A FEASIBILITY STUDY ON

ESTABLISHING A TICKETINGAGENCY

Qollective Progress Multi-Purpose

Cooperative (QPMPC)

CHAPTER I: INTRODUCTION

INTRODUCTION

Philippine tourism increased its revenue by 15% for the year 2014 which is declared by Department of Tourism Secretary Ramon Jimenez in the Philippine Economic Briefing. DOT believes that the market is getting strong including US, EUROPE, and JAPANESE. Events in the Philippines have doubled including the pope visit.

We see this as an opportunity for us to have a profitable business that will also open opportunities for us to increase more our networks and to reach out further to our community where help is needed.

Within the association, with our cause of providing relief, we go to different places extending help and providing some of their immediate needs. Hence, ticketing service is a very good business for the COOP to open and cater the internal needs of the association and COOP and its partners. Instead of going to other agency to book tickets, we thought of providing it on our own. Hence, the idea of opening a ticketing service was birthed.

With proper management and decent mark-up rate, booking tickets can be aprofitable business for to anyone who has the capacity to run it. Once webecome a registered booking agent,we will be granted access to an automatedtransactions between us and the airlines (domestic and international) in orderfor us to provide travel-related services to customers.

A.STATEMENT OF THE PROBLEM

In this regard, the main essence of this study is to establish Ticketing service that offers a reasonable rate of tickets to cater the travel needs of the members,family and close friends. To determine the worthwhile of the study it sought to answer the following aspects:

Marketing Aspect

Who will benefit on the proposed ticketing business?

What method should the business ratify in order to introduce and compete with the existing ticketing agencies?

Management Aspect

How would the business be managed successfully and maintain it?

Technical Aspect

How the business can practically put into effect?

What are the general guidelines or implementing rules under the provisions ofExecutive order No. 120 in relation to RA 7160 other wise knows as the LocalGovernment Code of 1991 on the Devolution of the Licensing and RegulatoryAuthority over certain establishments?

How can the business earn profit and underrate its cost?

B. OBJECTIVE OF THE FEASIBILTY STUDY

To be able to identify the effectiveness of the proposed business in the marketin catering the travel needs.

To be able to formulate the most effective management techniques in operatinga business.

To find out how the business be practically put into effect.

To be able to find effective strategies of increasing the profit of the businesswhile underrating the cost.

C. SIGNIFICANCE OF THE FEASIBILITY STUDY

It is a challenge at the same time a great risk to put up a business. Manyfactors should be considered before considering putting up an establishment.This study would be a great help to people especially to those whose interestare in venturing to be booking agents. The research would inform theresearchers and at the same time, see the risks and benefits of the business.

D. METHODOLOGY

The research methodology to be used in conducting this project study is thedescriptive method of research which helps the researcher since this type ofresearch method concerned with the description of data and characteristicsabout the population that provides an accurate portrayal of the characteristicsof a particular individual, situation or a group in a current trend of theoperation.

Sources of Data

The primary source of data for this study is through research, and conductionof questionnaires and interview from the members of Paglaum Association.

The other sources of data to be used in this study are books, other relatedresearch papers and studies and through the internet.

E. SCOPE AND LIMITATION OF THE FEASIBILITY STUDY

This study signifies analysis of how the ticketing business will run and achieve its projected net sales.

This study will cover the future market which is the members of the PaglaumAssociation, families and friends. It will also consider the guidelines andimplementing rules in running a ticketing agency.

F. REVIEW OF RELATED LITERATURE

Traveling helps a person grow and develop personally. People who came backfrom vacation travels are mostly energized and have a different sense of aura.Our country is reach in natural resources and tourist spots where anyone canrelax.

The Department of Tourism released that Philippines is destination for the year2014. They were awarded by the Travel Trade Gazette(TTG) Asia months beforethey raised the country's profile with its Visit the Philippines Year 2015campaign. With this success, DOT is gearing up its effort to promote Visit ThePhilippines Year 2015 encouraging nationwide participation to build a brightertourism for the country.

