Team 7 Vivian Chen | William Frahm | Peter Frankos Brigitte Hackler | Jeffrey Willenzik

Table of Contents

Executive Summary ........................................................................................... 1 I. The Company ................................................................................................. 2

Origins ...................................................................................................................... 2 Objectives ................................................................................................................. 2 Partnership Process .................................................................................................. 2 Management.............................................................................................................. 4

II. The Product .................................................................................................. 4 III. The Market .................................................................................................. 5 IV. Competition ................................................................................................. 6 V. Event Markets and Competition..................................................................... 6
SeaWorld, Orlando: May through July........................................................................ 7 Brickyard 400: Late July ........................................................................................... 7 Austin Formula One: Mid November .......................................................................... 8 Daytona 500: Mid February ....................................................................................... 8 Charlotte Coca-Cola 600 and NASCAR Sprint All-Star: Late May ............................... 9

VI. Sales and Marketing .................................................................................. 10

Brand ...................................................................................................................... 10 Booking Methods..................................................................................................... 10 Advertising .............................................................................................................. 10 Revenue Management ............................................................................................. 11 SeaWorld Pricing .................................................................................................... 12 Major Event Pricing ................................................................................................. 12 Total Revenue Projections Based on Pricing ........................................................... 13

VII. Operations ................................................................................................ 13

Purchasing Containers ............................................................................................ 13 Overseas Shipping of Containers ............................................................................. 14 Shipping Containers by Truck ................................................................................. 14 Timeline of Container Sourcing ............................................................................... 15 Leasing the Trucks .................................................................................................. 15 Insurance ................................................................................................................ 16 Fuel ......................................................................................................................... 16 Purchasing Beds ..................................................................................................... 16 Miscellaneous Furnishings ...................................................................................... 17 Utilities ................................................................................................................... 17 Electricity ................................................................................................................ 17 Purchasing Water .................................................................................................... 18 Storing Water .......................................................................................................... 18 Disposing of Sewage ............................................................................................... 18 Location .................................................................................................................. 18 Off-Peak Storage of Hotel Trucks ............................................................................ 19 Labor Sourcing ........................................................................................................ 20 Labor Costs ............................................................................................................. 21

VIII. Financials ................................................................................................ 22

Valuation ................................................................................................................. 22 Income Statement ................................................................................................... 22 Statement Of Cash Flows ........................................................................................ 23

IX. Implementation Timeline ........................................................................... 26 X. Risks .......................................................................................................... 27

Partnership Risks .................................................................................................... 27 Event Risks ............................................................................................................. 28 Transportation RISKS .............................................................................................. 28 Implementation Risks ............................................................................................. 28

Balance Sheet ......................................................................................................... 24 Breakeven Analysis ................................................................................................. 25 Exit Opportunity ...................................................................................................... 25

XI. Summary ................................................................................................... 28 Appendix I: Partnership Contact Information .....................................................a Appendix II: Organizational Structure ............................................................... b Appendix III: Expanding Events .......................................................................... c Appendix IV: Positioning Triangles ................................................................... d Appendix V: Hotel Unit Construction Contact .....................................................e Appendix VI: Shipping Container Route ..............................................................e Appendix VII: Distances of Initial Events ............................................................ f Appendix VIII: Dates of Year 1 Operations ......................................................... f Appendix IX: Cost Table .....................................................................................g Appendix X: Breakeven Analysis ....................................................................... h Appendix XI: Individual Event Risks ................................................................... i

|1 EXECUTIVE SUMMARY
While looking into the hotel industry, our team discovered a key weakness: stationary hotels experience fluctuating demand and occupancy rates, and must offer low prices at times of low demand. To avoid this problem, we created HotelGo - an innovative mobile hotel. Using semitrucks to transport mobile hotel rooms in shipping containers, HotelGo moves to areas and events with high hotel demand. By partnering with events and locations, such as sporting events or amusement parks, HotelGo capitalizes on high demand and uses the partnership for booking and advertising. HotelGos location within or directly adjacent to high-attendance events creates a key competitive advantage over other hotels. Our brand as a leisure hotel centered on large events provides a convenient location and a fun experience. Although the hotel market experienced a slump during the recession, projections estimate steady growth through 2016. HotelGos competition is other nearby hotels, as two-thirds of leisure travelers stay in hotels. Travelers are extremely price conscious most of their decision is based on the pricing of different hotels.1 Relative to the prices of other hotels during peak demand caused by high-attendance events, HotelGo offers competitive pricing because it has fewer luxury amenities and therefore fewer costs. As a corporation, HotelGo will operate as an individual legal entity. With a small team of five and the goal to become the premier provider of extra accommodations at events with high hotel demand, HotelGo relies heavily on outsourcing and partnerships to support operations. We will acquire the basic hotel rooms, built from shipping containers, from a producer in China and will purchase high quality furnishings from individual retailers. HotelGo provides its own utilities, but can also be integrated into the sites utilities when available. We plan on hiring one general manager and two assistant managers to be on staff at all events. Any additional labor necessary will be outsourced to a temporary labor supplier. Utilizing our five-step dating process to identify and create partnerships, we identified five locations to target within the first year of operations: SeaWorld Orlando, the Brickyard 400 race, the Austin Formula One Grand Prix, the Daytona 500 race, and the Charlotte Coca-Cola 600/Sprint All-Star races. The executive team will also continuously search for new partnerships and venues to service. To attract customers, HotelGo will market primarily through its partner events webpages. Guests can book through two channels: HotelGo.com and packages with partner events through their websites. Projected revenues and costs for HotelGo show potential for high returns in the future. While servicing different events, staff will constantly evaluate the services HotelGo provides and will identify areas for improvement and growth. In the long-term, we see HotelGo expanding to accommodate multiple sets of hotels traveling to meet demand across the entire United States. HotelGo asks for an $800,000 investment in exchange for a 43% stake in the company. These funds will be allocated towards the purchase of a generator and hotel containers, the shipping costs of the containers, and the leasing costs of the trucks. This cash will also cover approximately 57% percent of costs of revenue for the first year while HotelGo is accumulating cash at the start of operation. The $800,000 will provide sufficient capital to acquire the necessary equipment and cover expenses to commence operations.
1

Hotels - US - November 2012. Rep. Mintel Group Ltd., Nov. 2012. Web. 14 Nov. 2013.

|2 I. THE COMPANY
HotelGo undergoes operations as a corporate entity. As a corporation, HotelGo exists as one entity, which protects owners from liability. We chose the corporate structure so that only salaries, not profits, are subject to taxation from Social Security and Medicare.2

