在西班牙開設Luna Y Comida民宿的商業計畫書 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大. 立Master’s Thesis. ‧. ‧ 國. 學 sit. y. Nat. 在西班牙開設Luna Y Comida民宿的商業計畫書 n. al. er. io. Business Plan to Open Luna Y Comida Guest House. Ch. engchi. i n U. v. Student: Alexandre Taschereau Advisor: Professor Jack Wu. 中華民國一〇三年七月 July 2014.

(2) 在西班牙開設 Luna Y Comida 民宿的商業計畫書 Business Plan to Open Luna Y Comida Guest House. 研究生：唐雅立. Student: Alexandre Taschereau Advisor: Jack Wu. 指導教授：吳文傑. 國立政治大學. 學. ‧ 國. 立. 政治大. ‧. 商學院國際經營管理英語碩士學位學程碩士論文. er. io. sit. y. Nat. A Thesis. n. a to International MBA Program Submitted iv l C n U NationalhChengchi University engchi. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一〇三年七月 July 2014.

(3) Abstract Business Plan to Open Luna Y Comida Guest House By Alexandre Taschereau. 立. 政治大. Luna Y Comida is a start-up bed and breakfast business that will open near the old town of Valencia. ‧ 國. 學. Spain, in the Barrio Del Carmen. It will be a mid-range establishment with 6 rooms that will mainly target customers from the UK, France, Belgium and China, with some occasional Spanish. ‧. vacationers. The owners will live on the premises and will be able to serve the clients with excellent customer service in their own language (French, English, Spanish and Chinese). This personalized. Nat. sit. y. customer service will be at the earth of our success. We aim at providing to our customers a “home”. al. er. io. away from home and help reduce the stress usually accompanied with travelling abroad. Internet. n. and social media will play a big role in the marketing strategy, as it is the most efficient and direct. Ch. i n U. v. way to reach our possible guests. A variety of traditional and on-line promotions will be used to. engchi. advertise competitively our B&B. These will help make Luna Y Comida profitable by the end of the first year of operation. However, the profits will be modest for this first year, but they are expected to grow during the second and third year of operation.. Keywords: (B&B), (Valencia), (Spain), (Old town). iii.

(4) TABLE OF CONTENTS. Objectives ........................................................................................................................ 1. 1.2. Mission ............................................................................................................................ 1. 1.3. Success Factors ................................................................................................................ 1. 2.1. Products and Services ...................................................................................................... 2. 2.2. Company ownership ........................................................................................................ 3. 2.3. Management .................................................................................................................... 3. 政治大 Company summary .................................................................................................................. 2 立. 學. ‧. sit. y. Nat. 3. 1.1. Market Segment Analysis ........................................................................................................ 4. io. al. v. Market Analysis ............................................................................................................... 4. n. 3.1. er. 2. Executive Summary ................................................................................................................. 1. ‧ 國. 1. Ch. engchi. i n U. 3.1.1. Spain ............................................................................................................................ 5. 3.1.2. Valencia ....................................................................................................................... 6. 3.2. Target Customers ............................................................................................................. 9. 3.2.1. Chinese Tourists (Chinese Outbound Tourism) .......................................................... 9. 3.2.2. European Tourists ...................................................................................................... 10. 3.2.3. Spanish Visitors ......................................................................................................... 12 iv.

(5) 3.3 3.3.1 3.4. Porter’s 5 forces ......................................................................................................... 14 Competition Analysis .................................................................................................... 17. 3.4.1. Valencia mindfulness Retreat .................................................................................... 18. 3.4.2. Valencia Arthouse ..................................................................................................... 18. 政治大. Strategy and implementation.................................................................................................. 19. 立. Value Proposition .......................................................................................................... 19. 4.2. Positioning ..................................................................................................................... 20. 4.3. Pricing strategy .............................................................................................................. 21. 4.4. Marketing strategy ......................................................................................................... 22. ‧. y. sit. er. Chinese market strategy............................................................................................. 22. al. iv n C European and Spanish market 24 h e nstrategy hi U g c ...................................................................... n. 4.5. io. 4.4.2. Nat. 4.4.1. 學. 4.1. ‧ 國. 4. Industry Analysis ........................................................................................................... 14. Promotion strategy......................................................................................................... 26. 4.5.1. Traditional Promotions .............................................................................................. 26. 4.5.2. Online and Social Media Promotions ........................................................................ 26. 4.6 4.6.1. SWOT Analysis ............................................................................................................. 28 Matching .................................................................................................................... 29 v.

(6) 4.6.2. Financials ............................................................................................................................... 31 5.1 5.1.1. Startup Costs .............................................................................................................. 31. 5.1.2. Operating costs .......................................................................................................... 32. 政治大. 5.2. Revenues ........................................................................................................................ 34. 5.3. Financial statements ...................................................................................................... 36. 立. 學. Income statement ....................................................................................................... 36. 5.3.2. Cash Flow .................................................................................................................. 38. 5.3.3. Balance Sheet ............................................................................................................ 39. er. io. sit. y. Nat. Ratio analysis ................................................................................................................. 41. al. iv n C Break-even analysis ....................................................................................................... 42 hengchi U n. 5.5. ‧. 5.3.1. 5.4. 6. Costs .............................................................................................................................. 31. ‧ 國. 5. Converting ................................................................................................................. 30. Business Model Canvas ......................................................................................................... 43 6.1. Infrastructure ................................................................................................................. 44. 6.1.1. Key Activities ............................................................................................................ 44. 6.1.2. Key Resources ........................................................................................................... 44. 6.1.3. Key partners ............................................................................................................... 45 vi.

(7) 6.2 6.2.1. Value Proposition ...................................................................................................... 45. 6.2.2. Customers .................................................................................................................. 46. 6.2.3. Customer Segment ..................................................................................................... 46. 6.2.4. Channels .................................................................................................................... 46. 6.2.5. Customer relationship ................................................................................................ 47. 立. 政治大. Finances ......................................................................................................................... 48. 學. ‧ 國. 6.3. Cost Structure ............................................................................................................ 48. 6.3.2. Revenue Stream ......................................................................................................... 49. ‧. 6.3.1. y. Nat. 7.2 7.2.1. Short-term development ................................................................................................ 50. al. iv n C Offering dinner .......................................................................................................... 50 hengchi U n. 7.1.1. io. 7.1. sit. Future Business development................................................................................................. 50. er. 7. Offering ......................................................................................................................... 45. Mid to long-term development ...................................................................................... 50 Opening of a new location ......................................................................................... 50. Reference ....................................................................................................................................... 52 Appendix ....................................................................................................................................... 55. vii.

(8) List of Figures and Tables FIGURE 1 INTERNATIONAL TOURIST ARRIVALS, 1950-2005 (MILLION)........................ 4 FIGURE 2 WORLD INBOUND TOURISM BY REGION, 2012 ................................................. 5 FIGURE 3 INTERNATIONAL TOURISTS OVERNIGHT STAY BY REGIONS OF ORIGIN IN VALENCIA ........................................................................................................................ 7 FIGURE 4 GROWTH IN TOURISTS OVERNIGHT STAYS IN VALENCIA BY REGIONS OF ORIGIN IN 2012................................................................................................................ 8. 政治大 FIGURE 6 MAIN COMPETITORS ANALYSIS ........................................................................ 17 立 FIGURE 5 EXPECTED CUSTOMER SEGMENTATION, LUNA Y COMIDA ....................... 13. FIGURE 7 SWOP ANALYSIS OF LUNA Y COMIDA ............................................................. 28. ‧ 國. 學. FIGURE 8 PREDICTED EVOLUTION OF LUNA Y COMIDA OCCUPANCY RATE FOR THE FIRST 3 YEARS OF OPERATION ............................................................................. 35. ‧. FIGURE 9 LUNA Y COMIDA PREDICTED NET INCOME .................................................... 35 FIGURE 10 BUSINESS MODEL CANVAS OF LUNA Y COMIDA ........................................ 43. sit. y. Nat. al. er. io. TABLE 1 INTERNATIONAL OVERNIGHT STAYS BY COUNTRY OF ORIGIN IN. v. n. VALENCIA ............................................................................................................................. 7. Ch. i n U. TABLE 2 LUNA Y COMIDA PRICE STRUCTURE ................................................................. 21. engchi. TABLE 3 LUNA Y COMIDA START-UP COSTS .................................................................... 32 TABLE 4 LUNA Y COMIDA PREDICTED OPERATING COSTS FOR YEAR 1 TO YEAR 3 ................................................................................................................................................ 33 TABLE 5 EXPECTED INCOME STATEMENT ........................................................................ 36 TABLE 6 EXPECTED CASH FLOW .......................................................................................... 38 TABLE 7 EXPECTED BALANCE SHEET................................................................................. 39 TABLE 8 EXPECTED FINANCIAL RATIOS ............................................................................ 41 TABLE 9 BREAK-EVEN ANALYSIS ........................................................................................ 42. viii.

