Gold Compass TravelTravel. In the right direction.
Terri FargoTerri FargoJonathan ScharffenbergJonathan ScharffenbergSally Arizaga Sally Arizaga Ramon Perez Ramon Perez Christian MachadoChristian Machado
MissionMission
Provide customers with a unique and Provide customers with a unique and personalized vacation planning personalized vacation planning
experience in a manner that reflects experience in a manner that reflects our passion for travel and our passion for travel and
commitment to superior customer commitment to superior customer service. service.
VisionVision
Our vision is to facilitate the creation Our vision is to facilitate the creation of positive life experiences through of positive life experiences through
travel. travel.
ConceptConcept
Luxury Vacation Planning SpecialistsLuxury Vacation Planning Specialists
Customer Value ThroughCustomer Value Through ““Above and Beyond” ServiceAbove and Beyond” Service
Customer DatabaseCustomer Database Destination PacketsDestination Packets Vacation DebriefingVacation Debriefing SeminarsSeminars
ConceptConcept
Convenient AccessConvenient Access Store LocationStore Location Web siteWeb site ““House Calls”House Calls”
Organization and Organization and ManagementManagement
General Partner and ManagerGeneral Partner and Manager Terri Fargo Terri Fargo
Limited Partner and AgentsLimited Partner and Agents Sally ArizagaSally Arizaga Christian MachadoChristian Machado Ramon PerezRamon Perez Jon ScharffenbergJon Scharffenberg
Augmented by Advisory BoardAugmented by Advisory Board
IndustryIndustry Industry OverviewIndustry Overview
Travel Agencies: SIC 4724 & NAICS 561510Travel Agencies: SIC 4724 & NAICS 561510
Travel & Tourism- 3rd Largest Retail IndustryTravel & Tourism- 3rd Largest Retail Industry
Overall Travel Expenditures $679.4 billion in Overall Travel Expenditures $679.4 billion in 20062006
IndustryIndustry Industry Characteristics & TrendsIndustry Characteristics & Trends
Mature and growing at 2.9%Mature and growing at 2.9% Consolidation of IndustryConsolidation of Industry Declining Commissions = Service FeesDeclining Commissions = Service Fees
Industry CompetitorsIndustry Competitors Online (Expedia and Priceline.com)Online (Expedia and Priceline.com) Local MarketsLocal Markets
Gold Gold Compass Compass TravelTravel
Zoe’s Zoe’s Cruises & Cruises & ToursTours
AAAAAA TravelStTravelStoreore
Target Target MarketMarket
High income, High income, educated educated travelerstravelers
Princess Princess passengerspassengers
AAA MembersAAA Members Business Business TravelersTravelers
OperatiOperationsons
5 agents - 1 5 agents - 1 location location
8 agents – 1 8 agents – 1 locationlocation
6027 agents – 6027 agents – 1066 locations1066 locations
280 280 agents -agents -25 25 locationslocations
CustomCustomererServiceService
Customer Customer satisfaction satisfaction through through personal personal serviceservice
87% 87% customer customer referralreferral
Complaints: Complaints: UnprofessioUnprofessionalnalDifficult to Difficult to get get informationinformation
Members onlyMembers only
Complaints:Complaints:UnprofessionalUnprofessionalProblems with Problems with travel planningtravel planningDid not resolve Did not resolve customer customer complaintscomplaints
Awarded Awarded “Leader “Leader in Luxury in Luxury Travel”Travel”
MarketMarket
44% Increase in Millionaire 44% Increase in Millionaire Households Since 2003Households Since 2003
Increased Luxury Consumer Increased Luxury Consumer Spending in 2006Spending in 2006 3.8% of income 3.8% of income $56,000 estimated in 2006$56,000 estimated in 2006
During the During the last 12 last 12 months months
have you:have you:
Household IncomeHousehold Income
$100K+$100K+ $150K+$150K+ $200K+$200K+
Purchase Purchase any luxury any luxury productproduct
89%89% 92%92% 97%97%
Purchased Purchased any luxury any luxury serviceservice
85%85% 87%87% 93%93%
Purchased Purchased traveltravel 57%57% 64%64% 68%68%
Purchased Purchased electronicselectronics 56%56% 59%59% 66%66%
Purchased Purchased fragrance/bfragrance/beauty eauty productsproducts
43%43% 46%46% 45%45%
Purchase Purchase maid maid serviceservice