O RIGINS
HotelGo stemmed from the realization that stationary hotels must change their rates depending on fluctuations in demand. According to the European Commission, Eurostat, Seasonal fluctuations were particularly high in the tourist accommodation sector where 33.2 % of annual nights spent away were recorded in the two peak months, July and August.3 If a hotel could move to areas of high demand, it could charge a higher rate year round, and would never experience low occupancy. We started exploring the concept of a portable hotel. After researching different innovative accommodation companies from around the world, we discovered Snoozebox, a portable hotel company based in the United Kingdom. Snoozebox proves this concept could work, serving as our inspiration for founding a similar service in the United States. Snoozebox primarily focuses on renting accommodations to racing tracks, setting up its hotels on the infield of various tracks across Europe.4 HotelGo, unlike Snoozebox, will establish partnerships with events and manage the hotels operations independently of the race. As a new concept in the U.S., HotelGos ability to move locations and avoid low occupancy will revolutionize the hotel industry in the U.S.

O BJECTIVES
1. Become the premier provider of extra accommodations at events with excess hotel demand In the short term, we will pursue providing excellent experiences at select venues in the South and Midwest regions of the U.S. We identified five event locations to target in our first year. As we grow, we hope to expand our operations to the entire continental U.S. by creating regional fleets. We must strike a delicate balance between serving the entire continental U.S. while only supplying accommodations during peak demand times in each area. 2. Establish the HotelGo brand as a leisure, event-centered hotel by delivering great experiences at events We will build our brand so that the name HotelGo goes hand-in-hand with large events; this brand establishment will lead to expansion opportunities. By delivering great experiences and providing excellent value to our customers, other large events will hear about HotelGo and start seeking out our partnership. Eventually, events will begin seeking HotelGos partnership themselves.

P ARTNERSHIP P ROCESS
Event and venue partnerships are key to HotelGos strategy and success. HotelGo plans to benefit from the high hotel demand created by concerts, sporting events, and venues with
2 3

"Incorporation." LegalZoom. LegalZoom.com. Web. 2 Dec. 2013. "Seasonality in the Tourist Accommodation Sector." Statistics Explained RSS. 2010. Web. 23 Nov. 2013. 4 "Fast, Flexible Accommodations." Applications. Snoozebox, May 2013. Web. 23 Nov. 2013.

|3
seasonal fluctuations (i.e. amusement parks). Besides providing high demand, a partnership with an event will create three main benefits. First, the partnership will provide HotelGo with an area to set up, likely a parking lot or open area in or near the event. We also plan to use the partnership to advertise through the event webpage and other event outlets. Finally, the partnership will allow guests to book a stay at HotelGo through packages with the event on its website. We developed a five-step process to identify and create partnerships with high demand events. Choosing events and partnerships resembles real-world dating:
1. Knowing who we are and for whom were looking:
Choose an event that strategically matches the strengths of HotelGo: one with excess demand for lodging, with accessible space available for HotelGo to set up, and with attendants matching HotelGos target market. !

2. Speed dating
Reach out to the event partnership department and communicate the benets of a partnership with HotelGo. See Appendix I for contact information.!

3. Choosing what to wear

Create an offer that benets everyone involved: HotelGo, the customer, and the event. This offer should be event-specic. HotelGo may offer more lucrative monetary contracts to events at which it feels it can charge higher booking prices. For events at which HotelGo feels uncertain about reaching full occupancy, it will offer smaller payments to the events.!

4. The First Date

Test the partnership: operate HotelGo at the event and evaluate the partnership. This will include taking customer surveys, determining what worked well, and determining what could be improved. Also, talk to the key people with the event and get their opinions about whether the partnership is mutually benecial. !

5. Building a long-term relationship, looking for other relationships

If the partnership helps both parties to be more protable, grow the relationship and continue the partnership for the next year. Continue looking for more potential partner events, especially those that are similar to current partners. !

|4 M ANAGEMENT
As a flat organization, HotelGo uses a small leadership team to keep costs low and remain quick and agile with strategic decisions. While we developed a formal organizational chart (Appendix II), we predict a good deal of interplay between the different roles. We will hire a general hotel manager and two assistant managers, discussed in more detail in the operations section of this report. The Chief Knowledge Officer (CKO) and the Chief Operations Officer (COO) work together to help the manager and assistant managers. The COO is responsible for the day-to-day planning and logistics and the CKO is responsible for the manager and assistant managers needs and development. Similar cohesiveness is present with any combination of the leadership team members. Title Chief Executive Officer Chief Operations Officer Chief Knowledge Officer Chief Commercial Officer Chief Financial Officer Name Vivian Chen Basic Responsibilities External Affairs Role Description Responsible for building partnerships with events as well as developing investor support. Responsible for long term logistics as well as the planning and operations with each event. Responsible for IT solutions and human capital management as well as codifying and storing knowledge. Responsible for all marketing aspects, including advertising, pricing, communications, and market planning. Responsible for the proper, strategic, and legal management and documentation of finances.

Brigitte Hackler Will Frahm

Logistics

HR & IT

Jeff Willenzik

Marketing

Peter Frankos

Finance

II. THE PRODUCT

HotelGo is a portable hotel structure that moves from place to place to capture excess demand at particular events due to the high popularity and capacity of the events. HotelGo will consist of 11 trucks holding shipping containers. One shipping container houses a front-desk office and rooms for managers, and the remaining ten containers will each hold four guest rooms and bathrooms, totaling 40 guestrooms. We will also refer to these shipping containers as hotel units. The hotels rooms are transported by semi-truck

|5
throughout the country. The rooms feature a queen-size bed, a shower with hot water, and premium toiletries. The HotelGo guest room provides enough luxury and comfort to satisfy guests and keep them coming back, and it allows HotelGo to cut costs by using only necessary space, unlike many traditional hotels. As an event-based hotel, HotelGo travels to events and areas of high hotel demand and creates an experience for the guest that centers on the event or location. We have identified six events (five locations) to target during our first year of operations: SeaWorld Orlando (summer months), the Brickyard 400 race, the Austin Formula One race, the Daytona 500 race, the NASCAR Sprint All-Star race, and the Coca-Cola 600 race. HotelGo will locate itself on the infields of the racing events, or in near-by parking lots. The location and convenience with respect to an event will help attract guests to HotelGo. Guests can expect good service from the time of check in to the time of check out. A hotel manager or assistant manager will be on-site at all times, to resolve any guest questions or concerns. Because guests stay with us for the sole purpose of attending an event, HotelGo does not offer amenities such as breakfast, a restaurant, or spa. By offering guests a great location, good service, and the basic needs for a good stay, and by excluding excess amenities, HotelGo wins with competitive pricing.