(9) 1 Executive Summary 1.1 Objectives a) To have a customer satisfaction rate above 90%. b) To generate an average of €7,500 per month of revenue in the first year. c) To be and stay 10% above the monthly average occupancy rate in Valencia before the end of the first year of operation.. 1.2 Mission. 立. 政治大. Luna Y Comida aims at providing to our customers a “home” away from home and help reduce the. ‧ 國. 學. stress usually accompanied with travelling abroad. To act as a bridge, a buffer between cultures and languages.. ‧. 1.3 Success Factors. y. Nat. sit. a) Maintaining an excellent and personalized customer service. n. al. er. io. b) Offer service in at least 4 different languages (Spanish, French, English, Chinese) c) Active social media presence d). Ch Beautiful and clean installations. e) Excellent food quality. engchi. 1. i n U. v.

(10) 2 Company summary 2.1 Products and Services Luna Y Comida will be a B&B located in Valencia, Spain, in the neighborhood called Barrio Del Carmen. Located close to the old town and near many touristic attractions, like the Valencia Cathedral and the Turia’s Gardens, as well as being relatively close to the beach (15 minutes bus ride) and the mountains. We will offer clean, comfortable, relaxed and unique rooms with a complementary delicious and complete breakfast. All food will be cook fresh and on location using. 政治大 partner with local wineries to 立 offer their wine and help promote their products as well as organizing fresh and local ingredients whenever possible. With the help of Sabrina, our consultant, we will. ‧ 國. 學. winery tours.. Luna Y Comida will have 6 bedrooms, 2 common rooms and a rooftop balcony. All the bedrooms. ‧. will be decorated differently in order to satisfy the different needs and taste of our clientele. The common rooms will include a dining room as well as a living room. All of these rooms will be. y. Nat. sit. comfortable, fully furnished and well decorate. Many books and magazines, in different languages,. al. er. io. will be available for the customers in the living room as well as a guitar and a television. It will. n. also have a computer with internet for the benefit of our clients. Free WIFI will be available. Ch. i n U. v. throughout the building. We will also have 4 bicycles available for our client, allowing them to. engchi. explore the area and the numerous cycling path of Valencia. During the summer and the high season, the breakfast will be served on the terrace. The rooftop will also have a small garden section, where fresh herbs, vegetables and plants will be grown. In addition to the breakfast, our establishment will also provide a laundry service, local tourist information, message taking service, pick-up service and will offer winery tours and outdoor activities like hiking and cycling. These outdoor activities will be organized by Alex, but some, like scuba diving and high-sea fishing, will be made by booking through local companies. Other activities might be offered depending on the customers’ demands and the management will pay attention to the needs of its customers. A book will be made available for the guests to leave. 2.

(11) comments and recommendations for future guests. This will allow customers to get information from other tourists on restaurants, things to do and see in Valencia and on Luna Y Comida itself.. 2.2 Company ownership The B&B is projected as a limited partnership with equal shares held by Alexandre Taschereau and Ann Lai. Both of them will come up with the same amount of starting capital, 37,500 euro each, for a total of 75,000. The mortgage will be under both name and all the possible loss and profits will be shared equally.. 立. 2.3 Management. 政治大. ‧ 國. 學. The management tasks will be separated between Ann and Alex. Alex, who has a bachelor’s degree in Economics and a MBA diploma will be responsible of the financials of Luna Y Comida and of. ‧. the outdoor activities. Ann will focus on the customer service and daily operations. The marketing will be made by both. Ann possesses a solid customer service background acquired while working. y. Nat. sit. as a customer service manager for many years. The management has extensive travelling. al. er. io. experience and a good knowledge of the hotel industry, as they have both worked in travel agencies,. v. n. hotels and restaurants before. All decisions will be made in common and both Ann and Alex will. Ch. i n U. have an equal weight in the decision process. A third person, Sabrina, will act as an ad hoc. engchi. consultant. Sabrina has a vast knowledge of the B&B business and of Valencia itself. She had been the co-owner of a B&B for many years in Taiwan before moving to Valencia a few years ago, to work in the local wine industry.. 3.

(12) 3 Market Segment Analysis 3.1 Market Analysis. 學 ‧. ‧ 國. 立. 政治大. Figure 1 International Tourist Arrivals, 1950-2005 (million) Source: UNWTO. sit. y. Nat. As the World Tourism Organization clearly states: “The substantial growth of the tourism activity. io. er. clearly marks tourism as one of the most remarkable economic and social phenomena of the past. al. n. iv n C h eofninternational to convince us of the saying. The number g c h i Uarrivals shows an evolution from a mere. century”. A quick look at Figure 1 International Tourist Arrivals, 1950-2005 (million) is enough. 25 million international arrivals in 1950 to an estimated 1,035 million in 2012, corresponding to an average annual growth rate of 6.5%12. The 4% growth for 2012 was a little below the overall yearly average but is still doing better than the long term projection of 3.8% average growth per year between 2011 and 2020 of the UN World Tourism Organization (UNWTO)3. Asia and the Pacific is the region that saw the most important growth of all, followed by Africa. Overall, Europe accounted for more than half of the total worldwide international tourist arrivals for 2012 as shown. 1. UNWTO, Facts and figures UNTWO, World Tourism Barometer, volume 11, January 2013 3 UNTWO, World Tourism Barometer, volume 11, January 2013 2. 4.

(13) in Figure 2. The economic challenges of the previous years don’t seem to have had a negative impact on the tourism industry and the prospects for the years to come are encouraging as the organization forecast a similar or slightly slower rate for 2013 and 2014.. WORLD INBOUND TOURISM, 2012 Middle East, 5%. 立. Africa, 5%. 政治大. Asia & the Pacific, 23%. ‧ 國. 學 Americas, 16%. ‧ sit. io. Figure 2 World Inbound Tourism by Region, 2012. n. al. er. Nat. y. Europe, 51%. Ch. engchi. i n U. v. 3.1.1 Spain Spain attracts tourists from all over the world as well as a seeing a high percentage of its own population spending their holiday trips in their own country, with its combination of beaches, mountains, historic buildings, beautiful sceneries, colorful festivals, sport events, cultural activities and delicious food and wine. In 2012, Spain ranked number one as was the most popular touristic destination in the EU for non-residents (people coming from abroad) when looking at the total of night spent in tourist accommodations. Visitors spent 243.4 million nights in tourist. 5.

