas investments; the other investors should be Taiwanese preferably. Additional from the investment required, we will need extra cash from our investors for the start-up expenses like the pre-opening event, the stop signs, etc. The following is a detailed description of our start-up requirements:
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4. Service Description
The Taipei Hop-on Hop-off Tour Bus will cover a pre-established circle route with three double-decker buses that allows our customers to start the tour and end it in the same location.
The route will last 3 hours including 15 stops. The point of start will be close to Taipei Main Station area. The first bus will begin the tour at 08h00 in the morning, at 09h00 am the next bus will follow and at 10h00 am the last bus will start its route. We will have an extra bus that will be use in case one of the buses doesn’t return in time. This mechanism will ensure that the buses drive through all the stops every hour.
Buses schedule
The tour will have 15 stops strategically chosen that will allow our customers to hop-on and hop-off the bus as many times as they want and see the most of Taipei City. Along the route there will be around 25 or more tourist attractions including the most important, such as:
Taipei 101, Chiang Kai-shek Memorial Hall, National Palace Museum, Longshan Temple, and more. The route will also include around 20 or more hotels and places to shop like the famous Xinyi district, Shilin night market, Ximending, and others (see Appendix 6). The stops signs will show the exact information of the schedules of the buses, a map of the route, a list of the 15 different stops and the ticket sales points.
The final schedules, routes and stops, for the buses will be decided after a trial and error period in which the best option in term of times and costs will be chosen.
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panoramic sky-view ceiling and a small open deck to enjoy the landscape (see Appendix 7).In the bus every passenger will have the opportunity to listen to an audio-guide with interesting and fun pre-recorded commentaries in 16 different languages about the history, places and everyday life in Taipei. A professional tour guide will always be in the bus providing live commentaries in Chinese and English and any extra information the customers may need. A plasma screen will show the bus stops and real time information about events, exhibitions, expos, etc., happening in Taipei. Finally, to enhance the tour experience, the bus will also offer free Wi-Fi service on board.
To ensure quality and to be able to monitor and control our service in real time we will equip our buses with technological solutions such as GPS system and barcode scanner for tickets.
Also, every day after the last shift the buses will be cleaned and serviced to prevent breakdowns. In the morning the professional tour guide, in charge of the route, will personally inspect the bus to be presentable to our clients.
4.1. Competitive Comparison
As mentioned before in the market analysis, our competition comes in three forms:
Normal city tours –
Offered by local or international travel agencies are our direct competitors because tourists that buy city tours most certainly won’t use the Hop-on Hop-off Tour Bus. Due to their personalize service, including (pick-up and transfer from-to hotel) and a professional tour guide that is in charge of all the details, city tours are an attractive option for tourists looking for a comfortable way of doing sightseeing. However, one of their downsides is the quality of the tour guides; customers have complained about their foreign language level. Another of their disadvantages is that their service is not customized; tourists are subject to a fix schedule and a fixed quantity of places they visit. On the contrary, with the Hop-on Hop-off bus
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tourists choose the quantity of places they visit and the time they want to spend at each place.
Although our service only offers a professional tour guide on board, the buses are equipped with audio-guides that provide tourists with interesting and fun commentaries about the city and tourists sites in different languages.
Tor Taxi –
Although the “Tour Taxi” program created by the government is a good option for tourists, compared to the Taipei Hop-on Hop-off Tour Bus it has some disadvantages in comparison.
First, it is easier to appreciate the landscape traveling in a double-decker bus than in a taxi.
Second, the service they provide is not well known by tourists so they usually go unnoticed.
Finally, as mentioned before the price is higher than the normal city tours.
Taipei MRT and public bus –
Public transportation is very convenient in Taipei. Tourists that want to visit the city by themselves use it to go from one tourist site to another. The one-day ticket pass allows the use of MRT or public buses unlimited times in one day at a very convenient price. The biggest disadvantage in comparison with the Hop-on Hop-off Sightseeing Tour Bus is that they are not a service dedicated to tourists; besides transportation they don't offer them any added value. On the contrary, our service is designed to satisfy the tourist’s different needs.