III. THE MARKET

Our target market is the United States hotel and motel industry. The hotel and motel industry includes hotels, motels, and other accommodation providers.5 Past market figures and current trends suggest that now is the prime time to tap into this market. Between 2007 and 2009, the hotel industry experienced a slight fluctuation of negative growth attributed to economic recession and higher unemployment rates. However, the subsequent economic recovery enabled the hotel industry to return to its original size by 2012. According to research by both Mintel and Marketline, accelerated growth can be expected through 2017, increasing about 22% to reach a forecast of $171.9 billion in revenues.6 However, the market volume is projected to grow slower, with a projected increase of 8.2% between 2011 and 2016.5 HotelGo sees this as an excellent opportunity to capitalize on the growing market. HotelGo targets the particular consumer segment referred to as the leisure segment. The leisure segment was the most lucrative segment during 2011, with 71.1% of the industrys overall revenue.5 An interesting trend is that unmarried travelers are more likely to stay with family and friends, veering away from traditional travel lodging.6 When choosing where to stay, American travelers consider price to be the most important factor. Other aspects often considered are prior experiences, the proximity to attractions, and in-room Internet access.6 Price is especially important for family travelers, who see coupons and
5 6

Hotels & Motels in the United States. Rep. no. 0072-0520. 2012. Marketline. Web. 13 Nov. 2013. Hotels - US - November 2012. Rep. Mintel Group Ltd., Nov. 2012. Web. 14 Nov. 2013.

|6
promotions as one of their top three planning resources. This trend became more prevalent during the weak economy. HotelGo offers competitive pricing and an excellent location, fulfilling two of these considered factors. The largest hurdle in introducing HotelGo to the market and attracting customers remains the lack of brand recognition and an undeveloped customer base. However, according to Marketline research, innovation is also vitally important when attracting customers.5 In addition to location and price, HotelGo will use its position as a unique and innovative lodging company to differentiate from other offerings and to attract customers.

IV. COMPETITION
The majority of HotelGos competition comes from hotels and motels. Two thirds of respondents to a Mintel market survey had only stayed in hotels and motels when traveling.6 Alternatives to hotels and motels, such as camping and vacation home rentals, do not pose a threat of major competition. These substitutes offer the same basic function of a place to stay, but hotels and motels often provide additional benefits, such as better location and ease of use. Further market research shows that switching to one of the alternatives is often out of necessity rather than choice. As long as HotelGos target consumers are reasonably affluent, the threat from these alternatives remains minimal.5
The pricing of competitor hotels is dependent on the time of year. HotelGo researches the pricing of competitor hotels for each individual location and time period before creating its own prices. Please refer to Event Markets and Competition (page 6) for further detail.

Many components affect how a potential customer views a hotel. Cost effectiveness is the key marketing message. A hotel wants to show potential guests that it offers the best deals. Dealfocused advertisements sometimes feature celebrities who may provide additional appeal. Other advertisements feature the hotels ability to cater to all types of people. Hotel marketing can also emphasize quality customer service, showcasing the lengths to which hotel staff will go to ensure a positive guest experience. Recognizing that parents comprise a large segment of US hotel users, hotel marketers have released ads that highlight their family-friendly offerings. These ads convey the message that the hotels will enable the guest to have a fun vacation with both their inroom and out-of-room offerings.6 In order to draw more consumer interest, hotel marketing showcases benefits other than traditional hotel amenities. For example, ads will feature the hotels connections to local attractions and mascots. Many advertisements also employ the use of creative imagery to make advertisements more memorable.6 For HotelGo to compete in this market, it must focus on its competitive location advantage and relatively low price. Guests will stay at HotelGo because of its location within/directly next to an event and the event-focused atmosphere. HotelGo offers minimal amenities compared to full service hotels, which lowers its costs and allows HotelGo to charge a lower price compared to other nearby hotels. Because of high demand centered around an event, HotelGo can still charge a premium price compared to non-event days.

V. EVENT MARKETS AND COMPETITION

HotelGo plans to partner with six events in five locations in its first year of operations and will expand to additional events as the company develops. The market and competition concerning each initial location are detailed below.

|7 S EA W ORLD , O RLANDO : M AY
THROUGH

J ULY

In its partnership with SeaWorld, HotelGo plans to locate in a parking lot next to SeaWorld Orlando as a trial run of operations in May through July (a season of high demand). SeaWorld is an aquarium, a theme park, and a marine-life zoological exhibition open year-round in Orlando, Florida.7 As an upscale resort, tickets are relatively expensive with prices of $92 per day at the gate.7 SeaWorld Inc. exceeded profit expectations in the current quarter. Projected profits were $92.3 million. The actual profits beat this figure by 19.8% at $120.2 million, with average revenue per consumer up 6.9%.8 This growth shows the opportunity available for HotelGo. In order to make us as competitive as possible at SeaWorld, HotelGo will be offered as part of a vacation package. Currently, SeaWorld offers all-inclusive vacation packages that include all day dining, free dining for kids, and a free night for every two bought at partner hotels. Such packages cost approximately $270 per person.7 HotelGo can feasibly accomplish partnering with SeaWorld because HotelGo would offer guests a closer, cheaper alternative to the already established hotels. Some of SeaWorlds hotel partners are upscale hotels such as the Embassy Suites, Renaissance Orlando, and Hilton Grand Vacation Suites at SeaWorld. SeaWorlds hotel partnerships are based on a three-tiered system: four diamonds (a full service hotel with recreational amenities), three diamonds (a full service hotel with at least one restaurant and room service), and two diamonds (select service hotels that provide great value). Given our value proposition, HotelGo is a two diamond strategic partner for SeaWorld because it provides park-goers a lodging option that is close in location, priced affordably, and sufficiently provides the necessary amenities for an exciting and fulfilling SeaWorld experience.

