Table of Contents

1.0 Executive Summary.........................................................................................................................1

2.0 Industry Analysis.............................................................................................................................2

2.1 Industry Background....................................................................................................................2

2.2 Industry Size, Players, and Growth..............................................................................................2

2.3 Porter’s Five Forces Analysis......................................................................................................3

2.3.1 Industry Rivalry...................................................................................................................3

2.3.2 Threat of New Entrants........................................................................................................3

2.3.3 Threat of Substitutes............................................................................................................4

2.3.4 Supplier Power.....................................................................................................................4

2.3.5 Buyer Power........................................................................................................................4

3.0 Company Description......................................................................................................................5

3.1 The Company’s Background and the Product’s Description........................................................5

3.2 Competitive Advantage...............................................................................................................5

3.3 The Location and Structure..........................................................................................................5

3.4 The Mission.................................................................................................................................5

3.5 The Vision...................................................................................................................................6

4.0 Market Research and Analysis.........................................................................................................6

4.1 Market and Customer Overview..................................................................................................6

4.2 Market Size and Trends...............................................................................................................6

4.3 Market Segmentation and Target Market.....................................................................................7

4.4 Travelers’ Demographics and Behavior in the Gulf Cooperation Council (GCC).....................7

5.0 The Economics of the Business.......................................................................................................8

5.1 Revenue Drivers and Gross Margin.............................................................................................8

5.2 Expenses....................................................................................................................................10

5.3 Calculation of Breakeven Point.................................................................................................10

6.0 Marketing Plan..............................................................................................................................11

6.1 Product.......................................................................................................................................11

6.2 Price...........................................................................................................................................12

6.3 Place..........................................................................................................................................12

6.4 Promotions.................................................................................................................................12

7.0 Product Design and Development Plan..........................................................................................12

8.0 Operations Plan..............................................................................................................................13

8.1 Company Structure....................................................................................................................14

8.2 Management Team....................................................................................................................14

9.0 Overall Schedule............................................................................................................................16

10.0 Financial Projection.......................................................................................................................18

11.0 References.....................................................................................................................................19
1.0 Executive Summary
The increase demand of online travel services as more travelers prefer to use smartphone apps
for booking and planning their trips creates many opportunities for new business to penetrate the
travel and tourism industry. UTravel is an app that will be developed to serve the traveler
enthusiasts in the Middle East region with online touring and travel services that satisfy the
needs and wants of travelers. UTravel App will provide touring experience by showing the
travelers and tourists the most visited tourist places with estimated budget needed to be spent;
along with providing flight, hotel and restaurant reservation services, rental car service, parking
reservation service, and other services and features that facilitate the trip planning and booking
for the travelers in the Middle East.
Unlike other online travel app in the market, UTravel will be differentiated in two ways: Utravel
app will help the travelers to discover places, and Utravel app only take 10% commission which
will make the prices offered in UTravel app less than the other competitors. Another thing that
distinguish UTravel App is that the ability to download the 3D map and use it when no internet
connection available, as well as UTravel App has a feature that let the users know the safety of a
specific place, so they can avoid any tourist places that exploit travelers and tourists.
Although the competitors have an international reputation, our marketing strategies are aimed at
targeting a specific and small portion of the market share in the Middle East, which we estimate
if we achieve targeting the market, our business will be profitable in the third operational year.
In financial terms, we expect the annual sale of $315,000 with cost of sales $296,100 and total
expenses of $44,150 in 2020, the annual sale of $705,600, with cost of sales $624,456, and total
expenses of $86,250 for 2021, as well as the annual sales of $987,370, with cost of sales
$867,898.23, and total expenses of $93,633 in 2022.

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2.0 Industry Analysis
2.1 Industry Background

At the end of the 1990s, larger travel companies started using technology to enhance customer
satisfaction through the better reservation of hotel rooms, flight tickets, car rental and other
services. This created a wide range of online travel agencies selling related services at low prices
as the internet offered many opportunities. Further, this fragmented the market as the customers
became more price-sensitive (Maxwell, 2011).

