Saskatchewan Pioneer Saskatchewan Pioneer ChallengeChallenge

By: Cheryl, Deanna, Ryan, and Joleen

Introduction

Mission Offer international tourists an authentic pioneer

adventure in N.E. Saskatchewan.

Offer a unique service to a rapidly expanding market focused on creating new attractions for adventure-seekers.

Industry Overview

Growing demand for immersion travelTourism being re-inventedDesire to get back to the countryPeople want experiences!

The Challenge

2 teamsPioneer suppliesLand raceFind homesteadIndian visitsReward for progressContinue progress

Operations Plan

LocationClose to SaskatoonBordered by

Saskatchewan RiverSurrounded by Forte à

la Corne Forest.

Prince Albert

Melfort

Operations Plan

R.M. of Kinistino 459

1 Quarter Section

Estimated Land Costs = $35,000

~ 25.5% of Total Capital Costs

Land $35,000 Furniture $4,650 Vehicles $59,650 Livestock $14,500 Equipment $16,500 Multimedia $ 6,500 Total Capital $136,800

Total Capital ExpensesFixed Costs Depreciation $12,628 Office utilities $960 Phone $5,300 Land taxes $582 Accounting $5,000 Insurance $4,500 Vehicle maintenance and repair $3,600 Fuel $2,440 Animal maintenance $1,000 Interest $3,000 Marketing $38,600 Salaries $98,537 Total Fixed Costs $166,610 Variable Costs Food and Supplies $10,356.00 Aboriginal demonstration $3,000 Hotel and entertainment $32,400 Total Variable Costs $45,756 Total Operating Expenses $212,366

Total Operating Expenses

Capital Costs $136,800

Operating Costs $212,366

Operations Plan

26

3

2 3

4 5 15 16 17

18 19

31

20

January

September

August

AprilMarchFebruary

JulyJune

October November December

May

Begin scheduling and flight arrangements

Begin scheduling and flight arrangements

Attend TradeshowsAttend Tradeshows

All packages prepaid by March 31

All packages prepaid by March 31

Operating Operating SeasonSeason

Clean-up and demolitionClean-up and demolition

Operations Plan

Two-Week Package $3000

One-Month Package $5000

Two nights at Saskatoon Inn Transportation with 15-passenger van Meals Guided Tours to attractions around Saskatoon

Operations Plan

The Adventure Begins: Arrive in Saskatoon

Fly into Saskatoon Airport

Check-in to Bessborough

Dinner at The Samurai Restaurant

Riverboat Ride

Orientation

Free Time and Tours

Dinner

6:00 Leave for Challenge Site

8:00 Arrive at site

Day 1

Day 2

Day 3

Operations Plan

OrientationVideo presentation of pioneer activities and diary

Outline Objectives:

Site location for shelter and provisions

Care for animals

Break land for crop and garden

Prepare for winter

Safety Measures

Discussion of Contract Agreement

Operations Plan

Typical Site Activities:Highly dependent on weather

spring thaw rain growing season

Equipment and tools of pioneer era MANUAL LABOUR!

Succeeding group activities depend on progress of the previous groups

Operations Plan

End of Challenge: Back to Saskatoon!

Pioneers meet van at pick-up point

Travel to Saskatoon for two nights in Saskatoon Inn

Guests can bathe, relax, and tell stories

Free time and site seeing

Trip to Waneskewin

Depart from airport

New guests arrive

Day 1

Day 2

Last Day

Operations Plan

Additional Events:Indian visits

Trade tools and craft work Teach skills Powwow demonstration

Updates for Web site Videos of progress and activities Personal interviews

Operations Plan

End of Season Site Clean up

Clearing of site with tractor and front-end loader

Salvage lumber and other materialsEquipment and animals moved off siteSeed land to native grass

Human Resources Plan

S u m m e r S tud e n t

A d m in is tra tive M an a g er

D ire c to r/ G e n e ra l M an a g er

Director/ General Manager

Oversee operationsAttend trade showsHire summer studentAppreciation for pioneer lifeExcellent written and verbal skillsBusiness training

Administrative Manager

Administrative duties phone, payroll, and book-keeping

Attend trade showsAccountingExcellent verbal and written skillsBusiness training

Summer Student

Maintain Web page

Video tape pioneers

Pick-up guests

Excellent verbal and written skills

Personnel

Director/ General Manager $40,000Administrative Manager $40,000Summer Student $10,000

Benefits: Employment Insurance, Canada Pension Plan,

Worker’s Compensation, and Health Care

The Market

World Wide AdventuresWorld Tourism OrganizationAdventure Travel SocietyCanadian Tourism CommissionStatistics CanadaMagazines