37%37% 45%45% 63%63%
Target MarketTarget Market Individuals Age 30-Individuals Age 30-
5050 College EducatedCollege Educated MarriedMarried Three CategoriesThree Categories
Near AffluentNear Affluent AffluentAffluent Super-AffluentSuper-Affluent
Highest Mean Highest Mean Income: El Dorado Income: El Dorado County & Placer County & Placer CountyCounty
Sacramento Metro Area Demographics
010000200003000040000500006000070000
County
Num
ber o
f Hou
seho
lds
Near Affluents
Affluents
Super-Affluents
Customer ProfileCustomer Profile
Affluent TravelerAffluent Traveler Less likely to book onlineLess likely to book online Want convenienceWant convenience Want to be “educated”Want to be “educated”
Customer ProfileCustomer Profile
Seek Experience Rather Than Seek Experience Rather Than Material GoodsMaterial Goods Enjoyment & pleasure Enjoyment & pleasure Quality of lifeQuality of life
Relaxation & stress reliefRelaxation & stress relief ““Making memories”Making memories”
6 trips per year6 trips per year Almost $26,000 on travelAlmost $26,000 on travel
Sales ForecastSales Forecast
National MarketNational Market 33,000 establishments 33,000 establishments $59.5 billion$59.5 billion
State MarketState Market 5,785 establishments5,785 establishments $7 billion$7 billion
Sales ForecastSales Forecast
Local MarketLocal Market 223 establishments 223 establishments $196.4 million$196.4 million .45% penetration.45% penetration $900,000 in revenue$900,000 in revenue
Gold Compass TravelGold Compass Travel ..15% penetration 1st year15% penetration 1st year $288,708 in revenue$288,708 in revenue
Start-Up CapitalStart-Up Capital
Owner InjectionOwner Injection General Partner - $500General Partner - $500 Limited Partners - $7,000 eachLimited Partners - $7,000 each Total = $28,500Total = $28,500
LoansLoans $55,000 the 1st year$55,000 the 1st year 1st year only interest payments1st year only interest payments 2nd year start paying the principal on the loan2nd year start paying the principal on the loan
Credit FinancingCredit Financing
$200,000 Line of Credit$200,000 Line of Credit
Amortized over 30 years at 8.25% Amortized over 30 years at 8.25% interest with a balloon after 6 yearsinterest with a balloon after 6 years
Use of FundsUse of Funds
Rent & Tenant ImprovementsRent & Tenant Improvements Tenant improvements $7,800 Tenant improvements $7,800 Rent $16,000Rent $16,000
SalariesSalaries $80,000 $80,000
TechnologyTechnology $6,110$6,110
Use of FundsUse of Funds
MarketingMarketing $28,565$28,565
Licenses & CertificatesLicenses & Certificates $5,355$5,355
Growth RateGrowth Rate
0%
2%
4%
6%
8%
10%
12%
0 2 4 6
Year
Gro
wth
GoldCompassTravel
Industrygrowth
Revenue and Net IncomeRevenue and Net Income
RevenueRevenueYear 1= $288,708Year 1= $288,708
Year 2= $363,525Year 2= $363,525
Year 3= $398,865Year 3= $398,865
Year 4 = $430,776Year 4 = $430,776
Year 5 = $465,238Year 5 = $465,238
Net IncomeNet IncomeYear 1= $18,580Year 1= $18,580
Year 2= $91,754Year 2= $91,754
Year 3= $107,731Year 3= $107,731
Year 4 = $117,109Year 4 = $117,109
Year 5 = $135,583Year 5 = $135,583
Total AssetsTotal Assets
Year 1 = $135,849Year 1 = $135,849 Year 2 = $253,727Year 2 = $253,727 Year 3 = $368,605Year 3 = $368,605 Year 4 = $496,774Year 4 = $496,774 Year 5 = $642,538Year 5 = $642,538
ProfitabilityProfitability
5 Year Annual Average5 Year Annual Average Return on Investment = 80%Return on Investment = 80% Gross Profit Margin = 90%Gross Profit Margin = 90% Net Profit Margin = 23%Net Profit Margin = 23%
Allocation of Profits and Allocation of Profits and LossesLosses
General Partner General Partner Terri FargoTerri Fargo
30% equity position30% equity position
Limited Partners Limited Partners Christian, Jon, Ramon, SallyChristian, Jon, Ramon, Sally
17.5% equity position each = 70%17.5% equity position each = 70%
Exit StrategyExit Strategy
Remain in businessRemain in business Alternative:Alternative:
Sell at the end of year fiveSell at the end of year five No less than balance sheet value of $642,538No less than balance sheet value of $642,538 DCF Valuation of expected cash flowsDCF Valuation of expected cash flows
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