With a turnover of more than $5 trillion and still rising, the travel and tourism sector is strongly
driven by smartphone applications and online globalization. People no longer depend on travel
maps and guidebooks because of the rapid technological advancement and the creation of mobile
apps which revolutionize how travelers schedule their holidays through easing the research of
new places, reserving hotel rooms and flight tickets, looking for good restaurants and other
travel-related services.

Therefore, the growing popularity of mobile applications has improved the relationship between
the mobile app industry and the travel industry which increases the trend of travel companies
designing their own mobile apps (Bezerra et al., 2015).

2.2 Industry Size, Players, and Growth

The online travel industry has a fast growth rate reaching the size of one trillion USD industry in
2018 which along the way reduces the market shares of offline and travel agents. This incredible
growth rate in the online travel industry is caused by high smartphone penetration and the
increased usage of mobile apps in online booking. The Online Travel Agents (OTA) led by
Priceline, Expedia, Booking.com, Ctrip, TripAdvisor, and a few others are benefiting from the
year over year growth of the online travel industry (Raveh, 2018).

80% of travelers not only use the travel apps for reservation but also use them to search for trips
as the apps offer other services including price drop alerts, check-in, booking vouchers,
reservation updates, boarding passes, and many more (Raveh, 2018).

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 2.3 Porter’s Five Forces Analysis

2.3.1 Industry Rivalry

The online travel market was 96% dominated by a few big companies, but OTAs have evolved
as the internet created change in travel distribution. The online travel industry has become very
competitive as rivals compete for market share to keep up, and the travel companies tend to
search for options to reduce their prices. Now that OTAs are again predominantly run by the
Global Distribution Systems (GDSs), it seems that industrial rivals are agreeing for lower price-
based competition and, thus, making competitiveness medium in the industry.

2.3.2 Threat of New Entrants

The size and scope of operations in both airline and hotel distribution make it difficult for new
competitors to enter. There are large upfront fixed costs needed to establish the systems and
technology infrastructure, that have grown over time as the market and industry developed. The
large OTAs have established supplier relationships with hotels, car rental companies and other
tour providers, and have significant advertising investments in their brands.

However, the emergence of Global New Entrants (GNE), such as ITA Software 1, Farelogix and
G2 Switchworks that offer new technology that could connect directly to supplier reservations
systems offering to reduce their travel distribution costs by 75%; along with Google’s search
technology combined with ITA’s Software expertise could easily develop new and better tools
for travel search and comparison create new opportunities for new entrant as the online travel
industry is being lucrative. Thus, given the potential for new entrants to the industry, this threat
would be considered to be medium.

2.3.3 Threat of Substitutes

Substitutes to online travel distribution through OTA distribution are the travel suppliers own
travel websites, reservation offices and call centers. In recent years the airlines and hotels have

1
ITA Software is an airfare search and pricing system which has been acquired by Google in
2005
3
begun encouraging users to book directly on their sites to eliminate the fees they pay to the
distributors. Furthermore, hotels are following suit using their loyalty programs to provide
additional service, room upgrades and special rates not available for product booked through the
OTAs. However, because of the lack of convenience to the end customer having to research
information from various websites, and the individual service nature of travel agent services, the
threat of substitutes to OTAs distribution channels is considered to be low.

2.3.4 Supplier Power

The OTAs rely very heavily on information provided from the three GDS companies and hotel
distributors and changing involves high switching costs to modify systems and retrain staff
which is one of the reasons why the GDSs have now vertically integrated with the OTAs. The
suppliers to OTAs are the GDS systems that control the end product supply from the airlines,
hotels and car rental agencies. These suppliers rely on both traditional travel agents and online
travel agents to distribute a large portion of their product. With limited means of distributing
their product and lots of competition in their own industries, travel suppliers have limited power
with the GDS/OTAs. As such, the supplier power is considered to be low, and possibly medium,
only since the GNEs created an alternative distribution channel for suppliers.