In lieu with the DOT campaign, the travel industry is preparing for the visit ofthe Pope on January and the Asia Pacific Economic Cooperation MinisterialMeeting and Leadership Summit which will all happen next year. These eventswill further promote the opportunity of the travel industry to climb more andincrease its revenue.

These are just some of the few lined up big activities that will happen in thecountry and this is a big opportunity for us to be part of the travel industryand establish our name and introduce the mission of the Paglaum Association.

Even though the economy is still its way up, people still have the time andbudget to go to different places especially that airlines are offering hugediscounts like the piso (1) fare to reach more number of people to travel.

G. DEFINITION OF TERMS

1. Global Distribution System (GDS) – A worldwide computerized reservation network used as a single point of access for reserving airline seats, hotel rooms, and other travel related items. This is what the travel agents use

2. VIA Phils – GDS available in the Philippines that is affordable and easy to manage.

3. Reservation - All flight reservations are based on restricted airfares.These fares may require full payment within 24 hours after confirmation orat the time of reservation.

4. Travel - make a journey, typically of some length or abroad.

5. Traveler- the one who makes the travel.

6. Mark-up – is the difference between the cost of a good or service and itsselling price. A markup is added onto the total cost incurred by theproducer of a good or service in order to create a profit. The total costreflectsthe total amount of both fixed and variable expenses to produce anddistribute a product.

7. Gross Sale – Selling price. This is the total amount that will appear inthe customer's ticket

8. Net Income – also referred to as the bottom line,net profit,net pay or netearnings.

9. Flight bookings – that you bought a ticket for a flight on a plane.

10.Booking ticket – is a piece of evidence usually in paper reflecting yourflight details, confirmation number and summary of the amount you havepaid.

11.Flight – the action or process of flying through the air.

12.Connecting flights - That requires the passengers to change from oneplane or airline to another at an intermediate point.

CHAPTER II: MARKETING ASPECT

A. INDUSTRY PROFILE

The proposed project will be introduced with a business name namedQollective Progress Multi-Purpose Cooperative (QPMPC) Ticketing Service . Thebusiness name is based on the name of the COOP. The project will primarilycater the members of the Paglaum Association, its families, close friends andnetworks.

B. DEMAND ANALYSIS

Table 1Demand Analysis

TARGET MARKET POPULATION SIZE PERCENTAGE OVERTHE TOTAL

POPULATION SIZECooperative Members 17 16.67%5 of each member's family and friends

85 83.33%

TOTAL 102 100.00%

The Table 1 shows a total target market of 102 who are members of thecooperative and at least 5 of each member's family and friends who frequentlytravels every month.

C. ESTIMATION OF PRESENT DEMAND

TARGETMARKET

WILLING TOTravel once

a month

PERCENTAGEOVER THE

TOTALPOPULATION

SIZE

UNWILLINGTO Travel

PERCENTAGEOVER THE

TOTALPOPULATION

SIZECooperative Members

17 16.67% 0 0

Outside COOP 85 83.33% 0 0TOTAL 15 100.00% 0 0.00%

Based on the interviews and questions conducted by the proponent, thesummary of the present demand arrived as shown on the Table 2. All membersof the COOP are willing to travel every month either for business, leisure oroutreach. With each member's network, friends and families, we have anaverage of 85 customers who are frequent travelers.

Rebooking and cancellation of flights will be made by the airlines as well as therefund. The ticketing agency will not hold any refund nor cancellation after theticket has been purchased. Such transactions should be dealt with the airline'scustomer service.

