Is Travel Tourism Business Profitable?

Kabayan,

One of the businesses that we like to venture in is the Tourism Business specifically to become a Travel Operator in this industry. The reason is that we love travelling that is our first love.

We never miss to talk about this business every time we go travelling. We always make simple business analysis and computation. The first thing we do – to find out if the business is profitable or not.

And based on our latest travel to Baler, Aurora, below is what we found out.

  1. Simple Business Analysis
    1. Profitability
      1. You have to know the following:
        1. Computation is based on One (1) Trip alone
        2. There are 30 days in a month and 12months in a year
        3. Exclusive of meals and entrance fees
        4. Inclusive of transportation and accommodation
Items Amount Notes
Visitors            35,000 14pax/P2,500 per head
Accomodation        (12,000)  3 Rooms
Hi-Ace Amortization          (21,000) Payable in 5years and after downpayment
Excess Cash Inflow              2,000 Payments to Drivers, Gas, Maintenance, and related expenses

 Below is the list of initial considerations needed to maximize the business profit:

Profit

Maximize the number of visitors per vehicle due to fixed payments such as Bank Amortization, Gasoline, Driver’s Salary/Allowance, Maintenance cost, Toll Fees, etc..

The First Trip is Break-Even or at minimum business operation loss.

The business will only earn from 2nd to 3rd trip every month.

Destination

The travel operator should not only focus in one destination. Offer other destinations or tourism spot to traveler.

This will lessen the opportunity cost or to avoid losing the business opportunity.

Financial Target

As a start, the best way to determine the financial target is by setting that cash receipt from operation is more than the vehicle’s monthly amortization and related fixed expenses.

Start-Up Capital

Based on estimate, Vehicle initial payment (down payment) could range from P200K-P300k and payable in 5 years – Not Bad as long as the business is in its full operation.

The Cost Business Registration in DTI and BIR could range from P10,000 to P30,000 while SEC is not needed as long as the business is not a Corporation or Partnership. (This is just an estimate based on  our experience by assisting other businesses t register)

Affiliation Membership – I have no idea how much would be the cost of affiliation membership. As a start, we don’t think that this is necessary considering the travel operator we had in our Baler Tour is not affiliated with any tourism program. Take note – this operator is already running for 4 years and they are still in operation without this.

Working Capital could range from P100,000-to P200,000.

Marketing

The best marketing is your visitors through recommendations. – Visitors will only recommend your business if you give them the best you can give.

Price for the tour should be considered also.

Paid Advertisement. Maximize this for certain fees. The travel operator who assisted us is operating for more than 4 years now with this marketing strat.

At the end, we always find this business amusing and profitable.

Kaya kabayan, if you are looking for a business opportunity – try this kind of business. This could help you earn additional income or could be the key of goingback home.

We always believe that every business is a good investment and opportunity.

We believe that a business is like a dragon (which is dominant in all areas like land and air) which should be handled by good people to become a good business.

Regards,

The Cristobal

 

PS. This business is amusing because of fun, new friends, and surprises…

FUN – Yes, that’s Mr. Cristobal on the surf board. Proudly standing after two failed attempts. (sorry the pic is not clear but it’s him, promise)

 

FRIENDS – We joined this wonderful group with a bonus including Ms. Cham Hernandez (with scarf) – Mutya ng Taguig. It’s a bonus in our trip travelling with a beauty queen

SURPRISES – Business has always it’s own surprises just like travelling you never knew that beauty is around us until you see it for yourself