2.3.5 Buyer Power

The online travel agency industry is about providing the traveler with the best deal on whatever
travel service they hope to purchase. Buyers have high power in this industry due to the fact that
if the buyer doesn’t buy the service, there is no profit. The industry relies on offering lower
prices or better deals than their competitors and the source. In addition, switching costs for
buyers are low. It’s very easy for a consumer to compare prices of Expedia and Priceline and
then just choose whichever is lowest. Therefore, the purchasing power of the customer is high.

4
3.0 Company Description
3.1 The Company’s Background and the Product’s Description

“UTravel” is a new company specializing in the provision of online traveling services via an
app available for Android and IOS devices aiming at offering services - such as booking flight
tickets and hotel rooms, renting cars, reserving restaurants and parking with showing the
payment methods available and the currency used in the intended places. Furthermore, the app
will support the Arabic language and other languages, and the app will also be integrated with
3D Map feature to show travelers clearer views of the areas and tourist places, gas stations,
hospitals, and other places important for any traveler.

3.2 Competitive Advantage

What distinguishes UTravel App is the availability of downloading the map to use when not
having an internet connection and displaying the percentage of the safety in the tourist places to
warn the travelers of the places that take advantage of tourists.

3.3 The Location and Structure

The company will be located at Al-Raidah Digital City. The structure of the company is a
partnership as our group (Rana, Shamma, Leen, Lamees, and Maha) will contribute to the
establishment of the company by each one investing in the company. The partnership of the
company will be a general partnership since each partner will participate in the management of
the company, and no limited partners - investors - will be involved in the establishment of the
company.

3.4 The Mission

The company’s mission is “to enrich our clients’ traveling experience with an informative and
excellent tour and traveling services”

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 3.5 The Vision

The company’s vision is “to be the most favorable online traveling app for the next generation
of travelers in the middle east region”

4.0 Market Research and Analysis

4.1 Market and Customer Overview

The goal of online travel agencies is to facilitate vacation planning and travel reservation. The
driving forces behind the online travel market are reserving flight tickets and hotel rooms quickly
and easily, increasing consumers’ trust, and enabling the customers to compare different travel
options. Players in the market sell extensive travel services via smartphone apps and websites,
because this way of planning and reserving is one of the favorite means of flight and hotels
reservations, especially among young professionals. The most significant consumer age group in
this market is the age group between 22 and 31 years (Allied Market Research, 2014).

A survey conducted by Travelport Digital found that 58 percent of travelers’ favor using
smartphone apps for searching flights and finding accommodation as the apps provide a
lightning-fast experience. In addition, nearly 35% of travelers utilize the online travel apps to
keep them updated on their flights and reservation, checking-in, boarding passes and getting
discounts or decreases in their travel costs (MacHale, 2018).

4.2 Market Size and Trends

The rapid internet diffusion and growing social media usage have important consequences
among the main factors. The reviews of social media or e-commerce websites allow users to
share their experiences that grant travelers valuable insights when preparing for their trip. The
development and improvement of cloud and app-based applications enhance the online travel
market and create a growing demand for review-based services, budget trip, and hostel services.
This is shown in the significant boost of the online travel market by online travel agencies such
as Trivago, TripAdvisor Inc., Expedia, Inc., and other companies (Sawant, 2019).

6
In particular, Amadeus, a travel technology company, studied and analyzed the online travel
market in the Middle East and found that the online booking and reserving penetration in the
region is low, but it is expected year-on-year growth rate of 14%. Thus, by 2022, it is anticipated
in the study that the online travel market will be 44% of all activities conducted online in the
Middle East, compared to 33% in 2018 (Ameinfo, 2019).

4.3 Market Segmentation and Target Market

What is it meant by market segmentation? Basically, market segmentation refers to identifying

and dividing people to groups based on the similarity of similar needs, wants, and characteristics.
Categorizing the people into groups focuses on the ties connecting individuals together like age,
common activities, the movies they like to watch, or even the magazines they tend to read. There
are countless possibilities for segmentation. Categorizing people in such a way assists companies
to represent and interact more effectively with such groups; thus, promoting cost-effective
operations and establishing targeted marketing decisions (Silk, 2006).

