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2006 MODETOUR NETWORK Investor Relations. the Best. Time. ▶MARKET ENVIRONMENT. MODETOUR TODAY. KEY STRATEGY. APPENDIX. MARKET ENVIRONMENT. Overseas travelers. Total Departures. Unit: one million persons. 10.1. 8.8. 7.1. 7.1. 6.1. 5.5. 5.5. 4.7. 3.4. 3.4. 2.6. 2.2. 00. 01.

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the Best

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  1. 2006 MODETOUR NETWORK Investor Relations theBest Time

  2. ▶MARKET ENVIRONMENT MODETOUR TODAY KEY STRATEGY APPENDIX

  3. MARKET ENVIRONMENT Overseas travelers Total Departures Unit: one million persons 10.1 8.8 7.1 7.1 6.1 5.5 5.5 4.7 3.4 3.4 2.6 2.2 00 01 02 03 04 05 Stable Growth in Overseas Travel Industry • faster increase in overseas travelers than economic growth and population increase Year Population Total Departures Overseas travelers Person(1000) Growth Person(1000) Growth Person(1000) Growth 2000 47,008 0.84% 5,508 19.90% 2,167 56.20% 2001 47,354 0.73% 6,084 10.46% 2,647 22.16% 2002 47,615 0.55% 7,123 17.08% 3,442 30.02% 2003 47,849 0.49% 7,085 -0.53% 3,417 -0.70% 2004 48,082 0.44% 8,825 24.55% 4,680 36.94% 2005 48,294 0.42% 10,077 14.19% 5,521 17.97% 2006(e) 48,497 0.42% 11,328 13.86% 6,925 25.43% Source: Korea National Tourism Organization, National Statistics Office

  4. MARKET ENVIRONMENT Social Changes Supporting Growth in Travel Industry Five-day Work Week & Five-day School Week Increase in demand for near destination and short term travel packagesIncrease in individual tour and family tour such as F.I.T and S.I.T Flexible Holiday System Increase in demand for overseas travel Stable demand in high value-added goods of consumer groups unaffected by business cycle Increasing Disposable Income Aging Society Stable consumer group of the package productsPotential purchasers of the high value-added travel goods Based on Baby Boom Generation Strong Korean Won & Expanding seats supplied Higher value than domestic tour

  5. MARKET ENVIRONMENT Stable Growth in Overseas Travel Industry DETAILS 33.6% of all responders over the age of 15 has an experience in traveling abroad in 2005. Having overseas travel experience once: 14.5% is the highest rate. (2004) Korean people have an average 0.68 traveling experience in 2005. Source: Korea National Tourism Organization

  6. MARKET ENVIRONMENT Major Travel Companies’ Dominant Growth • expanded market share of major travel companies resulted from strong competition M/S Trend of Big 4 Travel Companies Other Agencies BIG4 Travel Agencies (Unit: %) M/S of Bing 4 Travel Companies to Overseas Travelers Source: KATA

  7. MARKET ENVIRONMENT Market Share Big 4 Companies’ Customers to Total Travelers Each Company’s Customers to Big4 Companies’ Market Share to the Total Travelers Market Share in Big 4 Companies

  8. MARKET ENVIRONMENT Continuous Increase in SOHO Travel Agencies Outbound Travel Agencies ↑Domestic Travel Agencies ↓ retailers Source: KTA Retailers Having Relations with MODETOUR ↑

  9. MARKET ENVIRONMENT ▶MODETOUR TODAY KEY STRATEGY APPENDIX

  10. MODETOUR TODAY Comprehensive Travel Company with 17-year Experience • nationwide sales network COMPANY PROFILE Nationwide Marketing Network CEO Woo, Chong-woong Capital KRW 4.2 billion Number of Employees Full time regular employees: 600 (as of October 2006) Ilsan Incheon Airport Office Incheon Established on February 14, 1989 Chuncheon Bucheon Suwon Homepage www.modetour.com Anyang Cheonan Cheongju Address Baeknak B/D #188-3 Euljiro-il-ga, Jung-gu, Seoul, Korea Ulsan Daejeon Daegu Jeonju Changwon Major Businesses Travel package sales Airplane ticket sales Busan Gwangju Suncheon

