2368 MANAGEMENT CONSULTING LABS | FALL 2016

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VUSALA EYNULLAYEVA

2368

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Agenda

The Project

1 Methodology

2 Tourism in Europe

3 Itinerant tourism

4 Potential itinerant market

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CONTEXT

I N D I E C A M P E R S | M A N A G E M E N T C O N S U L T I N G L A B 3



To measure the size of the potential market in

Europe for Indie Campers



The project will serve for the company’s growth

strategy plan in 2020



Less academic and very direct



A separate project counted within a group



Some data was shared and exchanged with group members

Analyze tourism market in Europe

Analyze itinerant market in Europe Calculate

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COMPANY OVERVIEW

A start-up

company

established by

two friends in

2011 in Lisbon

Target market

is the rent of

campervans

Currently

serving 13

cities located

in Portugal,

Spain, France

Owned 95

campervans

Predicted financials

• Sales 1.5 m €

• Ave. Sales per booking – 1100 €

“

To provide the enjoyable road

travel with low-cost rentals that can

be easily accessible to everyone

”

“ Expand through Europe’s

recreational vehicle market and

dominate it by providing,

sustainable and honest industry

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METHODOLOGY

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METHODOLOGY

Internal

sources

•The company’s database was used to understand

current market size and potential and to forecast

market size

External

sources

• A collective data about tourism, itinerant market in

European countries were collected, sorted analyzed

based the certain indicators

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METHODOLOGY

The company’s database



CRM platform

–

pre-booking process is controlled through this database



Booking platform

–

post-booking process is tracked in this database



Financials

–

Future sales estimations, expansion plan, statistics data provided

by team members of different departments

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METHODOLOGY - EXTERNAL SOURCES



Statistics & reports produced by the European organizations



The different state and government statistics database



The aggregate companies’ official data

External sources

Tourism in Europe

Itinerant Market

The potential

market

volume



Sample: 25 European countries



Indicators: Inbound and Outbound tourism, Domestic tourism, purpose of

visit, destination, seasonality of the visits and arrivals and nights spent at

tourist accommodations



Competitors: direct(campervans) and indirect(motorhomes)



Indicators : RV stopovers, campsites, motorhome ownership, the nights

spent in RV



Calculated based on the market size of Portugal in 2016



The growth of market is projected to be 10%



Evaluation method was suggested by Hugo( Funder, CEO of Indie Campers)

The Analyze

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TOURISM IN EUROPE

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INBOUND TOURISM

 Germany, France, UK, Spain and Italy were the dominant countries in both indicators in the tourism sector among sample European countries. It can be explained by the economic power, airport traffic, natural wonders and historical sites of those countries attract tourist flows

50 100 150 200 250 300 350 400 450

The number of arrivals and nights spent and at tourist

accommodation, in million

Number of arrivals at tourist accomodation

Nights spent at tourist accommodation establishments

Source: Eurostat, 2014

 The countries such as Spain, Italy, Greece, Austria and

Portugal differentiated by its disorder in “nights spent”

trendline. It illustrates that the mentioned countries were visited by less tourists who tended to stay longer

 The opposite case could be seen in the countries such as Germany, UK,Norway and Sweden

 Close proximity neighboring countries makes traveling easier to move from one place to another and results in decreasing days spent in host country, but increasing in the frequency of visits  Airport traffic let have more stopovers thereby

more visitors with shorter period

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INBOUND TOURISM DOMESTIC & FOREIGN

 The ratio helps to better characterize inbound tourism (Domestic&International) considering the size of country

Average nights spent per

arrival

# 𝑁𝑖𝑔ℎ𝑡𝑠 𝑠𝑝𝑒𝑛𝑡 # 𝐴𝑟𝑟𝑖𝑣𝑎𝑙𝑠

 The calculation yields a higher result for Denmark compared to its

neighbors such as Nordic countries, 4 and 2 nights spent respectively

 The order of countries completely changed when considering only the foreign arrivals. UK, Spain, Bulgaria, Greece, Croatia and Ireland

concluded to the highest number of nights spent at tourist

accommodation

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INBOUND TOURISM DOMESTIC & INTERNATIONAL TOURISM

 Domestic travelers in term of tourist arrivals were more active in France and onward countries in the graph recording more than 70%

 However in the rest of countries Foreign tourist occupied more portion of arrivals

0% 50% 100%

Greece Austria Portugal Spain Belgium Czech Republic Italy Switzerland United Kingdom Netherlands France Norway Sweden Germany Poland

Sensitivity on nights spent, %

Domestic

Foreign

Source: Eurostat, 2014 0% 20% 40% 60% 80% 100%

Austria Greece Portugal Belgium Czech Republic Spain Italy Switzerland Netherlands France Norway Poland United Kingdom Germany Sweden