The online travel market is segmented into five categories: the mode of booking, age group,
service types, types of platform, and geography. Firstly, there are mainly two modes of booking
which are direct travel suppliers and online travel agencies. Secondly, the age groups in the
market range from 22 to 31, 32 to 43, 44 to 56, and above 56. Thirdly, vacation packages,
transportations, and accommodations are the service types provided in this market. Fourthly,
mobile and desktop are the platforms that bifurcated the online travel market. Fifthly, the
analyzed geographical regions of the online travel market are LAMEA (Middle East, Latin
America, and Africa), North America (Canada, U.S., and Mexico), Asia-Pacific (Japan, China,
India, and Rest of Asia-Pacific), and Europe (UK, France, Germany, and rest of Europe). (Allied
Market Research, 2014).

4.4 Travelers’ Demographics and Behavior in the Gulf Cooperation Council

(GCC)

According to Polo et al., (2018), the GCC region is classified into three homogenous groups:
GCC natives, Arab non-GCC, and Western and others. The age split reveals that between the

7
ages of 21 and 40 years, 75% of them are travelers. The behavioral activities of GCC travelers as
follow:

 14% of GCC travelers travel with friends

 68% of GCC travelers are married and have children
 57.1% of GCC travelers travel with families
 27% of the household-size has 4 members
 33% of the household-size has 5 or more members
 51% of GCC travelers consider themselves as tech-savvy
 52% of GCC travelers set their traveling budget and look for options, ideas, and good
deals before traveling
 33% of GCC travelers review traveling as a positive activity (Polo et al., 2018).

The target market of the UTravel App will be in the Middle East region, specifically targeting
the travelers of the GCC countries. The mode of booking for UTravel will be online booking;
while the platform used for the services provided by UTravel will be the mobile platform. The
customer base of UTravel will comprise of two groups: GCC natives and Arab non-GCC with
age ranging between 21 and 31. This age group is more inclined to spend more on traveling, and
they extensively use the technology, such as using social media platforms to review various
online travel service providers when planning for a vacation.

5.0 The Economics of the Business

UTravel is an app providing online travel services. Therefore, it incurs less cost of goods sold
and does not carry any inventories. The revenue sources of UTravel are commission paid when
booking via using the app, app advertising revenue, and subscription revenues.

5.1 Revenue Drivers and Gross Margin

UTravel will generate revenue from three sources. Firstly, the source of revenue will be
generated by the 10% commissions gotten when booking flight tickets and hotel rooms via the
UTravel app which is less than the commission gained by the main players in the OTA market.
This source is anticipated to generate 68% of UTravel revenue.

8
 Moreover, another source of revenue will be gained via advertising for hotels, restaurants, and
entertainment places looking to advertise their products and services to UTravel app users. App
advertising is expected to generate 17% of UTravel revenue.

Furthermore, offering subscription plans that provide benefits to the users is another source of
revenue for UTravel. There will be three subscription plans for the app. The first subscription
plan is the silver plan which is for free. The user needs only to create an account. The features of
this subscription plan are booking flight tickets and hotel rooms and renting cars. The silver
subscription plan also enables the users to check the reviews of tourist places written by actual
people who visited these places.

The second subscription plan is the gold plan which will cost $3 if paid weekly or 10$ if paid
monthly. The features offered by this plan are similar to the sliver plan’s features, along with the
feature enabling the users to reserve restaurants and book car parking. The third subscription
plan is a platinum plan which will cost $5 if paid weekly or 18$ if paid monthly. This
subscription plan provides all the features of the gold subscription plan plus the feature of
reserving for birthdays as well as a 10% discount when renting cars. this source of revenue is
expected to be 15% of the company's revenue.