  11. MODETOUR TODAY Initial Founder of Whole Sale Travel Company in Korea Tourism Industry • leading Korean culture of travel after the establishment in 1989 • a large number of retails with high loyalty Number of Overseas Tourists (1 million persons) Secondary Booming Booming Tourism Industry InternalResettlement Overseas Tourists 10 Cited as a “Company with Great Service Quality” by the Ministry of Industry, Commerce, and Energy for 2 Years in a Row Awarded Silver Tower 8 Listed on the KOSDAQ Expansion of BusinessNetwork NationwideIncluding Busan 6 TourismRevenues Established Mode Tour, Korean First Wholesale Travel Company 4 Received Award As an Exemplary Company forPaying Corporate Taxes 2 Selected as the Best Travel Service Company in the Asia-Pacific Region by PATA Trademark Registration ofCompany Logo, MODETOUR 0 80 82 84 86 88 90 92 94 96 98 00 02 04 05 Development of MODETOUR and Korean Tourism Industry Source: National Statistics Office

  12. MODETOUR TODAY Group of Professional Travel Agents • more than 80% of full time employees holding a tourism license • average 4.04 years of full time employee’s continuous service • average 8.9 years of 47 team managers’ continuous service • average 20.6 years of the board of directors’ career in travel industry 69% Industry Avg. MODETOUR 52% 2.7 years Internet Biz 26% 22% 8.3 years Planning/Office 18% 14% 6.4 years Sale Product Planning Under 3 3-5 5 and more 4 years Average Number of Years of Continuous Service in the Industry Average Number of Years of Continuous Service Source: Study on the Work Satisfaction of Employees of Travel Agencies

  13. MODETOUR TODAY Higher Labor Productivity than Competitor • package tourists per employee • lower selling and administration expense per tourist Tourists per Employee Selling and Administration Expense per Tourist (Unit: won) (Unit: persons) (Source: Financial Supervisory Service, KATA)

  14. MODETOUR TODAY Package BD Package Sales Structure Value Added (A) Agent Commission (B) Land Service Fee (C) Value Added (A) Agent Comm. (B) Package Sales Revenue Expenses (Hotel, Coach, Meal, Airlines) not included in financial statement Air-ticket Sales Revenue Air Fare (D) 9% Air comm. (E) Agent Comm. (B) Selling and Administrative Expense 9% Air Commission (E) ☞ According to the business relations, Revenue and Commission reported on financial statement can be changed. Air-ticket Sales Structure Air-ticket Sales Revenue 9% Air Comm. (E’) Air Fare (D’) Selling and Administrative Expense 9% Air Comm. (E’) 70% of Air-ticket Sales Revenue (7% Agent Comm.) 9% Air Commission (E’)

  15. MODETOUR TODAY Sales Structure • a change in the ratio of selling and administrative expense to sales DETAILS Trend in Selling and Administration - Continuous reduction in labor costs - Increase in advertising expense (Stepping up brand marketing) Control on Planned Selling and Administrative Expense - Advertising expense: 5% of sales - Diminish the rate of labor costs to 30% of sales - Regulate the rate of commission to 40% of sales Ratio of Selling and Administrative Expense to Sales

  16. MODETOUR TODAY MODETOUR Tourists and Profits Divided by Destinations China Japan Europe America South-East Asia South Pacific, Guam & Saipan Yearly Tourists Ratio to Destinations Yearly Profit Ratio to Destinations

  17. MODETOUR TODAY MARKET ENVIRONMENT ▶KEY STRATEGY APPENDIX

  18. KEY STRATEGY– prospective effectiveness Internal Innovation to Improve Productivity Enhancing Customer Loyalty and Maximizing Value-added Effective Brand Marketing Activities MARKET LEADER Raising Capital Strength for Promotion Activities (charter business, long term hotel lease, M&A, etc.) Sales Ability Product Planning Skill Overall Processing Skill • Competitive S&A expense per • tourist • Keep our reputation in tourism • industry • Keep the relations with retailers • and the business showings • Build up distribution channels • Implement strategy of Best Partner • Strengthen buying power of • airplane seats • Collecting new information on destination • Taking advantage of business • know-how • Communicating with business • partners (using travel planner • program) • Retaining competent tour • conductors by offering training • and benefits • Cash payment system • Possessing the ability to control • problem occurred in destination

  19. KEY STRATEGY • Brand Marketing • Strategic marketing for building loyalty and positioning brand image • Various sales supporting activities through PPL, CF, CM, Billboard, Best Partner retails • CRM for returning customers → enhancing and improving ability of customer • satisfaction team • Cooperative marketing and business → collecting marketing networks and • sales channels (web portals, mart, etc.) ~ing PLAN Marketing Tool Billboard, PPL Newspaper Advertising Radio, CM TV Commercial launched in October 2006 Various CRM Activities Strengthening the ability of Customer Satisfaction Team