Sensitivity on number of arrivals, %

Domestic

Foreign

 Having inspirational destinations within a country

 Higher standard of living let solve price and access issue

 Seasonal(summer/winter) tourism let attract international visitors to those countries as popular destinations thereby exceed domestic arrivals in the number

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INBOUND TOURISM COASTAL AND NON-COASTAL DESTINATION

I N D I E C A M P E R S | M A N A G E M E N T C O N S U L T I N G L A B 13 Source: Eurostat, 2014

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Nights spent in Coastal and non-Coastal tourist accomodation

Coastal Non-Coastal

 The European countries have coastal area are selected from the sample countries to achieve a fair comparison

 In Portugal, Denmark, Croatia and Greece, the tourists prefered to spend in coastal area of the country by recording 87%, 91%, 94% and 95% accordingly

Following factors can be contributed to the drastic change in proportion of a figure  Some countries popular for their coastal

attractions, beaches, nature and exotic islands, in other words, for developed coastal tourism

 Some countries have smaller coastal area or less inspirational places to offer, so that it leads to dominance in non-coastal area  Some countries have also advantage on

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INBOUND TOURISM SEASONALITY ON THE NIGHTS SPENT

0% 20% 40% 60% 80% 100%

Domestic

Summer Winter

 It could be observed that all countries excluding Switzerland had less than 50% portion of nights spent in winter season. The reason can be that many people have access to a vacation during summer season thereby almost all countries are more active in summer rather in winter

 Switzerland had favorable natural condition for winter and developed winter tourism

 The graph illustrates seasonality in Domestic tourism in each country. Based on result one can conclude how sensitive domestic tourist is to the seasonal change

 from May to October = Summer season

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INBOUND TOURISM SEASONALITY ON THE NIGHTS SPENT

Source: Eurostat, 2014 0%

20% 40% 60% 80% 100%

Foreign

Summer Winter

 The chart displays seasonality in International tourism in each country. It gives an insight on how sensitive the international tourists are to the seasonal change

 The findings based on this graph were a similar result as in the domestic tourism. Less than 50% of total nights spent in winter excluding Switzerland

 However, in detailed, the change between summer and winter was more significant than that in the domestic tourism meaning that a foreign tourist was more sensitive to the seasonal change. The Foreign tourists were prone to spend more nights in summer season

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INBOUND TOURISM DOMESTIC & INTERNATIONAL TOURISM

 The graph helps to compare the records of nights spent by Domestic and Foreign tourists in summer season. It also serves on finding out which market(Domestic & International) dominates during summer season

Source: Eurostat, 2014 0%

20% 40% 60% 80% 100%

Summer

Domestic Foreign

 International tourism overshadowed domestic tourism in the countries in the graph starting from Croatia to Switzerland and by changing from ratio of 94% to 57% respectively. Favorable weather condition, coastline tourism, natural resorts and nature attract tourist flow

 Belgium, Italy and Czech Republic showed the same portion of domestic and international tourism market

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INBOUND TOURISM DOMESTIC & INTERNATIONAL TOURISM

0% 20% 40% 60% 80% 100%

Winter

Domestic Foreign Source: Eurostat, 2014

 The graph helps to compare the nights spent records of Domestic and Foreign tourists in winter season. It also serves on finding out which market(Domestic & International) dominates during winter season

 In comparison to a result in summer season, in winter season the slight changes occurred in the order of countries excluding Greece and Bulgaria. International tourism held its leading position in previous countries in winter season as well. It can mean that the countries are not influenced much by seasonal change. Another explanation can be that domestic people less active on domestic tourism or domestic tourism is not developed in a country. As for the change on result of Greece and Bulgaria, the reason can be that the countries are more developed on summer tourism and attract foreigners with its summer tourism

 Italy kept being a favorite destination for both foreigners and domestics in both seasons

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OUTBOUND TOURISM PURPOSE OF TRIPS

0% 20% 40% 60% 80% 100%

Trips abroad for leisure purpose

Leisure Other Source: Eurostat, 2014

 The chart depicts the percentage of trips made for a leisure purpose by a country of resident in abroad

 On the graph, the countries to the left of Poland tended to spend holidays trips abroad. The percentage varies from 60% to 90% Following factors can considered explanation of a chart

 Higher standard of living exists in a country

 Geographical location(close proximity to other European countries) let them have the cheaper transport modes( a car, a bus, a train etc)  Airport traffic let travelling be easier and cheaper

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OUTBOUND TOURISM DESTINATIONS

I N D I E C A M P E R S | M A N A G E M E N T C O N S U L T I N G L A B 19 Source: Eurostat, 2014