Service Revenues

Service Type Average Average Cost of Contribution Gross Margin

Revenue Per Goods Sold Margin
Transaction
Flight $100 $90 $10 10%
Reservation
Commission
Hotel 50$ $40 $10 10%
Reservation
Commission
Restaurant $2 None $2 100%
Reservation
Commission
Car Rental $30 $27 $3 10%

9
Commission
Advertising $50 $10 $40 90%
Service
Subscription $10 $3 $7 70%
Services
5.2 Expenses

A variety of expenses will be incurred when establishing UTravel Company. The installation of
the reservation system and the establishment of the most appropriate platform for the app will
require capital expenditure. The company would incur fixed and variable operating costs
monthly. The fixed operating costs of the company will include costs of office expenses, systems
expenses, advertising, salaries, and other expenses such as allowance for bad debts, bank fees,
and insurance. These costs are expected to in the first year be $34,500, the second year $69,000,
and the third year $79,350. The varying costs expected mostly to be incurred are booking system
fees depending on sales and other marketing costs which are expected to be 18% to 35% of fixed
costs.

5.3 Calculation of Breakeven Point

The UTravel's break-even point is analyzed by minusing the total of fixed and variable costs with
the contribution margin. As the fixed costs mentioned above, the variable costs are estimated to
be 25% as the marketing costs will be high for the first and second year with expected decrease
in the variable costs to 18% in the third year.

So, in the first year, we expect the number of travelers using our app to 5250 travelers with an
average annual sale of $315,000. The contribution margin gained from all services the app offers
are expected to be 6% of the annual sales. In the second year, we expect the number of travelers
using our app to be 11760 travelers with an average annual sale of $705,600 and contribution
margin of 11.5%. In the third year, we expect the number of travelers using our app to be 13650
travelers with an average annual sale of $987,370 and contribution margin of 12.1%.

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 Break-even Analysis

Year Fixed Costs + Variable Costs Contribution Margin Break-Even Point

2020 $34,500+$10,350 = $44,150 $18,900 Deficit ($25,950)

2021 $69,000+$20,700 = $86,250 $81,144 Deficit ($5,106)

2022 $79,350+$14,283= $93,633 $119,471.77 Surplus ($25,838.77)

Therefore, the company is expected to gain profit in the third year.

6.0 Marketing Plan

The differentiation between competitors is one of the key components of the marketing plan. As
far as marketing is concerned, UTravel has to guarantee increasing the awareness of the
company’s brand and services offered. This means to implement the marketing mix model when
marketing the UTravel app. To create a successful marketing plan, a combination of the product,
offered in the best place (platform) with the best price and promoted in a such way that
convinces the targeted people to purchase the service.

6.1 Product

UTravel App is to be designed to offer an informative and efficient user experience for travelers
to book airline tickets, reserve hotel rooms and restaurants, rent cars, and serve the needs of
customers through the provision of a broad array of customer reviews, tourist places, 3D map of
the tourist places, offers and coupons. What distinguishes UTravel app is the ability to download
the 3D map to use when no internet connection available and shows the percentage of safety of

11
each tourist place to inform the travelers of the places that take advantage of the tourists and
travelers.

6.2 Price

UTravel App has three subscription plans targeted to attract middle-class travelers and upper-
class travelers. For the middle-class travelers, they can subscribe to silver subscription plan
which is for free, and competitive pricing strategy with many options to choose from is adopted
for this plan. To make the prices of the services offered in this plan, only 10% commission
model will be implemented when pricing the services. For the upper-class travelers, two
subscription plans are offered for them which a premium pricing strategy that offers best possible
services and products is adopted for these plans.

6.3 Place

For an online travel agency such as UTravel, the best place to offer its service and products is on
an online platform. Over the last 10 years, as has been seen in many studies, using the internet
and smartphone applications for booking flights and hotel has increased. So, UTravel App will
be available for Android and iOS devices.

6.4 Promotions

As a start-up business, increasing awareness of its existence and its benefits is an essential for the
sustainability and growth of the business. UTravel is a start-up company that will need to
increase its awareness in the market. The marketing channel that will be used to advertise
UTravel app is the digital marketing. The promotional strategies used to reach the target market
are pay per click advertising, social media advertising, public relation such as guest blogging,
search ads, and influencer endorsement.

7.0 Product Design and Development Plan

UTravel will provide its services to the customers through only a mobile app. This app will be
developed to earn commission via connecting the customers with flight, accommodation, car
rental, and restaurant suppliers. The establishment of UTravel is based on selecting the most

12
suitable online reservation systems, review system, and rating system, along with developing an
app that will provide the distribution service.