The Market

UrbanizationUS Economy/low Canadian dollarChange in family structureEconomic activityIncreases in technology

Competition

Saskatchewan competition: Discover La Ronge House boating the Precambrian Shield Follow the Trail of the Fur Trader Historic Reesor Ranch Jack Pine Stables Torch River Ranch

Location Attraction Price (Cdn $)

Great Escape -

Scavenger Hunt*

Sacred sties, best cities,

ancient souks, room service

NA

Colorado Hut to Hut

Llama trekking*

Llama trekking, mountain

biking and backcountry skiing

NA

Outback Australia Four wheel drive outback

adventure

$715/person per day

Torch River Ranch Horseback riding, canoeing,

powwows, rodeos

$950-1100/person/week

House-boating the

Precambrian shield

Fishing, cruise, captain of own

house boat

$1800/person per week

Follow the Trail of

the Fur Trader

Live history lesson, canoe and

camp out

$1000/person per five days

Competition

Unique, authentic, once in a lifetime experience

Low exchange ratePackage includes:

Accommodations and transportation

Educational experience

Customers

Extreme adventure seekers54% Male 50% of all foreign travelers are AmericanIncome over $70,000College educatedParticipated in adventure vacations beforePast purchases at tradeshows

Competitive strategy

Focus marketing on attributes considered important to the customer

Quality and appeal

Smaller number of potential customers ~ have to serve customer’s needs extremely well

Marketing Objectives

Achieve a viable level of sales

Maximize revenues

Sustain financial stability

Continuously enter new markets

Marketing Strategies

Acquire new customers -Serving a narrowly defined target market

-Pre-packaged or standardized services -Providing high levels of customer service -Advertising and promotion -Prestige pricingMaintain customers -Maintain satisfaction -Out do the competition

Price, Revenue & Profit Objectives

Volume Price Revenue Month package 14 people $5000 $ 72,000 2 week package 43 people $3000 $ 129,600 Total $ 201,600

Volume Price Revenue Month package 24 people $5000 $120,000 2 week package 72 people $3000 $ 216,000 Total $ 336,000

60%

100%

Pricing Policy

Market based approachSame price for everyoneUse discounts to generate interest and

awareness at trade showsPrices will depend on demand and costs

Advertising

Internet Interactive web site Link from the Saskatchewan tourism web site

Outdoor Magazines Men’s Journal Outside Magazine

International Trade Shows Rochester, New York Berlin, Germany

Marketing Costs

AdvertisingMagazine Advertising $13,000Brochures/Business cards $600Total Advertising $13,600

Promotion & DevelopmentWeb page $3,000Travel expenses $20,000Trade shows $2,000Total Promotion $25,000

Total Marketing Expenses $38,600

Financing

Long Term Debt $100,000

( 10 years at 3%)

New Equity $100,000

_____________________________________

Total Financing $200,000

Dividends Paid

Dividend Policy:Pay cash over $150,000 in next year

2007 2008 2009 2010 2011$83,009 $90,726 $92,019 $93,020 $94,306

Financial Ratios

Investment Utilization 2002 2004 2006 2008 2011 Total Asset Turnover 1.12 1.37 1.12 1.30 1.59 Fixed Asset Turnover 1 2.32 3.95 7.84 77.86

Leverage Ratios Debt Ratio 0.51 0.36 0.17 0.11 0.00 Debt to Equity Ratio 1.02 0.56 0.20 0.13 0.00

Profitability Ratios Gross Profit Margin -5% 15% 28% 27% 29% Net Profit Margin -5% 12% 23% 22% 23% Return on Assets -6% 17% 25% 28% 37% Return on Equity -12% 26% 30% 32% 37%

Sensitivity Analysis

Effect of Quantity on IRR

70%

100%

85%

115%

130%

21.2

60.9

95.8

113.5

162.5

Effect of price on IRR

20%

10%

-10%

Base

-20%

74.9

5942.6

25.25.5

Break Even Analysis

Price Breakeven as Percentage of Base Case

85%76%80%

100%

base case net income cash Flow Economic

Average Breakeven Capacity

72%64% 61%

90%

Base Case Net Income Cash Flow Economic

ScenariosNet Present Value

196,759

(93,984)

360,225

Base Case

Best Case

Worst Case

Average Annual Cash

9,461.35

24,738.71

19,727Base Case

Best Case

Worst Case

Average Net Income

18,888

57.08

81,960.37

Base Case

Best Case

Worst Case

IRR

96%

0%

42.60%Base Case

Best Case

Worst Case

Summary

Is it Profitable?

Conservative Values

Marketing is CRITICAL

Future Trends