B RICKYARD 400: L ATE J ULY

HotelGo will set up at the Indianapolis Motor Speedway to partner with the Brickyard 400 during late July. The Brickyard 400 is an annual 400-mile NASCAR race that attracts fans of all interest and income levels. Tickets start at $40 and go up over $150 for premium seats.9 The Speedway offers fans the chance to attain the full racing experience through hotel packages, such as the packages through the Hampton Inn and Hyatt Regency.10 Indianapolis experiences high hotel demand and hotel prices during this race. The Indianapolis Motor Speedway has current lodging opportunities ranging from the affordable Hampton Inn (two nights starting at $375) to the Hyatt Regency (two nights starting at $425).9 These figures include many services such as deluxe motor coaches to the race, official race souvenirs, and motor speedway hall of fame museum passes. Brickyard 400s current and past partnerships provide guidelines for HotelGo to create a similar partnership. HotelGo provides a great

Our Most Popular Ticket Offers | SeaWorld Orlando Tickets." Our Most Popular Ticket Offers | SeaWorld Orlando Tickets. Web. 20 Nov. 2013. 8 Marden, Duane. "SeaWorld Orlando (Orlando, Florida, USA)." SeaWorld Orlando (Orlando, Florida, USA). Web. 19 Nov. 2013. 9 "Kroger Super Weekend." Indianapolis Motor Speedway. Web. 15 Nov. 2013. 10 "2014 Brickyard 400 Packages @ Indianapolis Motor Speedway, Race Tickets and Hotel Travel Package, Crown Royal "Your Hero's Name Here" 400 at the Brickyard." 2014 Brickyard 400 Packages @ Indianapolis Motor Speedway, Race Tickets and Hotel Travel Package, Crown Royal "Your Hero's Name Here" 400 at the Brickyard. Web. 15 Nov. 2013.

|8
alternative to large hotel chains, giving guests an alternative with a great location and fantastic value.

A USTIN F ORMULA O NE : M ID N OVEMBER

We plan to partner with the United States Formula One Grand Prix race hosted at the Austin Circuit of the Americas in Austin, Texas in mid-November. At the 2012 U.S. Grand Prix, 117,429 fans attended the main Sunday race, and 265,000 fans in total attended the three-day weekend.11 Austin area hotels took in $32 million over the event weekend in 2012, triple the amount of the same weekend without the F1 race in 2011.12 The occupancy rate at downtown Austin hotels was 97.8%.12 This ratio of high attendance in relation to limited pre-existing accommodations option shows that HotelGo would capitalize on the high demand. The Austin airport noted 300 private planes during the weekend, and there were 2,546 helicopter rides to the Circuit of the Americas racetrack12, showing that many attendants were affluent. General admission tickets for the three-day event in 2013 cost $169.11 According to a fan social media site, 76% of Formula One fans in the United States are male, and the average age is 27.13 The majority of attendants were polite, mostly middle and working class tourists.14 The global formula-one fan is often of a higher-than-average income bracket.15 This means attendants will be willing to pay high prices for a great hotel location and experience. A partnership between HotelGo and the Grand Prix would benefit all parties involved. The Grand Prix currently offers a service through their website to pick out a hotel for its customers. Many of these are over twenty miles away.16 Race-goers who currently stay in these hotels have to take a shuttle to the racetrack. HotelGo is a great candidate for a partnership with the GrandPrix because HotelGo offers an easy and affordable way for race-goers to stay closer to action. This will also benefit the GrandPrix because keeping race-goers in a closer vicinity to the racetrack will mean more consumption of race-related goods, ultimately resulting in higher revenues for the GrandPrix.

D AYTONA 500: M ID F EBRUARY

HotelGo will partner with the Daytona 500 in Daytona Beach, Florida in mid-February. The 500mile NASCAR race at the Daytona International Speedway was the second largest race attended in the United States in 2011, only behind the Indy 500.17 Tickets start at $69 and go up into the thousands for the best seats. Last year NASCAR estimated the attendance at 250,000.18 Ticket

11

Pease, Alan. "Tickets Now on Sale for 2013 United States Grand Prix Formula One Race at Austin." Autoweek. Crain Communications, 21 Mar. 2013. Web. 14 Nov. 2013. 12 Maxwell, Robert. "Report: 2012 F1 Grand Prix a Success." KXAN. Television of Texas, 8 May 2013. Web. 14 Nov. 2013. 13 "F1 Racing in Austin Assessing US Formula One Audience Potential." Optimal. Optimal, 19 Nov. 2012. Web. 14 Nov. 2013. 14 Whittaker, Richard. "United States Grand Prix Roars off into the Sunset." The Austin Chronicle. Austin Chronicle, 19 Nov. 2012. Web. 14 Nov. 2013. 15 "Motor Racing Formula 1." Rush Sports Marketing and Investment. Rush Group, 2013. Web. 14 Nov. 2013. 16 Circuit of The Americas Provides Transportation Tips for Guests Attending the 2013 FORMULA 1 UNITED STATES GRAND PRIX." Austin Relocation Guide Relocation Blog. Web. 20 Nov. 2013. 17 Smith, Chad. "Hendrick Motorsports." Bleacher Report. 27 Feb. 2011. Web. 15 Nov. 2013. 18 Lewinski, John. "Unveil the NASCAR Experience 2013 Daytona 500." CraveOnline. 5 Mar. 2013. Web. 15 Nov. 2013.

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sales are stronger each year and it is difficult to buy tickets on race day. Daytona International Speedway offers the full experience for fans through the Sprint Fanzone, which gives fans access to the tri-oval in the middle of the race track, autographs, and pre-game entertainment. Opportunities exist for HotelGo to partner with the Daytona 500. The Daytona International Speedway consists of many RV campsites ranging from the inexpensive Geico Park West (11 nights for $585, or $53.18 per night) to the high-end Gecko Shores at Lake Lloyd (11 nights for $2890, or $262.72 per night).19 The Daytona 500 has current partnerships with Holiday Inn, Marriott, and Westin.20 These hotels are miles away from the racetrack; HotelGo would offer a closer location on the infield or in a nearby parking lot, creating a significant competitive advantage.

C HARLOTTE C OCA -C OLA 600 M AY

AND

NASCAR S PRINT A LL -S TAR : L ATE

HotelGo will partner with the NASCAR Sprint All-Star race and the Coca-Cola 600 (an annual 600-mile NASCAR race). Both races take place at the Charlotte Motor Speedway in Concord, North Carolina. The Coca-Cola 600 race occurs over Memorial Day weekend and the NASCAR Sprint All-Star race occurs a week earlier. The Nascar Sprint All-Star Race occurs at the Charlotte Motor Speedway during the weekend prior to the Charlotte Coca-Cola 600. HotelGo will set up at the Speedway in time to include both races. Tickets for the All-Star race are offered in a varying range of prices from $49 up to $84, and also include an alcohol-free family section.21 The Omni Standard hosts hotel packages. Prices for the packages range from $345 for exclusively the Sprint All-Star Race package and $1,275 for the NASCAR Speedweek package.21 These packages include tickets to the race, as well as daily breakfast buffet, and admission to the NASCAR Hall of Fame.21 Tickets for the Coca-Cola 600 start at $49 and go up over $125 for the best seats. Last year NASCAR estimated the attendance at 140,000.22 Lodging opportunities near the Speedway range from the inexpensive Rock City Campgrounds (7 Nights for $125, or $17.85 per night) to the HDTV Infield campsites ($1000 for 7 nights).23 These figures are for RV and motorhome pricing, for which the customer must truck their own accommodations into the Speedway. HotelGo provides a great alternative, allowing customers to experience the race from close proximity in comfort without being required to provide their own lodging.