(14) accommodations, or more than a fifth (21.6 %) of the EU-28 total. This was nearly as much as the top 2 (Italy) and top 3 (France) combined4. It was the 2nd highest tourism earner in the world in 2012, preceded only by the USA5. When looking at the number of international tourist arrivals, Spain placed 2nd in Europe, not far from the number one, France6. Based on those figures, we can conclude than more people go to France but tourists stay for a longer period in Spain. The country also sees its share of “local” tourism. A 2011 European Commission report on tourism states that 77% of Europeans vacationers spent their holiday trips in their own country7 (trips with. 治政 with 92%. According to the same study, nearly half of the大 Spanish population had made a holiday 立 trip of at least 4 overnight stays in the previous year. With a population of more than 46 million, overnight stay of more than 4 nights). Spain has an even higher percentage of domestic tourism,. ‧ 國. 學. the Spanish local tourism industry is flourishing.. ‧. 3.1.2 Valencia. y. Nat. Valencia, a city of around 800,000 residents, doesn’t see as many international tourists as other. sit. areas like the Canary Island or the city of Barcelona, with only 5.1% of the country`s overnight. al. er. io. stays by non-Spanish residents8. However, in 2012, there was more than 2,200,000 overnight stays. v. n. from international tourists in the city of Valencia itself. An increase of 16% compared to the 9. Ch. i n U. previous year . Figure 3 shows the region of origin of these tourists by the number of overnight. engchi. stays. An important part came from European and American countries, and 4% came from Asia. It is our understanding that the city is becoming more attractive with the recent opening the City of Arts and other cultural centers and that this trend should continue for the following years.. 4. European Commission, Eurostat UNWTO, World Tourism Barometer, volume 11, January 2013 6 UNWTO, Tourism Highlights 2013 , p.6 7 Demunter Christophe & Dimitrakopoulos Chryssanthi, European Commission, Eurostat, Domestic tourism, 8 Instituto Nacional de Estadistica, Hotel Occupancy Survey, January 2013, 9 Instituto Nacional de Estadistica, Hotel Occupancy Survey, 2013 5. 6.

(15) INTERNATIONAL TOURISTS OVERNIGHT STAY BY REGIONS OF ORIGIN IN VALENCIA Others, 15% Australia, 1% Asia, 4%. Americas, 9%. Europe, 71%. 學. ‧ 國. 立. 政治大 Source: Tourism Valencia. Figure 3 International tourists overnight stay by regions of origin in Valencia. ‧ y. Nat. U.K. France. 2011. 2012. 576,977. 549,239. er. al. n. Italia. io. Country. sit. Table 1 International overnight stays by country of origin in Valencia. iv 175,487 n C h163,543 e n g c h i U155,461 145,144. 2013 466,535 194,657 187,456. Holland. 122,571. 159,009. 186,022. Germany. 128,934. 164,975. 174,253. USA. 98,664. 104,485. 113,145. Belgium. 74,691. 74,044. 93,591. Switzerland. 41,430. 56,484. 60,200. China. 11,892. 21,040. 27,712. Source: Tourism Valencia. 7.

(16) Although only 4% of Valencia’s tourists in 2012 came from Asia, the number of Asians spending a least a night in the city is presently growing very quickly, with a staggering 60% growth10, as we can see from Figure 4. This growth is fueled by an increase of tourists coming from China and Japan, which respectively experienced a 77% and 89% growth 11 . The Spanish government recognizes the importance of Asian tourism, specifically from China. In 2012, the Spanish government has released a plan, “PLAN TURISMO CHINA”, or China Tourism Plan, in order to significantly increase the number of Chinese tourists visiting Spain. The objective of this plan is to raise the number of Chinese tourists from 100,000 in 2011 to 1,000,000 by 2020 (a 900% increase). 政治大 if the Spanish government doesn’t reach its goal, it is safe to say that it will have a positive impact 立. with a combination of aggressive marketing campaigns and facilitation of visa procedures12. Even. y. sit. al. n. 40%. io. 50%. ‧. 60%. Nat. 70%. 2012 growth in tourists overnight stays in Valencia by regions of origin. er. destination.. 學. ‧ 國. in the industry and that more and more Chinese tourists will choose Spain as their holiday. 30% 20%. Ch. engchi. i n U. v. 10% 0% Europe. Americas. Asia. Australia. Others. Figure 4 Growth in tourists overnight stays in Valencia by regions of origin in 2012. Source: Tourism Valencia. 10. Tourism Valencia Tourism Valencia 12 Plan Turismo China 11. 8.

(17) 3.2 Target Customers 3.2.1 Chinese Tourists (Chinese Outbound Tourism) A segment that is important for us and that we wish to focus our energy on is the Asian market, more specifically, the Chinese one. By the end of 2012, China had become the country with the highest expenditure on travel abroad with US$ 102 billion for that year. It is a 40% increase compare to the US$ 73 billion of 201113. Chinese tourists are travelling out of their country and are spending more money abroad each year and as shown previously, Spain and Valencia should. 政治大. continue to see its number of Chinese tourists increase.. 立. One might think that with the ethnic diversity and huge territory of China, a typical Chinese tourist. ‧ 國. 學. would be hard to define. This is true to some extent. However, for the majority of the Chinese nationals, the economics and political barriers are still too high to allow for international tourism. ‧. and therefore spends their holidays in China. As a result, most of the Chinese international tourists come from the 3 most economically developed regions; Beijing, Shanghai and Guangzhou14.. y. Nat. sit. The typical Chinese tourist used to be a first time international traveler who preferred organized. er. io. tours to independent travel and wanted to see as many countries as possible in a short period of. al. n. iv n C Barcelona for example. However, there a shift U h ehasnbeen i in the travelling behavior of the Chinese h c g tourist, a kind of “maturation”, moving from tour group to individual travel oriented. The face of time. Therefore, the Chinese traveler would mainly stay in the most touristic areas, like Paris and. the average Chinese tourist is now changing as he is becoming younger, richer, with travelling experience and bases his decisions on the overall experience instead of only looking at the costs15. We can classify him/her as a young professional, male or female, between 20 to 40 years old, single or married, without children and with a relatively high salary and is computer and internet savvy. He/she has a basic or intermediate level of English, but inexistent or limited knowledge of other. UNWTO, China – The new number one tourism source market in the world, Press release April 4 th 2013 Daniel Toma Gaimundiz, El Turismo Chino en Espana (The Chinese tourism in Spain), Universida de Sevilla, 2011, p.27. 15 ITB World Travel Trends Report 2011, p.16. 13 14. 9.

(18) European languages. He/she is looking to escape the fast pace of his everyday life and wants to get a deeper, more local and relaxing travelling experience, but without being totally disoriented and keeping a level of control. He/she can afford and is willing to pay a little extra to get what he/she wants, but is still conservative with money. He/she travels alone, with a friend or spouse. This new Chinese tourist perfectly describes our target customer. We believe that our customers are looking for an authentic Spanish travel experience, with an excellent and personal customer service, in a relatively stress free environment, where people are aware of their culture. We plan to offer exactly that to our Chinese customers.. 治政大 distance from China to Spain makes Chinese nationals have limited vacation time and the travelling 立 the destination unattractive for short (3 days or less) trips. The average stay of Chinese tourists in ‧ 國. 學. Europe was, in 2009, 9.2 days. Chinese residents have 3 main holiday periods: Chinese New Year (around February, depending on the Lunar calendar), May 1st and the Chinese National day (in. ‧. October). Those are the most common and popular time of the year for a trip to Europe. There are also shorter holidays like Western New Year, Tomb Sweeping Day, Dragon Boat Festival and the. Nat. sit. n. al. er. io. 3.2.2 European Tourists. y. Mid-Autumn Festival, when Chinese nationals might be able to travel abroad and visit Spain 16.. Ch. i n U. v. Another market segment that is of interest to us is the European segment. Like stated by Eurostat. engchi. for the year 2012: “Spain was for EU residents the number one foreign destination, in terms of number of trips as well as number of nights spent or expenditure.17” With 71% of the overnight stays in Valencia for that year18, we hope to capture some part of this important segment by offering something local yet different, comfortable and with excellent customer service. However, a recent study suggests independence between the top five tourism source countries for Spain19. Looking at Europe as one big market segment would pose many problems, therefore, we decided to focus our 16. http://www.timeanddate.com/calendar/?year=2013&country=41 Eurostats, tourism statistics – top destinations 18 Valencia Tourism 19 Gabriela Alvarez, Suhejla Hoti and Michael McAleer, Modeling Tourist Arrivals to Spain from the Top Five Source Markets, School of Economic and Commerce, University of Western Australia, 2007 17. 10.