D. PROJECTION OF FUTURE DEMAND

Table 3Future Demand

MARKET PRESENTDEMAND (year 1)

ESTIMATEDINCREASE

(year 2)

ESTIMATEDINCREASE (year 3)

PERCENTAGEOF

ESTIMATEDINCREASE

PROJECTEDDEMAND(year 1

+year 2 +year 3)

CooperativeMembers

17 68 272 400% 357

Non-members

85 340 1360 400.00% 1785

TOTAL 102 408 1632 800.00% 2142

The project will prosper in the future based on the figures presented above. Atleast 400% increase of the membership in the coop will happen per year and400% increase in outside coop network.

E. SUPPLY ANALYSIS

Since the nature of the business is booking tickets, the money used to start upthe business is the the ending balance of year 1 earned by the other businessof the COOP which is the lending. The monthly contribution of additionalcapital from the members would help in the increase of the cooperative’scapital.

The project will ensure and will establish good customer service and abruptresponse to all customers for their inquiries.

CHAPTER III: TECHNICAL STUDY

A. DESCRIPTION OF OPERATION AND PROCESS

The business will provide the service of booking both domestic and international tickets for any purpose. It is run by the coop and managed by oneof the members who has the experience in running a ticketing agency. All payments are made thru cash and bank deposit to the agency's account. For the first year, we will not accept credit to cover the expenses and necessary feesfor affiliation to travel associations here in the Philippines and transactions and negotiations will be made through online for the first few months until the COOP will find its space to open an office.

B. PROJECT LOCATION

The proposed location of the project would be at #16 Lacewood Court, South Hills Subdivision, Labangon Cebu City

C.PROJECT EQUIPMENTS, FURNITURES & FIXTURES

Every business cannot operate without equipments, furnitures and fixtures inthe workplace. The proposed equipments, furnitures and fixtures to beacquired before the project is implemented are the following:

EQUIPMENTS, FURNITURES & FIXTURES PRICEOne (1) set of computer P 15,000.00One (1) unit of printer plus scanner 15,000.00One (1) unit of telephone incld. Installationplus internet

2,000.00

One (1) calculator 300.00Three (3) plastic chairs and tables 7,800.00TOTAL PRICE P 40,100.00

These equipments will be used by the employees of the business to ensure thesmooth operation of the business. The proponent suggested having one set ofcomputer for the manager and the three (2) staff. The printer would also beused by the staff. The business must have at least one (1) unit of telephone forand internet connection since this operation is online transaction andtelephone is used to call airlines for inquiries if there is any. One (1) printerwith scanner will be used for scanning important documents and printingplane tickets if requested. And of course, calculators to be used for accountingpurposes.

CHAPTER IV: ORGANIZATIONS AND MANAGEMENT ASPECTS

A. QOLLECTIVE PROGRESS MPC (QPMPC) ORGANIZATIONAL

STRUCTURE

B. PERSONNEL COMPONENT

The business will employ four (3) persons in the office, the manager, ticketingrepresentative and the messender. Duties and responsibilities of eachpersonnel are stated below:

Manager

• She is the one to formulate an effective plan for the company to be wellstructured

• She is also responsible of delegating the tasks to her staff both inbound and outbound transactions, coordinating with the right people involved in the company to meet the day to day operations, staffing and organizingthe whole organization to achieve a systematic process of serving the demands of the clients.

• She is also solely responsible for the manning of marketing and sales andmanaging both the revenue and the cost.

Ticketing Representative

• She is the front desk and primary person to entertain the clientsespecially in addressing the inquiries of the customers.

• She is the one to check the availability of the flight schedule requestedupon by the clients and will push through with the booking and issuingof the plane tickets and job orders for the accommodations andtransportation

Messenger

• He will be the one to do the outbound/external transactions (e.g bank deposits for affiliated accommodations, government agencies involved in traveling like the Philippine Tourism Authority for the tax of children t raveler etc. )

C. PROFILES AND QUALIFICATIONS

Manager

Graduate of any 4 year course,

Not more than 45 years of age

With 2-3 years experience in managing travel agency

Must be computer literate

Ticketing Representative

Graduate of any 4 year course

computer literate

pleasing personality

With 1-2 years experience in related field.