19

"DAYTONA 500 - Daytona International Speedway." DAYTONA 500 - Daytona International Speedway. Web. 15 Nov. 2013. 20 "Area Hotels Offer Discounted Rates with No Minimum Night Stays for Coke Zero 400 Weekend Powered By Coca-Cola on July 5-6." Area Hotels Offer Discounted Rates. Web. 20 Nov. 2013. 21 "2014 Sprint All Star Race Packages, Charlotte Motor Speedway Travel Package, NASCAR Speedweek." 2014 Sprint All Star Race Packages, Charlotte Motor Speedway Travel Package, NASCAR Speedweek. Web. 20 Nov. 2013. 22 "Coca-Cola 600 Race Recap @ Aaron's Sports." Aarons Sports RSS. Web. 15 Nov. 2013. 23 "Speedway : Camping." Camping. Charlotte Motor Speedway. Web. 15 Nov. 2013.

|10
Currently, the Charlotte Motor Speedway offers promotions with area hotels to reduce room rates to attract visitors.24 A partnership with HotelGo will be attractive to Charlotte Motor Speedway because they are looking for new, innovative ways to bring people out to the race.25 HotelGo would provide a unique approach to lodging at the race in the infield of the track. HotelGo has identified several other partnership options in case it cannot secure these initial partnerships, or for future partnership expansions. Please see Appendix III.

VI. SALES AND MARKETING B RAND

HotelGo will brand itself as a convenient, event-experience hotel. The close proximity of HotelGo to each event will allow guests to maximize their time at the event and never leave the action. Using the brand-positioning triangle (see Appendix IV), we have strong points of difference, regardless of whether it is framed as a hotel or an alternative lodging option in close proximity to the event (trailers, tents). Employing the frame of reference as a hotel, HotelGo has proximity to the stadium or arena that practically no other traditional hotel can match. Setting the frame of reference as a lodging alternative close to the event, HotelGo offers services that a personal trailer simply cannot. These two points of differentiation provide HotelGo a competitive advantage that will be nearly impossible for the competition to imitate.

B OOKING M ETHODS
The two main methods of booking rooms will be through HotelGo.com and partner events websites. This distribution channel mix will allow us to minimize costs while optimizing distribution of the product. Not using online travel agencies, such as Orbitz and Expedia, will lower costs and better allow HotelGo to better control its inventory. OTAs and other third-party booking providers have grown in power over the past five years and are estimated to control 50% of hotel bookings, charging hotels about 15% of room revenue (AH&LA). The advantage that larger hotel chains gain from these distribution methods is more exposure to online hotel shoppers, but HotelGo has a much narrower audience and can avoid many of the costs of third party booking providers.

A DVERTISING
The biggest obstacle facing HotelGo from an awareness perspective is that it will not be sold through online travel agencies such as Expedia and Orbitz (OTAs). Though not using OTAs provides valuable cost savings, it does present the problem of getting people to go to the HotelGo website to make a reservation. In order to overcome this obstacle, HotelGo will have to employ targeted marketing aimed at reaching patrons of the large events with which it will partner. The target market for HotelGo is patrons of the large events where HotelGo will locate. Given the relatively narrow market, the advertising needs to be targeted in order to reduce costs and
24

"Speedway : Media : News Archive." Area Hotels Reduce Room Rates and Waive Minimum Stay Requirements During Charlotte Motor Speedway's May Race Weekends. Web. 20 Nov. 2013. 25 Dunn, Andrew, and David Scott. "Changing Fan Habits a Challenge for NASCAR." ThatsRacin.com: News from NASCAR and Auto Racing World. 23 May 2013. Web. 03 Dec. 2013.

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maximize effectiveness. Because of the nature of what a hotel is, the consumers do not live in a contained geographic area so the advertising much be able to reach patrons of the events, regardless of their domiciles. The primary focus of advertising will be online because that is where most consumers are making their lodging decisions. The two main aspects of the marketing plan are advertising and community involvement. Advertising HotelGo will advertise on the websites of the partner events in order to be on the mind of the consumer at the moment of purchase. For example, Daytona500.com has a banner ad on the actual page the consumer views while purchasing race tickets and packages. By partnering with the event, HotelGo should be able to become a part of certain packages sold by the race. This will have the double effect of being an additional distribution channel while also increasing awareness to people who dont book a package. Partnerships with these events will allow HotelGo to advertise through the event webpages; therefore, we have not calculated an additional cost of advertising, but have included it in the overall percent commission cost of the partnership, as discussed in the Pricing section below. Community Involvement Community involvement is also going to be a critical part of creating awareness for HotelGo. One advantage of having such a narrow target market is that resources can be employed in very niche places. For example, message boards frequented by race enthusiasts have people who spend the resources to travel for these events and need premium lodging. Since HotelGo is a new product, managing the online conversation and reviews will be critical to maintaining the brand image it needs to be successful.