(19) energy on French and English European speaking countries, specifically the UK, France and Belgium. A quick look at Table 1 International overnight stays by country of origin in Valencia shows us that these countries ranked second, third and seventh for the most overnight stays in valencia in 2013. We will aim at attracting tourists that have no or a limited knowledge of the Spanish language, that are looking for culture, to experience local festivals, history, sun and beaches, while staying in an accomodation that is central to their interests and that provides excellent customer service. Once. 治政大 We estimate that our average France, the UK and Belgium services in their own language. 立 customers’ age will vary between 25 to 45 years old. They will be travelling with their spouse or again, our knowledge of the French and English language will allow us to offer the tourists from. ‧ 國. 學. with friend. With our positioning and pricing policy (which is detailed in section 4.2 and 0 below) in mind, we will focus on customers from the middle class of these countries. Our excellent location. ‧. will contribute to attract customers looking to experience Valencia’s old town, while our excellent. Nat. io. sit. recommand us to their friends and on the internet.. y. customer service, provided with a personal touch will hopefully have them return and/or. er. European workers are entitled to a minimum of 20 working days of paid vacation per year (statuary. al. n. iv n C Christmas or new year. France requires h companies i Ua minimum of 30 working days of paid e n g c toh offer minimum annual leave). This doesn’t take into account any national holidays, paid or not, like. vacation per year in addition to the paid holiday on May 1st20. The United Kingdom’s full time workers are legally entitled to 28 paid working days of vacation while Belgium’s one have 20 working days of vacation plus 10 national holidays. Therefore, European citizens have time to travel and visit other countries, specially those closely located like Spain. In the last 10 years, tourists from France, Germany and the UK have been visiting Spain in big numbers in August and September, as well as in May.. 20. Ray Rebecca, Milla Sanes, and John Schmitt, No-vacation nation Revisited, May 2013. 11.

(20) They can access the country by road (cars and buses), train or planes. The emergence of cheap European airlines makes it fast, easy and cheap to travel by air in Europe. For example, it is relatively easy to find a one way plane ticket from the UK to Spain for under 45 euros during the high season (July and August) on the Internet with airlines like ryanair.com. The fare can sometimes be as low as 25 euros for the same months, which makes taking a holiday in Spain very affordable and attractive. A 2014 study by eurostat has shown that nearly all of the European tourists preferred a neighboring or nearby destination for international trips, with the exception of the UK, where Spain is the most popular destination21, and getting to Spain by road is still the most. 政治大. popular mean of transportation for most of the European tourists.. 3.2.3 Spanish Visitors. 立. ‧ 國. 學. Like mentioned in section 3.1.1, a high numbers of Spaniards vacationers, 92% of them to be exact,. ‧. took some vacation in their own country with at least 4 overnight stays22. With our great location, old town and close to the beach, we will attract vacationers that are looking for culture and. sit. y. Nat. gastronomy as well as the sun/beach seekers. Those two categories represent more than 40% of the Spanish vacationers, with a majority of them being men or women aged from 30 to 50 years old. io. er. that are married23. The sun/beach seekers usually travel in summer, from June to September, as. al. n. iv n C U to a minimum of 22 working days countries’ workers, the Spanish workh force e nis gpresently c h i entitled. well as the majority of the culture and gastronomy tourists24. In a similar fashion to other European of vacation plus another 12 days of paid holiday25. This provide an opportunity for locals to travel, not only during summer, but all year long and should deliver Luna Y Comida a flow of customers during the high as well as the low tourist season. We are aware that the last years have been. European Commission, Eurostat, Tourism statistics – top destination Demunter Christophe & Dimitrakopoulos Chryssanthi Domestic Tourism, European Commission, Eurostat, 23 Mallou Jesus Varela, Eduardo Picon Prado and Teresa Brana Tobio,Segmentation of the Spanish Domestic Touristic Market, University of Santiago de Compostela, Psicothema 2004 vol. 16, no 1, p.76-83. 24 Mallou Jesus Varela, Eduardo Picon Prado and Teresa Brana Tobio,Segmentation of the Spanish Domestic Touristic Market, University of Santiago de Compostela, Psicothema 2004 vol. 16, no 1, p.76-83. 25 Ray Rebecca, Milla Sanes, and John Schmitt, No-vacation nation Revisited, May 2013 21 22. 12.

(21) economically hard for Spain, but we this as an opportunity. We believe that when times are difficult, people will be even more incline to opt for a local trip rather than an international one. Based on our understanding of the target customers, we expect our client segmentation to be as shown in Figure 5. EXPECTED CUSTOMER SEGMENTATION LUNA Y COMIDA. 政治大. Others, 7%. 立. Chinese, 35%. ‧ 國. 學 ‧. Europeans, 50%. er. io. sit. y. Nat. Spanish, 8%. Figure 5 Expected customer segmentation, Luna Y Comida. n. al. Ch. engchi. 13. i n U. v.

(22) 3.3 Industry Analysis 3.3.1 Porter’s 5 forces. Bargaining Power of Customers. Bargaining Power of Suppliers. High. Low. 立. Threat of new entry. 政治大. ‧ 國. 學. Rivalry. Relatively Low. Low to Moderate. ‧. Moderate to high. n. al. er. io. sit. y. Nat Threat of New Entrants. Threat of Substitutes. Ch. i n U. v. Most of the time, starting a B&B requires owning a house and the cost associated with buying a. engchi. new property are quite high. The house market varies depending of the location and the economy. Therefore, the starting cost can increase or decrease. The general economic climate of Spain at the moment has soften this entrance barrier, but it still remains relatively high and makes it hard for new entrants to enter this industry. However, the same economic climate and high unemployment rate has forced residents to become more ingenious to make some money and many homeowners are renting extra rooms in their house, with a very low entry barrier. This is made possible with the internet and websites like airbnb.com. Still, we estimate the threats of new entrants to be relatively low.. 14.

(23) Bargaining Power of Customers There are many hotels, villas for rent and B&B in Spain and Valencia and the cost associated with switching between them is very low if not nonexistent. The internet has really give the opportunity to customers to compare and shop for the best deal possible. The bargaining power of customer is therefore quite high and creates a real drawback. Bargaining Power of Suppliers. 政治大 experienced in Spain makes it easier to higher qualified staff at a reasonable salary. The cost of 立. A B&B mainly requires labor and food to operate. The high unemployment rate currently. switching employees is relatively low as no complicated training is associated with the B&B. ‧ 國. 學. industry. In regard of the food, there are many local farmer’s markets and supermarkets in the center of the city. The bargaining power of these suppliers are also quite low as it is very easy to. ‧. go to the stand next door at the local markets or to another supermarket.. io. sit. y. Nat. Threat of substitutes. er. The main substitutes to a bed and breakfast are hotels and camping grounds. They however cater. al. n. iv n C and breakfast to camping and vice-versa. h eCustomers i U in a B&B are looking for something n g c hstaying. to specific types of customers and it is unlikely that potential customers would change from bed. specific. Because the owners live on the premises, staying in a bed and breakfast provide a much more personal experience than a stay in a hotel. Customers are more threated like guests than customers and staying in a bed and breakfast allows, to a certain degree, to “live like a local”. These are not feelings and experiences possible while staying in a hotel or a camping ground. Moreover, camping grounds, are usually located outside the city and Valencia isn’t the exception26. They also target a specific type of customers: families that are generally looking for a way to save on. 26. Eurocamping. 15.

(24) accomodation and a more independant type of tourism. Therefore, we believe that the threat of substitutes is somehow between located between low and moderate. Rivalry As of June 2014, there were 99 bed and breakfasts and inns listed on tripadvisor.com27 and 102 on airbnb.com28 in the city of Valencia. The numbers are quite high and indicates a fierce competition between businesses. However, it is our understanding that each bed and breakfast is highly. 政治大. differentiated. Customers are looking for something specific and the internet allow them to search and found exacly what they are looking for. We believe that this somehow lowers the rivalry. 立. somewhere between moderate and relatively high.. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. 27 28. Ch. engchi. Tripadvisor airbnb. 16. i n U. v.