Utilizing Global Distribution Systems is very important for the success of developing UTravel
app because these systems offer access to a massive number of online reservation airlines, hotel,
car rental, and restaurants suppliers. Therefore, ensuring a standard commission rate. It is also
important to select the most suitable review and rating systems to increase the credibility of the
app and sales of the services.

After selecting the most suitable systems for UTravel app, the step followed is to develop the
app. The app will be developed with user-friendly interface and will consist of 9 core features
which are:

1. Sign-up, social login and profile feature which is important for booking and saving
payment details. (See the appendix for the interface of the app)
2. Searching system which will help users to look for places based on their preferences,
date, budget, and so on.
3. Listings of information for photos, available reservation date, description, customer
review and rules and cancelation policies for each service offered by UTravel app.
4. Chat with hosts to enable users to connect with flight, hotel, car rental, or restaurant
representative if the users have question or inquire.
5. Booking feature to allow users book hotel, ticket, restaurant, and other related services.
6. In-app payment to facilitate paying for the services.
7. Reviews system to enable users of the app discover travelers' opinions and collect the
users' thoughts regarding their actual experience when they use the app's services.
8. Notifications feature to inform the users of new updates, discounts and offerings, and
send reminders before the trip.
9. Currency converter feature to help users convert the prices into their local currencies.

8.0 Operations Plan

To operate effectively, a company must execute its activities in an effective and efficient way. In
the case of a new business like UTravel, the operating plan would include details on the

13
competences that should be established by the company and what steps should be considered to
allow the company to execute the plan adequately.

8.1 General Approach to Operation

8.1.1 Back-Stage

UTravel would need senior managers to establish and operate its business, technical personnel to
build, maintain and manage the app's features, and reservation systems experts to study and
market the online travel services needed to be updated or established. and customer service
representatives to help the app's users. For instance, Shamma will be responsible of financial
oversight; while Leen and Lamees will be responsible for the operations and systems
development

8.1.2 Front-Stage

For selling and marketing the app to the users, employees will be hired to be sales representative
and to be customer service representatives to help the app's users. For example, Rana will be
responsible of managing and overseeing the sales and customer services employees. Maha will
be responsible of managing the marketing department activities.

8.2 Business Location

We will rent a 450 Sqft apartment in Riyadh to be the headquarter of UTravel Company. We
estimated to pay annual rate of $3,550 for the first year with a 50% increase in the rent cost for
the second year, and 10% increase in the third year.

8.3 Equipment

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9.0 Company Structure and Management Team
9.1 Company Structure

Rana - CEO

Rana - CEO

15
 9.2 Management Team

The management members will initially be very small for UTravel Company. The five founders
of UTravel are enthusiastic with the services they provide and encourage on the market. Rana
and Shamma will be the chief executive officer (CEO) and chief financial officer (CFO)
respectively.

Rana Suliman Alghofaily, the CEO, studies at the CBA in princess Nora University in level 4,
she is very interested in business development. Furthermore, she has got many skills related to
this field such as: communication and interpersonal skills, collaboration skills, computer skills,
and sales management skills.

She will be responsible for the execution of strategic plan and process to oversee the sales and
business growth. This means that the CEO will have to establish and secure the suppliers of
hotel, flight, restaurant, and car rental services. However, as a CEO, there is a need for financial
skills which Rana lacks of, and this is where Shamma will step in to manage.

Shamma Alsaab, the CFO, is a student in Princess Noura university majoring in Business
Administration. She has skills on managing sales, financial controlling and business
development which will make Shamma the best fit for the roles of CFO.

Shamma will be responsible for the transaction oversight and the financial management of the
company’s funds to ensure the availability of sufficient funds for on-going operations, the
payment of the outstanding debts, the effective management and investment of the excessive
funds, the provision of the summarized financial report, and the forecast of the future cash flow
needed for expansion and growth strategies. Conducting all of these duties need time
management skills and adaptive skills which Shamma seems to not have these skills. It is advised
to hire financial experts on a contract basis to help Shamma out.