R EVENUE M ANAGEMENT
Acknowledging inevitable no-shows and cancellations, most traditional hotels overbook in order to maximize revenue. HotelGo will not overbook rooms because of the costs associated with underestimating demand. Since HotelGo will be located in markets that don't have enough capacity to meet demand, re-accommodating a guest would be prohibitively expensive. To compensate for not overbooking, the terms surrounding the purchase need to be very strict regarding no-shows and cancellations. For major events, guests will have 24 hours to confirm their reservation after booking. If the room is rebooked, cancellation will result in a fee of 50% the rate paid or $150, whichever is greater. There will be no refund if the room is not rebooked. The rationale for a partial refund in the event of a rebooking is that there is a benefit to having a guest cancel, rather than simply no show since a cancellation creates the opportunity for additional revenue from a rebooking. Extended theme park service (such as the proposed SeaWorld trial period) will have slightly different terms because a single night has less financial importance. Guest will be able to change their reservation until 7 nights prior to the existing reservation. A full cancellation will have the same policy as major events. Since most guests will be leisure travelers, the stringent cancellation terms should not be an impediment to purchase. They terms ensure guests only book rooms when they definitely decide to travel to an event.

|12 S EA W ORLD P RICING

HotelGo will operate at SeaWorld for 90 nights during the summer months. The pricing structure will have 8 different rates ranging from $75.00 to $320.00. These rates are based on competitors prices during past events. Since the rate increases as occupancy increases, the higher the occupancy rate for one night, the higher the average rate will be for that night. For example, at 100% occupancy, the average rate is $207.13, while the average rate is 176.50 at 75% occupancy. Bookings that come through the partnership with SeaWorld will cost 30% of the booking. This cost also includes advertising through the partnership website. Scenario Analysis Best Case Occupancy Rate 45 Nights at 100% 45 Nights at 90% % of Bookings From Third Party Net Revenue 15% $657,087.75 Base Case 30 Nights at 100% 30 Nights at 90% 30 Nights at 75% 25% $571,233.75 35% $495,382.50 Worst Case 45 Nights at 90% 45 Nights at 75%

M AJOR E VENT P RICING

Major events will have two pricing categories, tier 1 and tier 2. Tier 1 pricing will range from $245 to $380 and Tier 2 will range from $280 to $430. These rates are based on competitors prices during past events. The difference between a Tier 1 and Tier 2 event is the price that can be commanded in the market. Events such as the Daytona 500 and Austin Formula One have historically had higher premiums for hotel rooms than the Brickyard400 and Coca-Cola600.26, 27 Since all bookings are required to span the entire or half the event, the occupancy rate will be the same for each night. Scenario Analysis Tier 2 Event (3 Nights) Occupancy Rate % of Bookings From Third Party Net Revenue Best Case 100% 15% 39,336.45 Base Case 90% 25% 33,327.75 Worst Case 75% 35% 26,044.50

26

Dinges, Gary. "Rates for Many Hotels Skyrocket on F1 Weekend." Austin News, Sports, Weather, Longhorns, Business. Austin American Statesman, 20 Feb. 2012. Web. 03 Dec. 2013. 27 Area Hotels Reduce Room Rates and Waive Minimum Stay Requirements During Charlotte Motor Speedway's May Race Weekends. Web. 03 Dec. 2013.

|13
Tier 1 Event (3 Nights) Occupancy Rate % of Bookings From Third Party Net Revenue Best Case 100% 15%
$35,841.15

Base Case 90% 25%

$30,497.25

Worst Case 75% 35%

$23,628.00

T OTAL R EVENUE P ROJECTIONS B ASED

ON

P RICING

Combing the revenue projections for all events gives the best, base, and worst case scenarios for year 1. To estimate revenue for years 2-5, we used a 5%, 3%, and 1% growth rate for best, base, and worst case scenarios
Best Case Year1 Year2 Year3 Year4 Year5 $1,005,586.35 $1,055,865.67 $1,108,658.95 $1,164,091.90 $1,222,296.49 Base Case $867,196.75 $893,212.65 $920,009.03 $947,609.30 $976,037.58 Worst Case $725,576.50 $732,832.27 $740,160.59 $747,562.19 $755,037.82

VII. OPERATIONS
HotelGo has created a detailed operations plan to outline the major steps in creating and operating HotelGo.

P URCHASING C ONTAINERS
HotelGo will buy the hotel containers from Platinum Investment and Development Limited (Bopind) based in Shanghai, China. See Appendix V for details on the company. Bopind specializes in designing, manufacturing, building and trading high-tech and environmentally friendly prefabricated buildings.28 Each container includes four rooms, with each room containing a

28

"Platinum Development Ltd.--Modular Housing, Container House, Prefabricated House, Mobile House, Prefab, Prefab Homes, Solar Kits, Kit House, Apartment, Villa." Platinum Development Ltd. Platinum Investment and Development Ltd. Web. 23 Nov. 2013.

|14
bathroom. The rooms come outfitted with bed frames, windows, doors, bathroom fittings, and other basic features.29 HotelGo will buy 11 containers for $16,000 US dollars each. This comes to a total cost of $176,000 for purchasing the containers.

O VERSEAS S HIPPING

OF

C ONTAINERS

Jessica Zhang, HotelGos contact at Bopind, quoted the lead-time for the containers at about 30 days.29 The ownership of the containers will be free on board (FOB), meaning HotelGo will pay for the transportation of the containers from Shanghai, China to Atlanta, Georgia.30 The containers will be shipped from Shanghai to the Port of Tacoma in Washington State. HotelGo will use the port of Tacoma because the popularity of the port and the speed of a trip from Shanghai to Tacoma. Volume for the Port of Tacoma grew by 59.1% year-over-year as of February 2013.31 APL, a leader in shipping and logistics, quotes a trip from Shanghai to Tacoma to take 12 days.32 See Appendix VI for a map. Shipping from comparable overseas logistics companies are priced as follows: Seabay International Freight Forwarding Ltd. (Shenzhen), $15-45 per cubic meter33 Cooperate Logistics Co. Ltd. (Shanghai), $10-100 per cubic meter33 Global Interlink Logistics Co. Ltd. (Shenzhen), $1-100 per cubic meter33

HotelGo identified Seabay International Freight Forwarding Ltd. as a potential overseas shipping provider because of its affordable prices. To make a conservative calculation, HotelGo assumes the cost for overseas shipping will be $70 per cubic meter. The dimensions of each container measure at 40ft (12.192m) x 8ft (2.4384m) x 8ft (2.4384m).34 This calculates to 72.4911273 cubic meters. Multiplying the total number of cubic meters per container by the conservative estimate of $70 per cubic meter results in a cost of $5,074.38 per container. Expanding this cost to the group of 11 containers results in a total cost of $55,818.17 for overseas shipping.