(25) 3.4 Competition Analysis After researching on multiple Bed and Breakfast search websites such as tripadvisor.com and bedandbreakfast.com as well as on many bed and breakfast websites, we have concluded that our main competitors are going to be Valencia Mindfulness Retreat and Valencia Arthouse. Both ranking respectively first and second on many websites by its customers. Based on the available information and actual reviews from customers, we have graded them, on a scale of 1 to 5 with 5 being the best score, on many factors: the quality and size of the rooms, the overall decoration,. 政治大 value offered. We estimate that Luna Y Comida will offer similar customer service and great 立 location, with slight improvements in the other evaluated factors, as shown in Figure 6. It is customer service, cleanliness, the location, their website, the spoken languages, the food and the. ‧ 國. 學. interesting to note that we weren’t able to find a Spanish bed and breakfast in Valencia that offer services in Chinese.. Grade (o-5). ‧. 2. y. sit er. al. n. 3. io. 4. Nat. 5. Main Competitors Analysis. Ch. engchi. i n U. v. Valencia Mindfulness Retreat Valencia Arthouse. 1 Luna Y Comida 0. Figure 6 Main Competitors Analysis. 17.

(26) 3.4.1 Valencia mindfulness Retreat This Bed and breakfast offers many service similar to what Luna Y Comida plans to offer. They however focus on relaxation and see themselves as a “retrea”. Like us, they target singles or couples without children, they have a policy of no one under the age of 16, who have no or a limited knowledge of the Spanish language, that are looking for culture, to experience local festivals, history, sun and beaches, while staying in an accomodation that is central to their interests (in the touristic neighborhood of Barrio Del Carmen) and that provides excellent customer service. They. 政治大 customers’ satisfaction and recommendations. They claim to offer service in Spanish, English, 立 French and German. Their website includes a lot of useful information but is neither user friendly seem to live up to their customers’ expectations as they have received many awards based on. ‧ 國. 學. nor attractive. They advertise their prices to be between €60 and €100 with a maximum of 2 customers per room per night29. This particular B&B has a Facebook page appears to be active on. ‧. it (posting new content once or twice a week).. sit. y. Nat. 3.4.2 Valencia Arthouse. er. io. This bed and breakfast located in the touristic neighborhood of Barrio Del Carmen ranked second,. al. n. iv n C rooms, of a reasonable size, but that cannot h e nbegqualified i asUspacious. They seem to offer excellent h c customer service and clean installations. The prices start at €65 for a single room and €90 for a. behind Valencia Mindfulness Retreat, in tripadvisor.com and bedandbreakfast.com. They offer 4. double room 30 . Based on the pictures posted on their websites, we believe that the overall decoration could be improve and seems a little old. They too claim to offer service in English, French and Spanish, with a certain degree of knowledge in German. We feel that the design of their website is attractive and easy to navigate. Their social media presence is not very active. They have a Facebook page but when looking at it in July 2014, the newest post was from November 2013.. 29 30. Valencia Mindfulness Retreat Valencia Arthouse. 18.

(27) 4 Strategy and implementation 4.1 Value Proposition We aim at providing to our customers an excellent personalized service in their own language if possible, and with particular attention to their cultural backgrounds. This being done in a comfortable, clean and Spanish environment that should allow our customers to explore and experience Valencia and its surrounding easily and with less worries. We believe our bed and breakfast would act as a “buffer” to cultural shock and difficulties associated with an inexistent or. 政治大 from different cultures, our personal 立 backgroud will allow us to sucessfully target Chinese and. limited knowledge of the Spanish language and culture. While aiming at catering to customers. ‧ 國. 學. Taiwanese nationals as well as customers coming from English and French speaking countries. A lack of knowledge of the Chinese language and culture is the major source of concern coming from Chinese national vacationers, while travelling in Spain31 and Luna Y Comida directly addresses. ‧. this major issue. We also know, from experience, that English is not widely spoken outside the. y. Nat. touristic centers of Barcelona and the canary island and communication with hotel and restaurant. n. er. io. al. sit. staff can be hard if the customers doesn’t speak Spanish.. Ch. engchi. 31. i n U. v. Daniel Toma Gaimundiz, El Turismo Chino en Espana (The Chinese tourism in Spain), Universida de Sevilla, 2011, p.45.. 19.

(28) 4.2 Positioning Luna y Comida will position itself somewhere in the mid-scale Bed & Breakfasts. We will offer our customers a similar experience that they would get from a 3 stars establishment, but in a more personalized way. The structure of our bed and breakfast, where the customer interact directly with the owners, will allow us to provide excellent customer service that is personalized to each guests, and possibly in their own language (Chinese, French, English and Spanish). Our rooms and commun areas will be decorated with style, creating a feeling of comfort and maximazing the well-. 政治大 rooms always reach our high standard, while using eco-friendly cleaning products as we see 立 ourselves as an eco-friendly business. We will offer delicious food that will be prepared daily and. being of our clients. Cleanliness is a very important factor for us and will ensure that all of our. ‧ 國. 學. cooked with attention in our kitchen, using fresh as well as local products whenever possible.. ‧. n. er. io. sit. y. Nat. al. Ch. engchi. 20. i n U. v.

(29) 4.3 Pricing strategy The guesthouse and B&B industry is characterized with a two price schedule: the high-season, when the prices are higher and the low-season, when the clients pay less. For marketing purpose, we have decided to label our low-season prices as our “normal” prices. The high-season prices will simply be a 15 euros extra on the usual ones. The tourist high-season in Valencia runs from June to Septembers and Luna Y Comida will conform to it and charge the extra price. We will also impose this surcharge during the time of the famous Valencian Festival Las Fallas in February.. 治政 Luna Y Comida will offer 6 bedrooms to its clients. All of大 them will be considered double rooms, with some with the possibility立 to install an extra single bed and another one with the possibility to ‧ 國. 學. fit 4 people. Room 1 to 4 will have a double bed. Room 5 will have two double beds and will be able to accommodate up to 4 people. Room 6 will have two single beds. To fix our prices, we have. ‧. researched bed and breakfasts already in activity in the neighborhood where we plan to establish ourselves. Like shown in section 3.4 Competition Analysis, we looked at the services offered and. sit. y. Nat. the advertised prices, gave them a grade on a scale of 1 to 5, where 5 is the highest, and compared. io. on the price structure below.. n. al. er. them with what we expect Luna Y Comida to be. We then looked at our expected costs and decided. Ch. Number of guests. engchi. i n U. v. Prices (€). High season prices (€). per room 1 guest. 60 €. 75. 2 guests. 80 €. 95. 3 guests. 100 €. 115. 4 guests. 120. 135. Table 2 Luna Y Comida Price structure. 21.

(30) 4.4 Marketing strategy 4.4.1 Chinese market strategy In order to inform and attract Chinese nationals, our website will be available in simplified Chinese and will be easily accessible on the internet. China had more than 500 million internet users in 201132 and travelers use internet to research about their destinations and possible accommodations. The website will have pictures of our B&B including all bedrooms and common areas. All rates with be clearly stated and explained as well as the services that we offer. We will post picture and. 政治大 well as basic information on local attractions and things to do and see in Valencia. Finally, on-line 立 booking will be made available directly on the website. We will also advertise on daodao.com, the give examples of our breakfasts. Specials and discounts will also be advertised on the website as. ‧ 國. 學. Chinese trip advisor, and allow booking from this platform as well as from our website.. ‧. Luna Y Comida will have an active presence in Chinese social media. From the more than 500 million Chinese internet users, an overwhelming 92% of them used social media in some way in. sit. y. Nat. 201133. We will encourage visitors on our website to follow us on Sina Weibo (the Chinese twitter). io. er. and on Kaixin and Renren (two Chinese website similar to Facebook) to get more information, to ask us questions directly and also to be informed about special offers (a discount in a local. al. n. iv n C smartphones to access internet and wehplan i U communication line with our possible e ntogopen c ha direct. restaurant or a free bottle of wine, for example). A high percentage of Chinese nationals use. customers and ourselves through the application wechat, where they will be able to inquire directly about rooms’ availability and price. We will also encourage customers to write testimonials and share their experience at Luna Y Comida on the different social media platforms. The presence of the Chinese language will not be limited to the web. We plan to offer services in Chinese as well, with our Chinese speaking owners (Ann’s mother tongue and Alex’s intermediate level of Chinese). Other part time staff might not be able to express themselves in this language,. 32 33. ITB World Travel Trends Report 2011, p.17. ITB World Travel Trends Report 2011, p.17.. 22.