  20. KEY STRATEGY • Online Business • Offering abundant information and qualified various contents • Improving net profit margin through B2BC business • Real time search and reservation system ex) booking engine for Airplane & Hotel • Developing travel solutions and offering service for making web site • On-line travel retailers PLAN ~ing Contents Related Team • Expanding Contents Providing Function to Global Network • Supplementing Specialized Personnel in Contents Part • Strengthening E-COMMERCE • Introducing an Ideal Travel Package, On-line Marketing • Fostering On-line Community Developing & Distributing Booking Services Revenue Increase of On-line retails

  21. KEY STRATEGY • Expansion of Sales Capacity • Best Partner • Maintaining retails with high loyalty through different support • Expanding BP retails with Brand Marketing (TV ad) 26% Supporting Activities Offering MODE magazine and catalog firstly Naming MODETOUR’s PRO Retail Offering MODE CRS and Travel Planner programSupporting improving sales activities - Regular service training - Improving ability to understand products through study tour Being linked with MODETOUR’s web site Offering subsidy when achieving one’s sales goal Operating own call center Promoting cooperatively 11.3% 9.5% 6.6% 4.3% 2004.1 2004.12 2005.6 2005 2006. 3Q Customers from Best Partners

  22. KEY STRATEGY • Expansion of Sales Capacity • Tie-up Business → Expanding alliance sales channels to finance company, • portal website, shopping mall, mart, etc. • Stable expansion of business field by accumulating cooperative business know-how 23% Financial 19.7% 18.8% 13.3% Media & Portal 9.1% Shopping Mall & Large-sized Mart and Leisure 2004.1 2004.12 2005.6 2005 2006.1H Customers from Cooperative Channels

  23. KEY STRATEGY • Diversification of Business • M&A with company having competitiveness and specialized in a specific fields • such as Backpacking, Cruise, Language Study. • Positive charter business and long term lease of resort • Developing new travel destination and gaining semi-exclusive selling right • Enhancing VVIP package sale Expected effect PLAN ~ing • Co-developing and Using Contents • Diversifying Products to Surely Leave • Increase of Members per Group through Expanding • Sales Network & Joint Promotion Equity Investment in Blue Travel Co., Ltd. & Cooperative business Backpacking travel products sale increased in summer 2006 about 80% than 2005. Joint Establishment of TOURTAINMENT Inc. with OLIVE NINE Co., Ltd. and Munhwa Broadcasting Corporation • Coordinating Overseas Location of TV Drama & Movie • Supplying Travel Product Related with the Location Exclusive Shuttle Contract of Managaha Island in Saipan Strengthening Alliance with Companies in Various Fields Expanding Using Funds for Charter FY05 13billion → 2006.7 12.4billion won • Being Competitive in Special Fields • (cruise, language study, etc.) • Improving Product Planning Capacity for VVIP • Gaining Distinctive Sales Channels VVIP Marketing Team (JM Mode)

  24. MODETOUR TODAY MARKET ENVIRONMENT KEY STRATEGY ▶APPENDIX

  25. Appendix CEO/Chairman Name: Woo, Chong-woong Career Background - Koryeo Tour - Director, Seoul Fencing Association, Korea Sports Council SHAREHOLDERS BREAKDOWN President Name: Hong, Seong-geun Career Background - Koryeo Tour - President, Tour Industry People’s Mountain Climbing Club (TMC) Vice president Name: Hong, Ki-chung Career Background - Koryeo Tour - Board of Director of Korea Association of Travel Agents (as of November 2006) Senior Managing Director: Han Ok-min Managing Director & CFO: Sohn Ho-gwon Director: Ji Hyeong-hoon Director: Yang Byeong-seon Auditor: Lee Sang-guk

  26. Appendix Key Financial Ratio GROWTH PROFITABILITY STABILITY ACTIVITY

  27. Appendix Summarized Balance Sheet • Please, be aware of the fact that this financial result in the accumulated third quarter of 2006 is not examined by external auditor so it can be revised according to the result of audit.

  28. Appendix Summarized Income Statement (Unit: a million won) (Air ticket) (Package) (Additional Revenue) (Total) • Please, be aware of the fact that this financial result in the accumulated third quarter of 2006 is not examined by external auditor so it can be revised according to the result of audit.

  29. Thank you. 2006 MODETOUR NETWORKINVESTOR RELATIONS

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