S HIPPING C ONTAINERS

BY

T RUCK

Once in Tacoma, the containers will be shipped to Atlanta via truck. The route from Tacoma, Washington to Orlando, Florida is a 2,650-mile trip.35 Semi-trucks get between 5.5 and 6.5 miles per gallon.36 The predicted average cost of a gallon of diesel fuel for 2014 is $3.76.37 Therefore,

29 30

Zhang, Jessica. "Bopind Price Quotation Enquiry." E-mail interview. 21 Nov. 2013. "40ft Container House, Shanghai Platinum Development Co., Ltd." Alibaba.com. Alibaba Group. Web. 23 Nov. 2013. 31 "Port of Tacoma Container Volume Soared in February." International Trade and Shipping News. Journal of Commerce, 21 Mar. 2013. Web. 23 Nov. 2013. 32 "APL: Routes - Asia-North America." APL: Routes - Asia-North America. NOL Group, 30 Sept. 2013. Web. 23 Nov. 2013. 33 "Showroom Transportation." Shanghai Sea Shipping Container To Tacoma Suppliers and Manufacturers at Alibaba.com. Alibaba Group, 23 Nov. 2013. Web. 23 Nov. 2013. 34 "Ocean Container Dimensions." Ocean Container Dimensions. Foreign Trade On-line. Web. 23 Nov. 2013. 35 "Tacoma to Orlando - Google Maps." Google Maps. Google, 23 Nov. 2013. Web. 23 Nov. 2013. 36 Tannert, Chuck. "Why a 10 MPG Peterbilt Semi Is a Really Big Deal." Road Track. Hearst Communications, 4 Apr. 2013. Web. 14 Nov. 2013. 37 "What Are Projected Diesel Fuel Prices for 2013 and for 2014?" Frequently Asked Questions. U.S. Energy Information Administration, 22 Aug. 2013. Web. 14 Nov. 2013.

|15
assuming an average mileage of 6 mpg, the cost of gas for 11 trucks to drive from Tacoma to Orlando is $18,267.33. Truck drivers will be paid at an hourly rate. The hourly distance between Tacoma, WA and Orlando, FL is 53 hours.35 Therefore, HotelGo will pay drivers for 53 hours of driving, plus any additional costs for breaks and overnight trips. To account for fees from a staffing agency, HotelGo will estimate wages at the 75th percentile. The Bureau of Labor Statistics cites the 75th percentile wage for tractor-trailer truck drivers at $22.86 per hour.38 By multiplying the number of hours by the number of truck drivers and the 75th percentile wage per hour, HotelGo calculates the total driver cost to equal $13,327.38. The total cost of shipping the containers by truck is the cost of gas plus the cost of the drivers. This total equals $31,594.71.

T IMELINE

OF

C ONTAINER S OURCING

After ordering the containers from Bopind, it will take 30 days for them to build the 11 containers. Shipping the containers from Shanghai, China to Tacoma, WA, U.S. will take 12 days. Assuming a driving speed of 50 mph and abiding by the regulations that say drivers can only drive for 11 hours a day,39 it will take 53 hours to cover the 2,650 miles from Tacoma, WA to Orlando, FL and therefore require 5 days of travel. This means that if everything goes perfectly according to plan, it will take 47 days from order to receipt of the containers.

L EASING

THE

T RUCKS

HotelGo will lease 11 semi-trucks. The average cost per month to lease a semi-truck ranges from $1,000 to $2,500 per truck per month.40 To use a conservative estimate, HotelGo assumes a cost of $2,000 per truck per month. This comes to a total monthly lease payment of $22,000. Assuming a time horizon of 5 years (60 monthly payments) and using a 1.3%41 one-year treasury constant maturity as the risk-free rate, the present value of the truck lease payments equals $1,315,648.25. HotelGo will lease the trucks from a large national truck leasing company such as one of these companies: AmeriQuest Transportation Services42 IdeaLease of North America43 PacLease Truck Leasing44

38

"Occupational Employment and Wages, May 2012: 53-3032 Heavy and Tractor-Trailer Truck Drivers." Bureau of Labor Statistics. United States Department of Labor, 29 Mar. 2013. Web. 8 Nov. 2013. 39 "Hours of Service Rules." Summary of Hours-of-Service (HOS) Regulations. Federal Motor Carrier Safety Administration, 1 July 2013. Web. 25 Nov. 2013. 40 Smith, Ashley. "How Much Does It Cost to Rent or Lease a Semi Truck?" Commercial and Construction Vehicles. CostOwl.com, 23 Nov. 2013. Web. 23 Nov. 2013. 41 "Treasury Securities." Treasury Bills. Bankrate Inc., 20 Nov. 2013. Web. 25 Nov. 2013. 42 "Commercial Truck Rental & Leasing." Commercial Truck Leasing & Rental. AmeriQuest Transportation Services. Web. 25 Nov. 2013. 43 "Commercial Truck Leasing." Idealease Inc - Commercial Truck Leasing. IdeaLease Inc. Web. 25 Nov. 2013. 44 "Transportation Solutions." PacLease Truck Leasing. PACCAR Leasing Company. Web. 25 Nov. 2013.

|16 I NSURANCE
HotelGo will invest in property and casualty insurance to protect its hotel business. Because hotels typically spend between 1% and 3% of revenue on this type of insurance,45 HotelGo estimates hotel insurance costs at 2% of revenue. As HotelGo will lease 11 semi-trucks, it must invest in truck insurance. The leasing operator typically covers primary liability and cargo insurance, so HotelGo must cover physical damage insurance and non-trucking use liability insurance itself.46 These costs will likely be $2,850 per truck,46 totaling $31,350 per year for insurance for all 11 trucks.

F UEL
HotelGo must buy diesel fuel to drive the tractor-trailer trucks from one event location to the next. Because the trucks will be driven long distances between events, the truck drivers will purchase fuel when needed at diesel gas stations along the route. Semi-trucks get between 5.5 and 6.5 miles to the gallon.47 The predicted average cost of a gallon of diesel fuel for 2014 is $3.76.48 The total mileage driven between HotelGos initial events is 4,195 miles. Please see Appendix VII for a breakdown of distances. Therefore, assuming an average mileage of 6mpg, the cost for 11 trucks to drive to these five initial markets is $28,917.53.

P URCHASING B EDS
Bed frames are built into the containers. Bopind offers containers with one bed and containers with bunk beds. HotelGo will start by buying single bed containers. HotelGo must purchase mattresses separately. The bed frames are made for queen size beds.29 Consumersearch ranked a Tempur-Pedic bed as one of the Best Reviewed in their mattress review report.49 TempurPedic beds can reduce pain--the perfect end to a long day at the track or other big event. TempurPedic beds also have an excellent warranty.49 Amazon.com currently offers a deal on the mattresses. The Sleep Innovations 12-Inch SureTemp Memory Foam Mattress normally sells for $1,899.99. However, Amazon.com is currently selling the mattress with a 20-year warranty for $418.98. This is a savings of 78%, or $1,481.01 per mattress.50 Because one room of the 44-room fleet will serve as the office and front desk for the hotel, HotelGo will need 43 beds. If HotelGo capitalizes on this deal, it will cost a total of $18,016.14 to purchase beds.