(31) therefore we will also provide our Chinese customers with on-site information in Mandarin. The information in Chinese will range from tourist information of local attractions and transport, maps and things to do and see to our policies, prices, menus and explanation of the services provided at Luna Y Comida. The information will be made easily accessible in order to facilitate and make the stay of our customers as comfortable and convenient as possible. A 2010 survey sponsored by China Outbound Tourism Research Institute (COTRI), where questions were asked to 200 Chinese tourists and travel agencies, states that nearly 60% of the respondents list a general lack of knowledge of the Chinese language and culture, as well as insufficient information available in. 政治大 our cultural background and language abilities, Luna Y Comida will be able to easily address this 立. their language, as the main deficiency Chinese tourists experience while travelling in Spain34. With. issue and offer a unique, comfortable and convenient stay to Chinese nationals.. ‧ 國. 學. To enhance the experience and wellbeing of our Chinese clientele, small gestures and attention to. ‧. details will be important. Like stated earlier, we plan to offer menus in Chinese as well as offering limited Chinese dishes. The COTRI sponsored survey names having menus in Chinese as well as. Nat. sit. y. offering some Chinese dishes as possible amelioration for hotels and guesthouses35. Many, if not. io. er. all hotels in China offer some type of easy access to hot water. We will have kettles in our rooms for the guest to boil water at their convenience as well as a small selection of tea. We also intend. n. al. i n U. v. to have books and magazines in Chinese available in the common living room as well as movies. Ch. engchi. with Chinese subtitles. Finally, like stated earlier, Chinese nationals are big consumers of internet and social media. Therefore, free Wi-Fi Internet will be made available throughout the building, allowing them to surf the Internet, post pictures and keep in touch with friends and family at home. These might not be seeing as important ameliorations, but we hope to make our customers as. 34. Daniel Toma Gaimundiz, El Turismo Chino en Espana (The Chinese tourism in Spain), Universida de Sevilla, 2011, p.45. 35 35 Daniel Toma Gaimundiz, El Turismo Chino en Espana (The Chinese tourism in Spain), Universida de Sevilla, 2011, p.50.. 23.

(32) comfortable as possible and little things like these could make the difference between a nice stay and a great one.. 4.4.2 European and Spanish market strategy Like stated above, we hope to attract European vacationers, mainly from the UK, France and Belgium with our knowledge of their language, paired with excellent customer service and comfortable and relaxing ambiance. To successfully do so, our website will be available in different. 政治大. languages; English, French and Spanish. This will allow potential gests to get and clearly understands the information they need and to see if what we offer cater to their needs. The website. 立. will have pictures of our B&B including all bedrooms and common areas. All rates with be clearly. ‧ 國. 學. stated and explained as well as the services that we offer. We will also post pictures and give examples of our breakfasts and dinners. Specials and discounts will also be advertised on the. ‧. website as well as basic information on local attractions and things to do and see in Valencia. Finally, on-line booking will be made available directly on the website. We will advertise on. sit. y. Nat. hotels.com, tripadvisor.com, bedandbreakfast.eu and bedandbreakfast.com. Luna Y Comida will also have an active presence in social media. We will encourage visitors of our website to follow. io. er. us on twitter and Facebook to get more information, to ask us questions directly and also to be. al. n. iv n C also be present, in a similar manner on “Spanish Facebook” hthe en g c h i U Tuenti.. directly informed about special offers (a free dinner or a free bottle of wine, for example). We will. To maximize the satisfaction of our European clientele, we will be able to serve our guests in 3 European languages; English, French and Spanish. We will also provide touristic brochures and maps in Spanish, English, French, German and Italian as well as free wireless (Wi-Fi) internet connection throughout the building and up to date information on what is going on in the city (festivals, concerts, exposition, sport events, etc.). Luna Y Comida will serve delicious food and beverages (from a selection of tea, coffee, juice) in a relaxed and comfortable environment in our dining room or terrace. The common living room will be furnished with couches for engaging conversation with other guests if wanted, watching a movie, playing games or reading a book or a. 24.

(33) magazine. Our bookshelves will be filled with a selection of books and magazines in different languages. We will also provide bicycles so our guests can explore the city and the surroundings while using the well-developed cycling path of Valencia and its surrounding. Preserving the environment, or being “green” is also very important for us as well as for our European customers. When asked in a 2011 survey about how important was protecting the environment to them, 95% of the citizens of our European target countries (France, UK. Belgium and Spain) replied that it was important (from fairly to very important)36. We will make a clear. 治政大be powered by LED bulbs and small halls will we activated by movement detectors. All lights will 立 signs will remind our customers to switch off the lights before leaving their room. A small recycling. statement on our website that our Bed and Breakfast is as eco-friendly as possible. Lights in our. ‧ 國. 學. bin will be placed next to the trash cans in the rooms as well as common areas. Water saving showerheads will be installed in all of our showers and all cleaning products will be. ‧. environmentally friendly. Our kitchen will use local products whenever available in order to lower the environmental footprint and will serve organic and fair trade coffee to our guests. We will also. sit. y. Nat. “recycle” organic waste and transform it into compost, which will be used as fertilizer for our. io. er. rooftop garden and any plants throughout the building. By taking the above actions, not only will we reduce our overall costs (electricity and water bills for example) but we will also appeal to the. n. al. i n U. v. majority of Europeans, who are preoccupied by environment issues. Nearly 3 out of 4 residents. Ch. engchi. from the UK, France and Belgium in 2011 were willing to pay more to buy environmentally friendly products or services37.. European Commission, Attitudes of Europeans citizens towards the environment, Special Eurobarometer 365 – EB75.2 37 European Commission, Attitudes of Europeans citizens towards the environment, Special Eurobarometer 365 – EB75.2 36. 25.

(34) 4.5 Promotion strategy To attract more customers, we will have different promotion campaigns during the year, especially during the low season. Not only will we offer traditional promotions (discounts that we usually encounter in the industry) but also some more creative types of promotions. Most our specials will be advertise on our website, but some will only be available from our social media accounts and pages.. 4.5.1 Traditional Promotions. 立. 政治大. To counter the seasonal effect of the tourism industry, we will offer lower prices during the low. ‧ 國. 學. season, which is a common practice in the industry. Off-season price will be €15 lower and we plan to experience with different schedule of prices, like stay Sunday night and get Monday night half price. Another general promotion will be a discounted price of 5% to 15% (depending on the. ‧. season) if the guests stay for a long period of time. Because the average length of stay in tourist. y. Nat. accommodations in the Valencia region is around 4 nights38, this type of discount will be applicable. sit. for a stay of 5 nights or longer and aims at prolonging the number of nights our customers spend. er. io. in our bed & breakfast. We plan to experiment with different promotions to find out which one is. al. n. iv n C difference between our occupancy rate hand i ofUthe local industry for the same targeted e nthegaverage h c period, while factoring the existing trends our business will be experiencing. Based on their success more efficient. To do so, we will evaluate the success of each campaign will be based on the. or failure, the different promotions will be repeated, adjusted or abandoned if needed.. 4.5.2 Online and Social Media Promotions Customers visiting our website will get encouraged to follow us or like us on our social media accounts and pages to gain access to different discounts. With this type of promotions, attracting people to stay in our bed & breakfast is not the sole goal. We also want people to visit our. 38. European commission, Eurostat, Average length of stay. 26.

(35) website/social media pages, to follow us or like us on these platforms and get them talking about Luna Y Comida, which will create publicity for us. According to Nielson, discounts are very high incentives to like or follow a brand or company on social media, as 34% of Asia Pacific Internet users put this as the main reason to liking or following a brand or business39. These specials will be divided into 2 categories: Discounts on food and drinks in local restaurants, where customers can get a free bottle of wine, or a discount on the price of the meals; and discount on the price of the rooms, where customers will get a discounted % off the price of their stay. The way to measure the success of these types of promotions won’t be that straight forward as with the more traditional. 政治大 the “online traffic and publicity” they have created: increase in the number of visitors on our 立. ones. We will take into account the number of times the promotions has been redeem, as well as website and in the number of “retweet”, shares, likes and followers on our social media channels.. ‧ 國. 學. Again, based on the success or failure, the promotions will be repeated, adjusted or abandoned if needed.. ‧. n. er. io. sit. y. Nat. al. 39. Ch. engchi. Nielson, Deal with it! Discounts drive brand love on social media. 27. i n U. v.

