Hotel Internet Distribution Business For Sale;
Posted: November 11th, 2008 Businesses for Sale or Strategic Merger: Aviation Advantage, Inc. currently owns the profitable and quickly growing on line wholesale hotel Internet distribution company Resort Income, Inc. (RIO). More details about RIO and its parent company are available at www.resortincome.com and www.aviationadvantage.com. RIO is the main stream of today's travel distribution environment. RIO’s customers are small to medium sized resorts with an average of 100 rooms that have recognized the need to embrace changes in the travel market place. RIO business model allows hotels to sell room inventories in Expedia, Orbitz, Travelocity and more like the large branded hotel chains without the technology or staffing expense. RIO makes listing hotel properties in Expedia, Orbitz, Travelocity and thousands of other online travel agent sites quick and easy. RIO maintains pricing and availability on a daily basis. RIO reports to their hotel clients bookings immediately so that they can make informed decisions. Client hotels collect full payment upon guest checkout eliminating the current 45+ day accounts receivable giving RIO clients a cash flow advantage in addition to a marketing advantage over similar properties. The company maintains net rate room agreements with client hotels and wholesaler agreements with Expedia, Travelocity, and Orbitz. RIO’s target clientele are 25-500 room hotels primarily in the Caribbean, Mexico, and domestically that are independently owned, or a part of a small chain. These target hotels currently have no existing online production or extremely poor performance. There are approximately 1,250 hotel properties in the Caribbean and Mexico that fall within these parameters and roughly 5,000 domestically. RIO was purchased from an individual who began operations in 2004. The acquisition of RIO was concluded in July 2007 and revenue for the six months of operations in 2007 was $215,000. Revenue for RIO for the nine months ended September 2008 hit $821,000, and is forecast to be approximately $1.1 million in 2008. RIO presently operates at breakeven, with the existing clients providing sufficient income to pay for the technology platforms, accounting, and all other allocated SG&A costs. After 13 months of operation, RIO has five hotel clients producing bookings and five more clients who are awaiting activation in Expedia, Travelocity, and Orbitz. No additional infrastructure is needed to support up to ten new clients and the company expects to be profitable in the
4th quarter 2008. Pro-forma projections through 2012 favor revenue growth of 20%-25% each year with EBITDA margins of 7%-12% annually. RIO has limited competition from other travel enterprises who provide sales distribution for the target market because they require monthly fees or offer similar services if a much larger bundle of services is purchased by the resort. RIO is seeking investors that would be interested in providing resources to greatly expand the marketing efforts in the Caribbean, Mexico, and Central America, either through a strategic merger or outright purchase of RIO from the existing owners. RIO can also be operated from any location for individuals seeking an opportunity for substantial income as a home based business. Please contact Tom Addario taddario@aviationadvantage.com for more information.