Leen Ahmed Alsubail, the chief technology officer (CTO), is a 4 level student at Princess Nora
University studying business administration, and she has the needed skills in the field of systems
development. Leen will take the responsibility of meeting the needs of Utravel app by
identifying, selecting, and implementing the technological solutions as well as providing the

16
customers with effective services and selecting the most appropriate technologies to control the
costs.

Leen will take the chief technology officer (CTO) role, while Lamees will take the chief
operating officer (COO) role.

However, Lamees, the COO, will take the responsibility of ensuring the development and
execution of operational plan that align with the strategic direction and meet the users' needs of
the UTravel app. This role will consist of overseeing the day to day operation to maintain the
needs of the business.

Lastly, Maha will be the chief marketing officer (CMO) which means Maha will have to
develop, implement, and maintain the overall marketing activities of the business including
market research, product marketing, pricing, marketing communications, public relations and
advertising.

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10.0 Overall Schedule

Date\Even Business Business Industry Business Selected Completed Obtaining

t Conceived Plan and Plan Required App the First
Outlined Market Completed Systems Designing Sale &1st
Research and Accountable
Developmen Receivable
t Payment

27th of Jan,
2020

2nd of Feb,
2020

14th of
Feb, 2020

19th of
Mar, 2020

21st of
Apr, 2020

23rd of
May, 2020

15th of
June, 2020

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In the fourth week of Jan 2020, we came out with the idea of UTravel app as we have found that
the online travel industry is growing rapidly. So, we thought of penetrating this market with
creating an app that serves the increasing demands of online travel services.

We had meetings and discussions for one week that led to the outline of the business plan in 2 nd
of Feb. the outline of the business plan includes the mission, vision, the business model and
concept, and the uniqueness of the app and marketing plan.

During the second week of Feb, we finished conducting industry and market research, and we
identified the existence of opportunities to penetrate the online travel market since there is an
increasing demand in the online travel service.

After we, as a group, finished conducting the industry and market research, we divided the work
into five parts. Each part was taken by each group member. Rana took the responsibility of doing
the economics of the business for the business plan, Shamma prepared the marketing plan, Leen
developed and designed the product, Lamees established the operation plan, and Maha was
responsible to prepare the overall schedule and the financial projection.

We have come to an agreement that to launch our business, we need three months' preparation
for selecting the required systems, designing and developing the app, and getting the required
processes to launch the apps in both android and iOS. So, we expect launching our app by the
end of May, 2020.

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11.0 Financial Projection

UTravel financial projection is aimed at determining the sustainability of the business and setting
a timetable for the company. For this reason, comprehensive financial forecasts have been
prepared for UTravel and comprise of annual pro forma income statement for the first three years
of operations as shown below in the table.

Proforma Income Statement 2020 2021 2022

Revenue
Total Revenue $315,000 $705,600 $987,370
Cost of Sales $296,100 $624,456 $867,898.23

Gross Margin $18,900 $81,144 $119,471.77

Expenses
Depreciation $2,814 $5,670 $5,670
System Fees $8,900 $20,250 $23,945
Salaries $13,800 $25,290 $25,819
Insurance $1,560 $3,198 $5,518
Rent $3,550 $7,275 $8,003
Advertising and Promotion $7,494 $14,526 $11,074
Utilities $1,134 $2,325 $2,558
Office Supplies $648 $1,328 $1,461
Reservation System Fees $3,250 $6,663 $7,330
Professional/Legal Fees $1,000 $2,050 $2,255

$44,150 $86,250 $93,633

Net Income ($25,950) ($5,106) $25,838.77

Statement of Cash Flow   2020 2021 2022

Opening Cash Balance   -  $176,400  $479,808

Cash Inflows
Receivables Current Month/Year $28,410 $198,870 $795,480
Receivables Prior Month/Year $69,290 $762,190 $1,524,380
Loan incoming $250,000 - -
     
$347,700 $961,060

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Cash Outflows  
Payables Current Month/Year $16,575 $120,313 $629,712
Payables Prior Month/Year $110,275 $360,939 $944,568.5
Web Development $44,450 - -
Loan repayments - - -

$171,300 $479,808 $745,579.5

Net Cash Flows $176,400 $479,808 $745,579.5

Closing Cash Balance $176,400 $479,808 $745,579.5

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Proforma Balance Sheet   2020 2021 2022
Assets       
Cash and term deposits   $176,400 $479,808 $745,579.5
Accounts receivable $81,144 $153,538 $311,021

Current Assets $257,544 $633,346 $1,056,600.5

     
 Capital Assets  $65,500 $65,500 $65,500
Acc Depreciation ($4,500) ($7,335) ($10,122)
Capital Assets, net $61,000 $58,165 $55,378
Total Assets

Liabilities and Equity

Accounts payable and accruals $67,268 $99,556 $113,493
Current Liabilities $67,268 $99,556 $113,493
Financing Requirements $250,000 $250,000 $250,000
Long term Liabilities $450,000 $450,000 $450,000
Total Liabilities $317,268 $349,556 $363,493

Equity
Retained surplus (deficit) ($25,950) ($5,106) $25,838.77
Total Liabilities and Equity $298,318 $312,162 $343,106.77

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Statement of Cash Flow   2020 2021 2022
Opening Cash Balance       

Cash Inflows
Receivables Current Month/Year $81,144 $153,538 $311,021
Receivables Prior Month/Year
Loan incoming $257,544 $633,346 $656,600.5
     
Cash Outflows  $65,500 $65,500 $65,500
Payables Current Month/Year ($4,500) ($7,335) ($10,122)
Payables Prior Month/Year $61,000 $58,165 $55,378
Web Development
Loan repayments

Net Cash Flows $67,268 $99,556 $113,493

Closing Cash Balance

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12.0 References
Allied Market Research. (2014). Online Travel Market Size, Share, Industry Analysis - 2022.
Alliedmarketresearch.Com. https://www.alliedmarketresearch.com/online-travel-market
Ameinfo. (2019, May 8). MENA to Become 2nd Fastest Growing Online Travel Market
Worldwide. Www.Ameinfo.Com. https://www.ameinfo.com/industry/travel/mena-to-
become-2nd-fastest-growing-online-travel-market-worldwide
Bezerra, J., Bock, W., Candelon, F., Chai, S., Choi, E., Corwin, J., DiGrande, S., Gulshan, R.,
Michael, D., & Varas, A. (2015, January 15). The Mobile Revolution: How Mobile
Technologies Drive a Trillion-Dollar Impact. Https://Www.Bcg.Com.
https://www.bcg.com/publications/2015/telecommunications-technology-industries-the-
mobile-revolution.aspx
MacHale, D. (2018, March 29). 58% of People Prefer to Use Apps to Search for travel. What
Does That Now Mean for you? Blog-Digital.Travelport.Com. https://blog-
digital.travelport.com/travelport-digital-research-reveals-role-of-mobile-in-travel-0
Maxwell, B. (2011). Business Plan Analysis of a New Venture for an Online Travel
Accommodation Reservation Service (pp. 4–16) [Master Thesis].
Polo, C., Kaddoura, S., Blunden, K., El Deeb, W., & Faraj, M. (2018). Middle East Consumer
Travel Report 2018 (pp. 16–17). A Custom Report Commissioned by: Amadeus,
Tajawal, and Jumeirah.
Raveh, J. (2018, December 6). The Current State of Travel Apps 2018 | Neura - Increase Mobile
Engagement. Neura. https://www.theneura.com/state-of-travel-apps-2018/
Sawant, A. (2019, February 13). Online Travel Market 2019 Global Trends, Size, Opportunities,
Sales Revenue, Emerging Technologies, Industry Growth and Regional Study by
Forecast to 2023. MarketWatch. https://www.marketwatch.com/press-release/online-
travel-market-2019-global-trends-size-opportunities-sales-revenue-emerging-
technologies-industry-growth-and-regional-study-by-forecast-to-2023-2019-02-13
Silk, A. J. (2006). What is marketing? Harvard Business School Press.

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APPENDIX

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