(36) 4.6 SWOT Analysis. Strengths. Weaknesses. Knowledge of multiple cultures. Limited number of rooms. Knowledge of multiple languages. No direct experience in running a B&B. Multi-lingual website. Low visibility brand. Foreigner 治政 Partnership with local winery 大 Delicious food 立 Great location Good knowledge of customer service. ‧ 國. 學. Active social media presence Handy owners. ‧. SWOT ANALYSIS. y. Nat. Opportunities. sit. Threats. al. er. io. Fast growing Asian market. Highly competitive industry. iv n i U industry e n g c hMature Social Media (discontent). n. Government "Plan Turismo Chino". Ch. Possible economic recovery. Maturation of Chinese tourists Social Media (satisfaction). Seasonal industry. Possible slow economic recovery. Room for improvement (learning curve). Chinese tourists Possible failure of government plan. Economic downturn Possibility of opening new locations. Figure 7 SWOP Analysis of Luna Y Comida. 28.

(37) 4.6.1 Matching We believe that, considering the opportunities of the fast growing Asian market, the government implication in attracting Chinese tourists to Spain with its Plan Turismo Chino and the maturation of Chinese tourists, our knowledge of the Chinese culture and main language, combine with our Chinese language web page and services will allow us to fully seize these opportunities and put. them to our advantage. Also, our active social media presence in pair with our good knowledge of customer service should help us take advantage of the growing importance of social media and. 政治大 high customer satisfaction rate that our active presence on Facebook and the likes will allow us to 立 leverage in getting good publicity and at the same time to improve our brand visibility. blogs in making a purchase40, especially in choosing a place to stay on holiday. We anticipate a. ‧ 國. 學. Our great location connected with our marketing strategy should attract local as well as. ‧. international guests, which should provide some kind of an “edging” tool for the speed of the economic recovery. If the economy doesn’t recover quickly or worsened, cheaper price will act as. sit. y. Nat. an incentive for Asian customers as well as boosting local tourism (from Spanish vacationers), as the cost of an oversea trip might be too high. On the other hand, if the economy quickly improves,. io. al. n. European tourists.. er. we will probably experience a decrease in local tourism, but also an increase in the number of. Ch. engchi. i n U. v. For the same reasons as mentioned above, the threat of bad social media publicity isn’t that high. If some issues arise, our social media presence will be able to take note of the negative comments and act on them to insure a high customer satisfaction. Negative social media comments can be turned into an opportunity to improve and to show how serious we are in our commitment to provide an excellent service.. 40. Nielson, Improving customer experience by listening and responding to social media. 29.

(38) 4.6.2 Converting We are aware that our lack of experience in running a Bed & Breakfast could harm us, especially in the beginning where mistakes can cost a lot. Our customer service experience, combine with the help of our consultant, who has a vast knowledge of this industry, should help us lower the risks generally associated with inexperience. Also, this weakness will eventually disappear, as we gain more knowledge and insights on how to run such a business.. 政治大. We understand that we are about to enter a competitive industry. In order to succeed, we have decided to use our knowledge of the Chinese language and culture to tap into a booming market,. 立. the Asian one. We are confident this will give us an advantage vis-à-vis other bed & breakfast and. ‧. ‧ 國. 學. hotels in Valencia and should lower the risks that normally come with this threat.. n. er. io. sit. y. Nat. al. Ch. engchi. 30. i n U. v.

(39) 5 Financials 5.1 Costs Because our business isn’t yet in operation, we had to pose some hypothesis and make some assumptions in order to calculate the startup and the operating costs. These were carefully chosen to represent, to the best of our knowledge, what the future will bring for Luna Y Comida. When evaluating the possibilities, we have chosen conservatively. Therefore, when in doubt, we have tended to choose the higher costs.. 立. 5.1.1 Startup Costs. 政治大. ‧ 國. 學. Hypothesis and assumptions:. 1- Based on the current real estate market in Valencia, the cost of the future property is. ‧. evaluated to be around 430,000 euros.. y. sit. business.. Nat. 2- The property will require 20,000 euros of repairs and renovations to fit the needs of our. al. n. euros.. er. io. 3- We will secure a mortgage with a fix rate of 4.2% for 25 years for an amount of 380,000. Ch. engchi. i n U. v. The main cost associated with opening Luna Y Comida is the acquisition of a building. The Spanish real estate market is relatively low and the current economic situation represent an opportunity to buy a property at a price that is lower than what it was a few years ago. It is however a considerable investment that requires taking a mortgage. Based on the price listed on different realty websites, we have concluded that a 430,000 euros residence will meet our requirements. The property will however require some modifications and repairs to fit our needs and a further 20,000 euros will be necessary to do so. Based on the current market and our credit history, we are confident that we will secure a mortgage with a fix rate of 4.2% or lower for 25 years for an amount of 380,000 euros. We will provide 75,000 euros, or 20% of the loan, as a down payment. Based on these assumptions, our monthly mortgage payment will be of 2,048 euros for a total of 24,576 euros per year. A 31.

(40) complete mortgage payment structure and schedule is available in appendix D. Table 3 below shows the predicted startup costs in euros with the expected life and the annual amortization. Table 3 Luna Y Comida start-up costs. Annual frequency Cost per Unit Total cost Expected life. Cost. 1. 20,000. 20,000. 10. 2,000. Bed frame. 8. 200. 1,600. 10. 160. Mattress. 8. 治 6 300 1,800 政大 1 500 500. 400. 3,200. 5. 640. 5. 360. 5. 100. 1. 1,000. 1,000. 10. 100. 1. 500. 500. 10. 50. Living room furniture. 1. 4,000. 4,000. 5. 800. Rooftop furniture. 1. 500. 500. 100. 1. 1,500. ‧. 5. 1,500. 5. 300. 4. 200. 800. 5. 160. Bathrooms and bedrooms items. 立. Safety equipment. Front entrance sign. ‧ 國. Kitchen equipment. Dining room furniture. io. sit. 35,400. n. al. 5.1.2 Operating costs. 4,770. er. Total. Nat. Bicycles. 學. Home renovation and repairs. y. Startup costs. Ch. engchi. i n U. v. Hypothesis and assumptions: 1- Part-time staff will be necessary when the monthly occupancy rate is predicted to be above 72%. 2- For the simplification of the analysis, a rent of 600 euros per months has been deducted from the owners’ salary. 3- The monthly mortgage payment was mentioned in the startup costs but is included in the operating costs because of its monthly nature.. 32.

(41) The operating cost of Luna Y Comida are estimated in Table 4. The majority of it consist of the mortgage payment and the owners’ wages. We consider all of the costs mentioned in the table, except for the breakfast costs and the room and housekeeping supplies, to be fix costs and the previous two to be variable costs. We estimate those variable costs to be around 5.50 euro per customers, or 5.00 euros for the food and 0.50 euros for the supplies.. Operating costs. Year 1. breakfast Food costs Room and housekeeping supplies. 立. Marketing advertising & promotions. Dues and subscriptions. 2,760. 4,590. 4,590. 24,576. 24,576. 24,576. 3,600. 3,600. 120. 120. 120. 1,200. 1,200. 1,200. 300. 300. 300. 180. 180. 1,200. 1,200. 3,600. 180 1,200. al. 2,000. n. Insurance. 773. sit. io. Electricity. Nat. Maintenance. 751. ‧. Telephone, cable & Internet. Auto expenses. 7,730. Permanent employees salary. Ch. 1,800. e n g c8,640 hi. er. Office supplies. 7,511. 學. Rent/mortgage. Year 3. 5,941 政治 594 大. ‧ 國. part-time employees. Year 2. y. Table 4 Luna Y Comida predicted Operating Costs for year 1 to year 3. i n U. v. 2,000. 2,000. 1,800. 1,800. 8,640. 8,640. Owners' wages. 40,800. 40,800. 40,800. Other expenses. 0. 0. 0. 4,770. 4,770. 4,770. 98,481. 102,038. 102,279. Startup cost Total. 33.