With good communication skills

Messenger

Graduate of any course

Proficient in MS Office

With good communication skills

Entry-Level

CHAPTER V: FINANCIAL ASPECTS

A. CAPITAL CONTRIBUTION

The study shows that in order to establish a Travel Agency, the project musthave at least P50, 000.00 start-up capital. The capital will be from the year 1ending balance of the lending business of the COOP.

B.BASIC ASSUMPTION

The proponent will assume that the 102 present demands will all avail thetravel. On the other hand, the proponent will project 3 noncollectable accounts.This will be the basis for any cancellation and penalty (e.g wrong input ofpassenger details which is subject for correction)

For the purpose of preparing Financial Statements the proponent will assumethat the project will start its first year of operation on the first day of January2016. Other related matters will be based on the current trend such as utilities(electricity & water expenses).

FINANCIAL ANALYSIS

A. OPERATING EXPENSES

The projected monthly operating expenses of the project will be as follows:

Water Expense 500.00

Electricity 500.00

Telephone Expense + internet 3,000.00

TOTAL P 4,000.00

B. SCHEDULE OF SALARIES

To attract qualified employees to fit the position, the company will offer anhonorarium for each applicant. The honorariums of each staff are as follows:

POSITIONS MONTHLY HONORARIUM (PhP)Manager P 5,00.00Ticketing Representative 1,500.00Messenger 1,000.00TOTAL HONORARIA per MONTH P 7,500.00

C. PROJECTED INCOME STATEMENT

C. PROJECTED BALANCE SHEET

Collective Progress Multi-Purpose Cooperative (CPMPC)

Travel/Ticketing Services

PROJECTED INCOME STATEMENT

For the Year Ended December 31, 2016

Year 1 Year 2 Year 3

INCOMESales 300,000.00 571,200.00 1,608,800.00Interest on Bank Deposits 10,000.00 20,000.00 30,000.00

Gross Income 310,000.00 591,200.00 1,638,800.00

Less: EXPENSESHonoraria 90,000.00 135,000.00 175,500.00Supplies 17,000.00 24,000.00 30,000.00Power, Light & Water 12,000.00 18,000.00 24,000.00Bonds 2,000.00 2,300.00 2,500.00Telephones & Internet 36,000.00 38,400.00 42,000.00Depreciation 1,150.00 5,770.00 6,600.00Transportation 3,000.00 4,000.00 5,000.00

Total Expenses 161,150.00 227,470.00 285,600.00

Net Surplus 148,850.00 363,730.00 1,353,200.00

Distributed as Follows:

Statutory Reserves 44,655.00 109,119.00 405,960.00

Amount for PR/IOC 104,195.00 254,611.00 947,240.00

Collective Progress Multi-Purpose Cooperative (CPMPC)Travel/Ticketing Services

PROJECTED BALANCE SHEETAs of Ended December 31, 2016

Year 1 Year 2 Year 3

AssetsCash in Bank 210,200.00 450,000.00 1,700,000.00Cash on Hand 5,850.00 9,980.00 13,380.00Ticketing Software/Capital 120,000.00 240,000.00 350,000.00Office Equipment 21,850.00 26,080.00 19,480.00

Total Assets 357,900.00 726,060.00 2,082,860.00

Liabilities & Members' Equity

LiabilitiesStatutory Reserves 44,655.00 109,119.00 405,960.00Amount for PR/IOC 104,195.00 254,611.00 947,240.00

Total Liabilities 148,850.00 363,730.00 1,353,200.00

Total Members' Equity 209,050.00 362,330.00 729,660.00

Total Liabilities & Members' Equity 357,900.00 726,060.00 2,082,860.00

D. PROJECTED STATEMENT OF CASH FLOWS

FINANCIAL RATIOS

A. CURRENT RATIOSTo determine that the project will settle its short-term obligations, the proponent will calculate the projected current ratio as shown below:

Current Ratio = Current Assets Current Liabilities

Current Ratio = P 357,900/ P 357,900

Collective Progress Multi-Purpose Cooperative (CPMPC)Travel/Ticketing Services

PROJECTED STATEMENT OF CASH FLOWSFor the Year Ended December 31, 2016

Year 1 Year 2 Year 3

CASH INFLOWSales 300,000.00 571,200.00 1,608,800.00Members' Contributions 10,200.00 10,200.00 10,200.00Interest on Bank Deposits 10,000.00 20,000.00 30,000.00

Total Inflow 320,200.00 601,400.00 1,649,000.00

CASH OUTFLOWTicketing Software/Capital 120,000.00 120,000.00 110,000.00Honoraria 90,000.00 135,000.00 175,500.00Supplies 17,000.00 24,000.00 30,000.00Power, Light & Water 12,000.00 18,000.00 24,000.00Bonds 2,000.00 2,300.00 2,500.00Telephones & Internet 36,000.00 38,400.00 42,000.00Depreciation 1,150.00 5,770.00 6,600.00Office Equipment 23,000.00 10,000.00 ---Transportation 3,000.00 4,000.00 5,000.00

Total Outflow 304,150.00 357,470.00 395,600.00

Net Cash Flow 16,050.00 243,930.00 1,253,400.00

Add: Beginning Balance 200,000.00 216,050.00 459,980.00

Total Ending Balance 216,050.00 459,980.00 1,713,380.00

Current Ratio = 1The computed current ratio 1 proves that the business is capable to settle its short-term obligations.

B. PROFIT MARGINNet profit margin is a key financial indicator used to assess the profitability of acompany. Below is the computation of the Net Profit Margin of the business:

Net Profit Margin = Net Income x 100 Revenue

Net Profit Margin = P 148,850/ P 310,100 x 100Net Profit Margin = 48%

The net profit margin of 48% shows that the business can convert revenue into actual profit.

EVALUATION OF PROJECT STUDY

A. RETURN OF INVESTMENTBased on the projected income statement of the business, a total gain of P 310,00.00 was earned while a total operating/administrative expenses of P 161,150.00 was also incurred during the year. To get the ROI, the illustrationis drawn below:

ROI = (Gain from Investment – Cost of Investment) Cost of InvestmentROI = (310,000.00 -161,150.00)/161,150.00 x 100%ROI = 148,850.00/161,150.00 x 100%ROI= 92.36%

As shown on the above computation, it has a 92.36% ROI. Therefore, the project is said to be feasible.

CHAPTER VI: CONCLUSIONS AND RECOMMENDATIONS

Establishing a ticketing service within the coop and close networks is feasibleto the CPMPC. It has 92.36% ROI on its first year and will eventually increaseall throughout the years.

As per the interviews and questions conducted by the proponent, having a ourown ticketing service will make us easier to book and check for any promotionalfares that low cost courier offers. Through this, we can plan our communityoutreach effectively and timely.

Therefore, we conclude as per data gathered and based on the results, it showsthat the project will help and assist the association's need in reaching outremote communities and oppressed population throughout the country. Asidefrom that, it would be easier for us to transport more volunteers and partnersfor us to join in our events and activities.

CHAPTER VII: DESIRABILITY OF THE PROJECT

The primary objective of this study is to determine the feasibility and viabilityof a proposed plan to establish a ticketing business of CPMPC. Part of thisstudy is to be able to shed light to the proponents of this project as to therisks, expenditures, benefits, marketability and profitability of the services.After interpreting the data gathered and concluding that the proposed projectis feasible. We made some financial projections that show a favorable outcome.It has been estimated that after a year of operation the project can enjoy thenet increase of P 148,850

Moreover, this project does not only give a great deal of benefits to theproposing parties but to the society as well. With the establishment of this kindof business, generally, it can contribute to the improvement of the economyespecially in the tourism industry. As projected, the demand for the businesswould increase every year. This implies that the need for more employees wouldincrease thus giving a venue