 Data is calculated based on touristic trips(4 nights over) to abroad in the sample countries. Top 10 most visited destinations by the residents of sample country are collected. The countries are listed based on number of times being visited

 The chart illustrates the order of countries most visited and chosen for a holiday destination by the sample countries

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ITINERANT TOURISM ACTIVE COUNTRIES

Source: Eurostat, 2014 - 50.000 100.000 150.000 200.000 250.000 300.000 350.000 Czech Republic Belgium Switzerland Austria Portugal Norway Denmark Sweden Croatia The Netherlands Germany Spain Italy France United Kingdom Others

The number of nights spent in RV and camping grounds, in thousands

The number of nights spent in RV and camping grounds

 Top ten countries with the highest number are considered. The result of the remaining countries is

summarized as Others

 A significant difference could be observed among countries. UK accounted for the highest result(327 388 thousand nights spent) which was three times more than France. France lagged behind UK by recording 109 743 thousands nights spent.

 The graph gives an insight on the existence, popularity and power of itinerant market in those countries  It can be concluded that RV tourism is

more developed in in top five

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ITINERANT TOURISM RESIDENTS & NON-RESIDENTS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

The proportion of nights spent in campgrounds, RV and trailer parks

by residents and non-residents

by resident by non-resident _{Source: Eurostat, 2014}

 The chart illustrates the proportion of nights spent by resident and non-residents in top ten countries where the most nights spent

 The countries in the chart beginning from Czech Republic to Italy displayed more than 50% occupation by residents in RV,

campgrounds and trailer parks by meaning that the residents are active on itinerant tourism in their countries

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ITINERANT TOURISM MOTORHOME OWNERSHIP

I N D I E C A M P E R S | M A N A G E M E N T C O N S U L T I N G L A B 23 30 34 50 55 74 85 205 207 417 450 70

- 100 200 300 400 500 Spain Switzerland Finland Belgium Sweden The Netherlands United Kingdom Italy France Germany Others in thousands

The number of the used Motor Caravans in the country

Source: European Caravan Federation, 2014 Source: European Caravan Federation, 2014

 Motorhome ownership can

considered an indicator of itinerant tourism

 Top ten countries with the highest number is chosen

 Used Motor Caravans per 1000 capital helps to eliminate scale of country

 It could observed that the countries with highest result are Germany, France, Italy, UK and Netherlands

 The list of countries were same in the

result of “number of nights spent in RV, campgrounds and trailer parks”

indicators thereby confirms that those countries mature on itinerant tourism and longer experience of this market

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ITINERANT TOURISM STOPOVERS AND CAMPSITES

180 2.180 4.180 6.180 8.180 France Germany Italy The Netherlands Spain United Kingdom Sweden Norway Denmark Portugal Others campsites motorhome stopovers www.efcohpa.eu, 2016 en.camping.info, 2016

 The number of campsites and motorhomes stopovers existing in each country can serve as an indicator of the scale of potential of itinerant market

 Top ten countries the highest ratio is presented

 It could be seen that the same countries mentioned in the chart excluding Portugal

 However the order of countries changed. France

overshadowed other countries with a significant amount of campsites

 In motorhome stopovers indicator, France, Germany and Italy shows a similar result

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ITINERANT TOURISM COMPETITORS

UK: The market players: Spaceships, Amber Leisure, Just Go, Hire buddies, Bunk Campers Motorhome, Wicked Campers, Camperbug

DE: scheiber-reisemobile, pfaff-camping.at, Adventure Reisen, tour-europe.de, McRent, Bauer Caravaning , DRM Motorhome

FR: Van-it, Vintage Road Trips, Van trippers, Van-Away, Campy Camper, McRent, Camperbug, Evasia Motorhome Hire, Hertz Trois Soleils

IT: Spicy Camper, Freedom Holiday, camperent.it, camperworld.it, Van Italy Campervan Rental, Caravan Campeggio , Meteor Viaggi

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POTENTIAL ITINERANT MARKET

I N D I E C A M P E R S | M A N A G E M E N T C O N S U L T I N G L A B 27 100.000

20.100.000 40.100.000 60.100.000 80.100.000 100.100.000

120.100.000

Potential market size per country, in 2016

_ _{The calculation is}

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POTENTIAL ITINERANT MARKET

24% 18%

17% 11%

5% 5% 3% 2% 2% 2%

12%

France United Kingdom Germany Italy Netherlands Spain Sweden Belgium Austria Croatia Others

0% 5% 10% 15% 20% 25%

Top 10 countries with highest itinerant market portion

Top countries

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FORECAST OF ITINERANT MARKET

439

483

531

584

643

100 200 300 400 500 600 700 800

2015 2016 2017 2018 2019 2020 2021

Projection of market size in 2016-2020, in million

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