4.2. Sales Literature
To officially introduce the Hop-on Hop-off Sightseeing Tour Bus in Taipei city we will create a sales kit that will contain a special brochure with extensive information about the company and our services, a CD with an example of the commentaries of the audio-guides and two special free passes. They will be distributed to key government officials working in the tourism and transportation sector, media, airport managers, hotel managers, convenience store managers, celebrities, etc.
We will also produce brochures in different languages, that will have detail information about our service, a map of the Hop-on Hop-off bus route and smaller maps of the areas near the
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will be distributed to hotels, information service centers and to customers once they buy the ticket (see Appendix 8).Folded leaflets in English, Chinese and Japanese, containing general information about the Hop-on Hop-off Sightseeing Bus service and the route map, will be produced and distributed to potential customers in airports and different parts of the city with high concentration of tourists.
Our Website will be a key component of our sales literature (see Appendix 9). It will have detail information about our company, our service, the maps, pictures, tourist sites, places to eat and shop, links with our social media pages, online bus tracking, etc. We will create a Web page that will attract people looking not only for information about the Hop-on Hop-off Sightseeing Tour but also looking for information about things to do in Taipei City.
4.3. Sourcing and Fulfillment
The primary issue regarding sourcing and fulfillment is the type and the source of the buses to be employed.
There are few companies that manufacture double-decker buses with the specifications needed for this project in China and Malaysia. We will have to evaluate them and choose the best option for our company taking in consideration prices and characteristics of the bus, importing costs and fees and guarantees provided.
Some of the manufacturing sources taken into consideration are:
- Sin Hock Leon Coach Works (Kuala Lumpur)
- Zhongda International Holding Co. (Mainland China) - Yangzhou Down Import & Export Co.
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Our best option in terms of the buses design will be Sin Hock Leon Coach Works in Kuala Lumpur because they created a special bus, which will be adequate for Taipei’s weather, for the Kuala Lumpur Hop-on Hop-off sightseeing (see Appendix 10).
Other important sourcing issues are related to the multi language audio guide, the Web platform hosting and software for security issues. For the audio guides we will evaluate various manufacturers in China, for the Web platform hosting we will choose a Taiwanese provider and for the security software we will evaluate the best providers around the world.
4.4. Technology
A cornerstone of our company and service is technology. The following are technological features that the Hop-on Hop-off Sightseeing Tour Bus will offer:
- Online travel information: with our Web page we will provide a quick and easy access to information about our services and about Taipei City, visitors will be able to find e-maps of the city and real time information about events, exhibitions, conferences, concerts, etc.; our customers will be able to track the buses via online with the online tracking bus option.
- Online ticket sales (e-ticketing): will enable customers all around the world to obtain tickets for the Hop-on Hop-off Sightseeing Tour Bus in a secure, convenient and fast way even before arriving to Taipei.
To assure the highest level of safety, comfort, reliability and service punctuality to our customers we will incorporate additional technological features to the Hop-on Hop-off tour buses like GPS system, bar code system for tickets, Wi-Fi and electronic screens to show real time information of social, cultural and business events happening in Taipei. These features will also help us have a better quality control of our service.
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In the short term, within the first year, we will offer night tours for special groups. Once the business expands we will purchase more buses to shorten the route time and also to offer different routes around the city, for example a tour dedicated for kids in weekends, or to offer the opportunity of renting the bus to schools or companies.
After six months of operation we will open a B2B opportunity: our Hop-on Hop-off double-decker buses will be available for advertising (bus advertisement media). We will sell advertising space only in the back of our buses to companies related to our service or to companies that share our same corporate values.
Also, we will provide different combinations of packages with the purchase of our tickets like discounts to tourist attractions, shows and shopping stores.
Finally, we will evaluate the possibility of offering guided tours in the different sights with professional tourist guides to provide a more complete service.
5. Strategy Implementation and Summary
Our strategy is to grow business by nurturing our clients, attracting new customers and differentiating from our competitors focusing in 3 pillars:
Our strategy is to grow business by nurturing our clients, attracting new customers and differentiating from our competitors focusing in 3 pillars: