Presentation on theme: "Web Reservations International"— Presentation transcript:
1 Web Reservations International 2006Case Study® 2008,Takefumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher
2 Overview Founder Ray Nolan Web Reservations International websites AffiliatesA brief history of Web Reservations InternationalEOY 2006Mission, Vision, Objectives, Strategies2007New Vision and MissionExternal AnalysisOpportunities & ThreatsCPMEFEInternal AnalysisFinancial DataStrengths and weaknessesIFEFinancial ratiosStrategic AnalysisSWOT MatrixSPACEIE matrixGrand Strategy MatrixMatrix AnalysisQSPMPossible alternative strategiesOur RecommendationStrategiesLong range objectivesImplementation IssuesProposed annual objectives (goal) and policesProposed procedures for evaluationEpilogueResources UtilizedQuestions
3 Ray Nolan – Founder and CEO of WRI Employment HistoryChief Executive Officer and Co-FounderWeb Reservations International LimitedChief Executive Officer and FounderHostelworld.comChief Executive OfficerWRI GroupBooCoretimeBoard Membership and AffiliationsBoard MemberFounderRaven Computing
4 Hostelworld.com is a leading provider of online reservations to the budget, independent and youth travel market. It offers confirmed online reservations for over 12,000 hostels and budget hotels in 165 countries worldwide. The site also offers budget travelers free podcasts, customized city guides, a travel social network and more. Hostelworld.com is headquartered in Dublin and is fully owned and operated by Web Reservations International Ltd (WRI).Headquarters: Sydney, Australia
5 We provide your information to necessary third party service providers when you reserve or purchase travel services through the boo.com website. We also use your details to operate boo.com and, occasionally, to inform you of new features, services and products from boo.com. On occasions, we may supply statistics about our customers to third parties such as hostels or other agents. These statistics never contain personally identifying information. If at any time you believe that boo.com has not adhered to these principles, please notify us via the contact form and we will use all commercially reasonable efforts to determine and correct the problem promptly.
6 WorldRes.com, Inc. (WRES) provides a business-to-business e-commerce solution for online marketing and reservations to the highly fragmented global hotel industry. The Company's Internet-based reservation system connects hotels to travel web sites creating an e-commerce network. This network enables these web sites to provide travelers with the ability to collect information and make real-time, confirmed hotel reservations online. As of February 29, 2000, the Company's network consisted of approximately 11,500 hotel properties in 142 countries and 1,075 travel web sites and call centers as well as over 1,800 web sites that are part of its affiliate program managed by Be Free. As of that date, WRES also had contracts in place to add approximately 12,900 additional properties to its network.NASDAQ: WRES
7 The premier site for hostelling information. Online listings for over 10,000 hostels worldwide.
8 Confirmed online bookings for cheap accommodation worldwide. Trav.com features hostels, cheap hotels, holiday apartments, campsites, bed and breakfasts and guesthouses online. Low rates guaranteed.
9 Our Price Promise We bring you a great selection of properties in cities worldwide ranging in category from 1 to 5-star hotels. Discounthotels guarantee that our Special Internet Rates are the lowest rates you will find online. Our Security All bookings are made securely, in real-time and are guaranteed for you. We use the highest level of encryption to ensure that it is safe for you to use your credit card online. Our Experience Our staff has years of experience in the travel industry. We bring you the best hotels, the best service, and the lowest price.
10 A few of WRI’s 2,500 International Affiliates European online travel agency specializing in worldwide travelLow-fare European airlineglobally trusted and respected source of world travel and destination information and bookingtravel guide series that accompanies the free-spirited on treks across the globeLonely Planet's is one of the best places to seek out advice on a wide range of travelling issues’Our Vision is that every North American traveler will choose us to experience the real Europe by trainCheap Flights - Lowest European Fares, Low Cost Airlineonline travel service that enables students to travel for less.
11 History of Web Reservations International (WRI) Founded by Ray Nolan, is privately held and headquartered in Dublin, Ireland, with offices in Sydney, Australia, San Mateo, California and Shanghai, ChinaOnline travel growth triplesExpansion plans:The recruitment of over 200 hostels and budget hotels each month to the hostelworld.com system, increasing the number of beds available for booking by 14,000 per month.Increased focus on adding activity and tour products for the BIYT market. These include bungee jumping and bus tours. These products will be offered through and new websites.Sponsorship of a US College tour to promote its online booking sites for students.Development of myhostelworld.com system, which provides travelers with full itinerary booking and management.- Best E-Commerce and Best Overall website Spider award
12 History of WRI Continued Hostelworld.com in chosen as 1 of 40 for the world summit award for one of the best sites in the E-business category- Web Reservations International ranked second at the Deloitte Technology Fast 50 Awards Ceremony - Hostelworld.com have won the Emerging Entrepreneur of the Year Award at the 2003 Ernst & Young Entrepreneur Awards in Ireland - WRI acquires Hostels.comReceives investment from Summit Partners, a leading international private equity and venture capital firm-acquired Belgian based Hostels of Europe (450 Hostels)Web Reservations International unveils m-commerce technologyThis service, built on the O2 I-mode platform, makes the company’s budget, youth and independent travel site, Hostelworld.com, and it’s hotel reservations site, WorldRes.com, available to travelers via mobile phones.- Launched a brand new website which specializes in group bookings for hostels all over the world- is acquired
13 History of WRI Continued Hostelworld.com wins Golden Spider for Best Travel Site Best Travel, Tourism and Hospitality website at the tenth Annual Eircom Golden Spider Awards in Dublin- Web Reservations International, one of the world’s leading e-travel reservation companies, today appointed Mark Opzoomer and Brian Dunne to its board as non-executive directors- Hostelworld.Com Celebrates Four Million Unique Hostel Accommodation Bookings
14 2006 Mission/Vision Statement “To provide on-line confirmed bookings for hostels, budget accommodation centers and package tours, as well as comprehensive content such as city and country guides”
15 2006 Strategies and Objectives Technological developmentTo cater to the traveling youth demographic whom are technologically advanced80 percent of youth travelers carry with a mobile phone86 percent travel with a digital camera and a surprising21 percent even take a laptop computer on their tripsExpand and dominate all forms of European travel
16 2006 IssuesHow to continue to maintain its dominant position in the BYIT (Budget, Youth, and Independent Travelers)market and transfer its technology and business model to the low-cost hostel market or other sectors of the travel industryTrust and security in relation to WRI’s 500 web sites and affiliate programsLack of an overall WRI brandingQuick expansion in necessary to acquires competitors market share such as Expedia.Rising fuel costsInflation
17 To be the paramount company for any and all travel desires. A New VisionTo be the paramount company for any and all travel desires.
18 A New MissionWeb Reservations International’s (WRI) mission is to provide booking services for a large array of travel ideas in worldwide destinations. (2,3) We aim to satisfy anyone and everyone from elderly couples searching for retirement locations to youth looking to backpack across an entire continent, no matter what continent that may be. (1,2,3,7) Our innovative websites allow for users to book and compare a surplus of destinations with the click of a mouse. (4) Our knowledgeable and pleasant staff go above and beyond to provide for multicultural assistance and a memorable WRI experience, and are valued for that exact reason. (6,9) We are constantly looking for a way to better our company as a service to our customers as well as generating profits to our investors. (5) WRI has a simple business model where every party in the distribution chain benefits: the property, the partner and, of course, the end customer. (5,6,7) Web Reservations International is aware that a wide variety of travelers exist with many different environmental and social needs and views and we aim to satisfy and cater to every one of them. (8)
19 WRI’s New Mission The new mission answers the following questions Customers: Who are the firm’s customers?Products or services: What are the firm’s major products?Markets: Geographically, where does the firm compete?Technology: Is the firm technologically current?Concern for survival, growth, and profitability: Is the firm committed to growth and financial soundness?Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities of the firm?Self-concept: What is the firm’s distinctive competence or major competitive advantage?Concern for public image: Is the firm responsive to social, community, and environmental concerns?Concern for employees: Are employees a valuable asset of the firm?
24 Profit and Loss Account (December 31, 2006, in U.S. Dollars) FY 2006FY 2005ResultTurnover (Sales)35,946,90528,713,681Increased 7.2MAdministrative Expenses(12,049,219)(8,607,230)Increased 3.4MOperating Profit23,897,68720,106,451Increased 3.8MInterest Receivable and Similar Income424,145181,825Increased 240TInterest Payable and similar charges(2,385,792)(3,374,961)Decreased 1MProfit on Ordinary Activities Before Tax21,936,04016,913,314Increased 5MTax(2,709,848)(2,468,688)Retained Earnings19,226,19214,444,627Increased 4.8M*The currency is converted from EUR to USD (1€ = $1.32) as at December 31, 2006
25 Turnover (Sales) (in U.S. Dollars) Turnover is amounts invoiced for services provided to customers during the yearRest of the world increased $6MTotal turnover increased $7M or 40% mainly due to the sales increase in international
26 Employees and Remuneration Total staff costs increased $900,000Cost per employee increased $6,000 due to the increases in other benefits and share based payments
27 Balance Sheet (in U.S. Dollars) Current liability increased primarily due to the bank loan of $8.6 million. Instead, corporationtax decreased $570,000. The bank loan was secured over certain assets of the company and over certain assets of WorldRes Limited, a subsidiary undertaking.Long-term liability increased due to the redemption of shares.FY 2006FY 2005ResultFixed AssetsTangible assets1,008,421976,391Increased 32TIntangible assets (Domain name)4,304,6124,668,278Decreased 360TFinancial assets (Investment in subsidiary)265SameTotal Fixed Assets5,313,2985,644,934Decreased 330TCurrent AssetsDebtors (Accounts Receivable)13,874,58612,012,814Increased 1.9MCash at bank and in hand913,85717,812,007Decreased 17M14,788,44329,824,822Current Liability(11,308,344)(1,985,739)Increased 9.3MNet Currents Assets3,480,09927,839,082Decreased 24MTotal Assets Less Current Liabilities8,793,39833,484,016Long-term liability-(44,006,376)Decreased 44MProvisions for Liabilities and Charges(474,801)(476,562)Almost sameTotal Net Assets after Tax8,318,59610,998,922Decreased 2.7M*The currency is converted from EUR to USD (1€ = $1.32) as at December 31, 2006
28 Balance Sheet (in U.S. Dollars) Financed By:FY 2006FY 2005ResultCapital and ReservesCalled-up share capital30,44432,325Almost SameShare premium account1,882,7091,789,502Increased 93TCapital conversion reservfe fund337SameProfit and loss account6,403,097(12,821,086)Increased 19MCapital redemption reserve2,009-Shareholders' Fund/(Deficit)8,318,596(10,998,922)Shareholders’ funds recovered from the deficit. During 2005, WRI changed its policy in relation to measurement and recognition of financial instruments. As a result, WRI recognized a liability of $38 million on initial recognition of the financial liability element of the preference share instruments in 2004*The currency is converted from EUR to USD (1€ = $1.32) as at December 31, 2006
29 Internal Audit: Strengths Privately heldCredible CEO (Ray Nolan)Knowledgeable personnel (multicultural staff)Large scale of operationDistribution networkProfitable business model
30 Internal Audit: Weaknesses Lack of public fundingLack of public informationMinimal presence in North AmericaLow profit marginCustomer Loyalty
31 Internal Factor Evaluation Matrix Key Internal FactorsWeightsRatingWeighted Score0.0 to 1.01, 2, 3 or 4Internal Strengths3 or 4Privately held0.1040.40Credible CEO (Ray Nolan)Knowledgeable personnel (multicultural staff)0.080.32Large scale of operationDistribution network30.30Profitable business model0.120.36Internal Weaknesses1 or 2Lack of public funding20.20Lack of public information0.16Minimal presence in North America1Low profit margin0.06Customer loyalty0.04Totals2.86
33 Financial Ratio Analysis (Competitor Comparison 2006)
34 Financial Ratio Analysis (Industry Comparison 2006)
35 Net Worth (December 31, 2006, in Thousands of U. S Net Worth (December 31, 2006, in Thousands of U.S. Dollars Except Per Share Items)1. Stockholders’ Equity + Goodwill = $8,318, ,261,070$11,579,6662. Net Income x 5 = $19,226,192 x 5=$96,130,9603. Share price =N/A4. Number of Shares Outstanding x Share Price =Method Average$53,855,313*The currency is converted from EUR to USD (€1.00 = $1.32) as at December 31, 2006
36 SWOT Matrix WRI SWOT Matrix Strengths – S Privately held / easier to make decisionsSuperb CEO (Ray Nolan)Knowledgeable Personal (multicultural)Large scale operationDistribution NetworkProfitable business modelWeaknesses – WLack of public fundingLack of public informationMinimal presence in North AmericaLow profit marginCustomer LoyaltyOpportunities – OBYIT (Budget, Youth, and Independent Travelers)Go publicGrowing online travel marketRebounding travel industryWorldwide IndustryRetiring baby boomersSO StrategiesGlobal expansion (S3, S5, S6, O3, O4, O5)Advertise / Expand to and (S3, S4, S6, O3, O4, O6)Advertise / Expand to Pacific (S3, S4, S6, O3, O4, O5)WO StrategiesGo public / IPO (W1, W2, O2)Advertise / Expand to and (W3, O3, O4, O6)Agreements with airlines / hotels (W3, W5, O3, O4, O5)Target university students worldwide (W2, W3, O1, O4)Threats – TOil PricesInflationExchange rate volatilityGeopolitical uncertaintyMajor competitors / many competitors (Expedia, Travelocity, Orbitz, Priceline, etc.)ST StrategiesGo Public / IPO (S2, S4, S5, S6, T5)Allow online flight booking (S1, S4, S5, S6, T5)Joint Venture w/ Google (S3, S5, T5)WT StrategiesGo Public / IPO (W1, W2, T5)Allow online flight booking (W5, T5)Advertise low cost hostels and budget deals (W5, T1, T2, T5)Joint Venture w/ Google (W3, W5, T5)
37 Space Matrix Financial Strength rating is 1 (worst) to 6 (best) Ratings1Fixed Assets Turnover5.02Working Capital4.03Return on Total Assets6.04Return on Net Worth5Profit Margin on SalesIndustry StrengthFS Total26.0BYIT market growing (more elderly)Internet travel booking increasingRebounding travel industryFinancial stability2.0Increasing merger and acquisition3.0Environmental Stabilityrating is -1 (best) to -6 (worst)IS Total20.0Competitive pressure-5.0Increase in fuel prices (airline and cruise)-4.0Rate of inflation-3.0Exchange ratesGeopolitical uncertaintyCompetitive advantageES Total-19.0Privately heldCredible CEO (Ray Nolan)Knowledgeable personnel (multicultural staff)Distribution networkEfficient Business Modle-2.0CA total-15.0ES average-3.80CA average-3.00IS average4.00FS average5.20
38 Space MatrixWeb Reservations International is fairly in an aggressive position and has moderate financial strengths in a growing industry.
41 Matrix Analysis Alternative Strategies IE SPACE GRAND COUNT Forward IntegrationX2Backward IntegrationHorizontal IntegrationMarket Penetration3Market DevelopmentProduct DevelopmentxRelated DiversificationUnrelated DiversificationJoint VentureRetrenchmentDivestitureLiquidation
42 Become a Publicly Owned Company (IPO) North American Expansion QSPMKey factorsWeightBecome a Publicly Owned Company (IPO)North American ExpansionAirline AffiliationsASTASOpportunities1 to 4BYIT (Budget, Youth, and Independent Travelers) market growing0.1320.2640.52Go public0.100.4030.301Growing online travel market0.090.270.36Rebounding travel industry0.080.160.240.32Worldwide industry0.050.15Baby boom market0.110.220.33ThreatsOil Prices0.20InflationExchange rate volatilityGeopolitical uncertaintyCompetitorsSubtotal1.002.632.892.28
43 QSPM Strengths 1 to 4 Privately held 0.10 1 3 0.30 2 0.20 1 to 4Privately held0.10130.3020.20Credible CEO (Ray Nolan)40.40Knowledgeable personnel (multicultural staff)0.080.320.24Large scale of operationDistribution networkProfitable business model0.120.480.36WeaknessesLack of public fundingLack of public informationMinimal presence in North AmericaLow profit margin0.060.18Customer loyalty0.040.16Subtotal1.003.443.322.066.076.214.32
44 Possible alternative Strategies Market Development:Look to increase options allowing customers to book hotels for any destination. Add more hotels on the website in South America as well as the US.Market Penetration:Go after Expedia, Travelocity and Orbitz’s market shareProduct Development:Increase the amount of hotels on the site and have a variety of hotels that range in prices all over the World.
45 Possible alternative Strategies We could also look into selling off our company to Google. We can make a pitch to Google explaining how they offer countless amounts of services but do not yet have the booking services that WRI can offer. WRI is a solid company with a network that reaches around the world. We would explain how the industry is constantly growing and how it is becoming more habitual for world travelers to book reservations online. Once our investors and Google have agreed on a price, the deal would be done. The conditions of the deal could include things such as our investors receiving shares in Google.
46 1st RecommendationBecome a Publicly Owned Company-Initial Public Offering (IPO)Get the approval from the Security and Exchange Commission (SEC)Write a S-1 that will describe everything that the company is doing and whyHave the SEC review the S-1, and make any necessary changes if needed, then get an approvalGet our shareholders approval by having our private investors vote on whether they should create the IPO by gathering information from our approved S-1 document.We will look to choose the NASDAQ stock marketOur trading symbol will be WRIFunds will be utilized to build the worth of our company and form a joint venture with Google allowing for the booking of travel reservations on Google.com30% of shares will be given to Google.comStock Price: $15Number of Shares: 2,000,000Cost: $160,000
47 2nd Recommendation North American Expansion Budget: $2 million Expand across the US by getting a larger variety of hotels on our websiteBe able to offer a variety of hotel rooms in every state creating greater optionsExpand more into the Caribbean, Mexico, and CanadaBudget: $2 million
48 3rd Recommendation Airline Affiliations Budget: $3 million Create affiliations with airlines so consumers can purchase plane tickets on our websiteCreate package deals for our consumers that are willing to book flights on the websiteWork with major international tourist destinations to do more business on our websiteBudget: $3 million
49 Implementation Issues Releasing financials to the publicStabilizing the stock price after the IPOAcquiring current investors support for implementing strategiesCreating brand recognition in North AmericaCounteracting increasing travel expenses
50 Proposed Annual Objectives and Policies Increase turnover (amounts invoices for services provided) by 60% annually for the next 3 years5% in Ireland15% in Europe40% in the rest of the WorldReduce staff costs by 20% annually for the next 3 years10% in wages and salaries10% in benefitsTransfer its technology and business model to the low-cost hostel market or other sectors effectivelyProvide adequate funding to R&DAssign technicians to further develop website and software
51 Proposed procedures for evaluation Check reviews & feedbacks through SNS, blogs, and affiliated hotels & hostelsTrack average number of visitors per flagship website and affiliated licensesQuarterly & annual financial reportsQuarterly & annual meetings to evaluate current plan and respond necessary changes
52 EpilogueWorldRes.com partners with Genares worldwide reservation services to provide global distribution system booking engine- WRI opens New York office- Hostelworld.com show that the summer of 2007 was their busiest yet for backpackers- Wayn.com partners with HostelWorld.com to offer members excellent accommodation rates worldwide- HostelWorld.com with Ryanair contract for 5 years- Celebrates 1 million in revenuesPayPal is added to HostelWorld.comHostelWorld.com goes live on iPhoneHostelWorld.com receives a new look- Ray Nolan steps down from CEO position and is replaced by Feargal Mooney. Mooney was previously the Chief Operations Officer since 2002
53 Resources www.webresint.com www.boo.com www.worldres.com Web Reservations International Financial Report 2006msn.money.com