(42) 5.2 Revenues Luna Y Comida B&B will get the totality of its revenue from the proceeds of renting the rooms. Like the previous section on costs, this section is based on predictions and estimates. We posed some hypothesis and assumptions in order to calculate the revenues for the first three years of operation. Those hypothesis and assumptions were carefully chosen to represent, to the best of our knowledge, what the future holds for Luna Y Comida. When evaluating the possibilities, we have chosen conservatively. Hypothesis and assumptions:. 立. 政治大. ‧ 國. 學. 1- We believe that the future occupancy rate of the hotels and bed and breakfast of Valencia will be similar to the one of the previous years.. 2- We estimated the monthly occupancy rate as the average of the last 3 years for each. ‧. month.. y. and will follow the average tendencies.. sit. Nat. 3- Luna Y Comida will start its operations 25% point under the monthly average calculated. er. io. 4- Because of marketing, visibility and recommendations, Luna Y Comida occupancy rate. al. n. iv n C The third year will see a 2% occupancy rate increase he i U from the previous one. h n c g Because of our price structure, we estimate the average income per room for a night to will gain 4% monthly on the average occupancy rate until it will exceed it by 10%. 56-. be 80 euros during the low-season and 95 euros during the high-season. Based on the assumptions and hypothesis above, the occupancy rate of Luna Y Comida for the first three years of operations is stated in appendix B and Figure 8 shows the evolution of the occupancy rate of Luna Y Comida in comparison with the average Valencian occupancy rate. We have based our income estimates of the income statement, balance sheet and cash flow statement on the predicted monthly occupancy rate and the income details are included in appendix C. Because these are only predictions, we will monitor the real occupancy rate as it occurs and will make any. 34.

(43) adjustment to our predictions if necessary during the year. Figure 9 shows the expected profit for the first 3 years of operation.. Monthly Occupancy Rate Luna Y Comida for the first 3 years 100% 90%. Occupancy rate. 80% 70% 60% 50%. 立. 40% 30%. 政治大. ‧ 國. 學. 20% 10% 0%. ‧. MarMay Jul Sep Nov Jan MarMay Jul Sep Nov Jan MarMay Jul Sep Nov Jan Luna Y Comida. Valencia Average. y. Nat. n. al. er. io. sit. Figure 8 Predicted evolution of Luna Y Comida occupancy rate for the first 3 years of operation. Predicted Net Income Luna Y Comida iv. Ch. n engchi U. Net Income (euro). € 20,000. € 18,357. € 16,267. € 15,000. € 10,000 € 5,000. € 2,031. €Year 1. Year 2. Year 3. Figure 9 Luna Y Comida Predicted Net income. 35.

(44) 5.3 Financial statements 5.3.1 Income statement Table 5 Expected Income Statement. Projected Income Statement Luna Y Comida. 立. Sales. Year 3. 101,865. 128,850. 132,574. 0. 0. 0. 101,865. 128,850. 132,574. 54,030. 54,030. ‧. ‧ 國. Gross profit. Year 2. 學. Cost of sales. 政治大Year 1. Operating Expenses. 52,200. y. Nat. Payroll. 3,600. 3,600. Insurance. 1,800. 1,500. 1,500. v n i1,200. 2,000. 2,000. 1,200. 1,200. 300. 300. 300. Mortgage Principal payment. 8,784. 9,160. 9,552. Depreciation and amortization expenses. 4,770. 4,770. 4,770. Food. 5,941. 7,511. 7,730. Other operating expenses. 2,094. 2,251. 2,273. total operating expense. 82,689. 86,322. 86,955. Earnings Before Interest and Tax. 19,176. 42,528. 45,619. Interest expenses on Long-Term debt. 15,792. 15,416. 15,024. er. al. 2,000. n. Electricity. sit. 3,600. io. Sales, marketing and other expenses. Telephone, cable and Internet subscriptions. Ch. engchi U. 36.

(45) Pre-tax earnings. 3,384. 27,112. 30,595. Tax expenses Assuming 40%. 1,354. 10,845. 12,238. Net Income. 2,031. 16,267. 18,357. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 37. i n U. v.

(46) 5.3.2 Cash Flow Table 6 Expected Cash Flow. Projected Cash Flow Luna Y Comida For Year 1, 2 and 3. Year 2. Year 3. Net income from operation. 26,606. 40,843. 42,933. Depreciation / amortization. 4,770. 4,770. 4,770. 31,376. 45,613. 47,703. (415,000). 0. 0. Cash Flow from operation. ‧ 國. 立. 學. Year 1. y. 政治大. Net cash provided by operating activities. ‧. Cash Flow from investing. Purchase of Land and building. Nat. 0. 0. Purchase of Furniture and Equipment. (15,400). 0. 0. (450,400). v. 0. 0. Proceed from issuing long-term debt. 380,000. 0. 0. Payment of long-term debt. (24,576). (24,576). (24,576). Proceed from starting capital. 75,000. 0. 0. Net cash provided by financing activities. 430,424. (24,576). (24,576). 11,401. 21,037. 23,127. er. sit. (20,000). io. Building improvement. Net cash flow from investing. n. al. Ch Cash flow from financing activities. engchi. Increase (decrease) in cash. 38. i n U.

(47) 5.3.3 Balance Sheet Table 7 Expected Balance Sheet. Balance Sheet Luna Y Comida Year 1. Year 2. Year 3. 11,401. 32,438. 55,565. 0. 0. 0. 0. 0. 0. 11,401. 32,438. 55,565. 415,000. 415,000. 415,000. 20,000. 20,000. 20,000. (2,000). (4,000). (6,000). 15,400. 15,400. 15,400. (2,770). (5,540). (8,310). 0. 0. 0. 445,630. 440,860. 436,090. 457,031. 473,298. 491,655. 8,784. 9,160. 9,552. 8,784. 9,160. 9,552. 371,216. 362,057. 352,505. Current Assets Cash and Equivalent Account Receivable Other Current Assets Total Current Assets. ‧ 國. 學. Long-Term Assets. 立. 政治大. Building and Land. Building improvement. ‧. Accumulated building improvement amortization. al. n. Total Long-term Assets. er. io. Other Long-term Assets. Total assets. y. Accumulated furniture and equipment Depreciation. sit. Nat. Furniture and Equipment. Ch. engchi U. v ni. Current Liabilities Account Payable Short-term debt Current Portion of Long term debt Other current liabilities Total current Liabilities Long-Term liabilities Note payable Other Long-Term liabilities. 39.

(48) Total Long-Term liabilities. 371,216. 362,057. 352,505. Paid in Capital. 75,000. 75,000. 75,000. Retained earnings. 2,031. 27,082. 54,598. Total Equity. 77,031. 102,082. 129,598. 457,031. 473,298. 491,655. Equity. Total Liabilities. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 40. i n U. v.

(49) 5.4 Ratio analysis Table 8 Expected Financial Ratios. Year 1. Year 2. Year 3. Sales growth. 0.0%. 26.5%. 2.9%. Cash ratio. 2.5%. 6.9%. 11.3%. Current asset. 2.5%. 6.9%. 11.3%. Long-Term Asset. 97.5%. 93.1%. 88.7%. 3.54. 5.82. 3.54. 5.82. 3.54. 5.82. Current. 立. Quick Acid test. 政治1.30 大 1.30 1.30. ‧ 國. 學 76.5%. 71.7%. Pre-tax return on Assets. 0.7%. 5.7%. 6.2%. Return on Assets (ROA). 0.4%. 3.4%. 3.7%. 2.6%. 15.9%. 14.2%. n. al. 18.8%. Gross profit margin. Pre-tax profit margin Net profit margin. Ch. 100.0%. i U e n g c h3.3% 2.0%. Marketing expenses / Total expenses. 4.4%. 41. y. sit. io. Return on Sales (ROS). 33.0%. 34.4%. v100.0% i n. 100.0%. 21.0%. 23.1%. 12.6%. 13.8%. 4.2%. 4.1%. er. Return on Equity (ROE). ‧. 81.2%. Nat. Total debt to asset.