Business Plan : Tour Operator in Mie, Japan~ Tour Agency Ise (TAI) ~“

Abstract

With drastic increase of foreign tourists to Japan (CAGR: 8.7%), their characteristics and needs during their stay have been diversified. Although tourists, mainly from Western countries, wish to visit less-visited area to obtain authentic and local experiences, due to the issues such as language, transportation and lack of information, unfortunately it is not easy. In order for them to fulfill their needs, a local tour operator which organizes authentic activity tours is in need. In the Ise Shima National Park of Mie Prefecture, where there are many attractive tourist attractions, including Ise Jingu – the top of all the shrines in Japan, there is business opportunity for an inbound ground tour operator. A Tour operating company, TAI (Tour Agency Ise) will be established in the Ise city, with the aim of fulfilling the tourists’ needs of local authentic experiences and vitalizing the local community. TAI will plan and organize cultural and activity tours in collaboration with local enterprises. The annual national total target market size of inbound ground tour operator is considered $513 million with CAGR 21.9%. The inbound ground tour operator market in the Ise Shima area is not developed and there is not yet any strong competitor. Thus, TAI would be a pioneer to focus on providing authentic tours to foreign tourists. In differentiating itself from other local tour operators, TAI would provide many varieties of authentic tours in English and Mandarin with the price at the international standards. TAI plans to promote the Ise Shima National Park as a whole together with the local governments to increase the market size in the area, using governmental grants. The main target customers are Western tourists who visit Japan as couples and families who seek for modern luxury experiences. TAI’s value proposition is “authentic experience in your travel without stress”. Financial projection of TAI is estimated that TAI’s monthly net income becomes surplus in the 10th month after the launch of operation and pay-back period is 29 months. In order to launch its business, US$200,000 is necessary to cover investment and working capital, and TAI would like to invite investors to this attractive investment for the amount of $150,000 for the 24% ownership of the company. The expected return of this investment is following. Considering the trend of growth of tourism industry with tailwind by the governmental support, it is definitely time to start the tour operating company, TAI in the Shima National Park. The investment in TAI is considered very attractive.