45

Halloran, Paul. "Controlling Hotel Insurance Costs: Five Easy Tips That Can Help Control Insurance Costs for Your Hotel." Asian American Hotel Owners Association. Asian American Hotel Owners Association. Web. 1 Dec. 2013. 46 "Trucking Insurance." Overdrive. Overdrive Magazine, 12 Dec. 2008. Web. 1 Dec. 2013. 47 Tannert, Chuck. "Why a 10 MPG Peterbilt Semi Is a Really Big Deal." Road Track. Hearst Communications, 4 Apr. 2013. Web. 14 Nov. 2013. 48 "What Are Projected Diesel Fuel Prices for 2013 and for 2014?" Frequently Asked Questions. U.S. Energy Information Administration, 22 Aug. 2013. Web. 14 Nov. 2013. 49 "Tempur-Pedic." Mattress Reviews. Consumersearch, Apr. 2013. Web. 23 Nov. 2013. 50 "Sleep Innovations 12-Inch SureTemp Memory Foam Mattress 20-Year Warranty." Amazon.com, Inc., 23 Nov. 2013. Web. 23 Nov. 2013.

|17 M ISCELLANEOUS F URNISHINGS

HotelGo will budget $300 per room for miscellaneous furnishings. These include but are not limited to: wifi, art, a desk, air conditioning, and possibly other furniture. These items will be vital to the guest experience but it is difficult to predict future prices as well as what will actually go best in the rooms from an interior design perspective. HotelGo plans to order these furnishings once the containers arrive in Orlando, Florida. That way, HotelGo management will be able to see what the rooms look like and can order the correct pieces of furnishings for the rooms. The total cost of miscellaneous furnishings is $13,200.

U TILITIES
The big question for HotelGo is, What about the utilities? How will you handle water, electricity, and sewage? This is the beauty of the HotelGo concept: everything is handled within the design of the containers. The design of the containers enables the structure to be entirely selfsustaining. The events will not have to provide for water, electricity, or sewage in order for HotelGo to operate. Generators provide the electricity. Water tanks provide the water throughout the event. Sewage tanks store the sewage. Of course, the structure contains plugins if events are willing to provide electricity and/or water. HotelGo knows this design is possible and profitable because Snoozebox uses this same setup.51

E LECTRICITY
The average annual energy consumption per room for hotels is 22,371 kWh (kilowatt-hours).52 Dividing this by 365 days in a year calculates to a daily energy consumption of 61.29 kWh per room. Multiplying this daily energy consumption per room by HotelGos 44 rooms equals a total daily energy consumption of 2696.78 kWh. Multiplying by 1000 gives the total daily energy consumption in Wh. Dividing this total daily energy consumption by 24 hours in a day equals 112,365.75 W (watts). This is the rate of power needed per day to run HotelGo with 44 rooms. These are some of the many options for generators: Perkins 140-175 kW diesel generators without enclosure - $21K-$25K53 Hardy Diesel generators powered by John Deere with enclosure - $32K-$52K53 Central Maine Diesel 100 kW generator with enclosure - $17K-$23K54

The Central Maine Diesel 100 kW generator appeals to HotelGo because it is touted for its quiet running and is suitable for continuous use. HotelGo will conservatively budget $30,000 for purchasing a generator. The Central Maine Diesel 100 kW generator consumes 6.1 gal/hr when running at full load.54 Multiplying this figure by 24 hours in a day equals 146.4 gallons per day. The predicted average cost of a gallon of diesel fuel for 2014 is $3.76.48 If HotelGo uses 146.4 gallons at $3.76 per gallon, the diesel gasoline for the generator will cost $550.46 per day. HotelGo will operate for
51 52

"Questions & Answers." Snoozebox, May 2013. Web. 25 Nov. 2013. Su, Bin. "Hotel Design and Energy Consumption." Engineering and Technology. World Academy of Science, 2 July 2012. Web. 25 Nov. 2013. 53 "Hardy Diesel Generators." Large & Industrial Diesel Generators 120-250kw. Hardy Diesel, 25 Nov. 2013. Web. 25 Nov. 2013. 54 "100,000 Watt Diesel Generator with Sound Enclosure." 100,000 Watt Diesel Generator with Sound Enclosure. Generator Sales, 25 Nov. 2013. Web. 25 Nov. 2013.

|18
117 days in its first year. This calculates to $64,404.29 for the total cost of diesel gas for the generator in the first year.

P URCHASING W ATER
The average daily water consumption per room for a hotel is around 120 gallons.55, 56 Multiplying this by the total number of rooms gives a conservative estimate of 5,280 gallons per day. The average price of water in the U.S. is $1.50 for 1,000 gallons.57 Using this price ratio and the fact that HotelGo will operate 117 days in its first year, the total cost of purchasing water will equal $926.64 annually.

S TORING W ATER
Plastic vertical 6000-gallon water tanks range in price from $3,000 to $5,000.58 Possible vendors include Tank Depot58 and Plastic Mart.59 These vendors will ship anywhere in the U.S. HotelGo will budget $4,000 for a water tank.

D ISPOSING

OF

S EWAGE

When HotelGo receives the containers from China, they will already be outfitted with bathrooms and sewage tanks. Disposing of the sewage will be the only cost associated with the sewage. SeaWorld will give HotelGo access to their sewage lines for the summer. This means HotelGo will have to pay to dispose of sewage at the Indianapolis Brickyark 400, the Austin Formula One, the Daytona 500, and the Charlotte Coca-Cola 600. All of these cities have free RV sewage dump stations.60, 61, 62, 63 However, in order to make a conservative cost estimate, HotelGo will assume a cost of $30 for each event. This calculates to a total cost of $150 per year for sewage dumping.

L OCATION
Through its strategic partnerships with events, as discussed in The Company and Event Markets and Competition sections, HotelGo will set up near big events. At racing events, HotelGo plans to locate on the racing infield or directly outside the racetrack, similar to how RVs and campers can set up. At other events or locations, like SeaWorld Orlando, HotelGo will work with the partner to find a suitable location in a nearby parking lot.

55

McGee, Keyes, E.I. "Water Conservation in the Hospitality Industry." East Carolina University. Web. 25 Nov. 2013. 56 Tang, Fu E. "A Study of Water Consumption in Two Malaysian Resorts." Engineering and Technology. World Academy of Science, 8 Jan. 2012. Web. 25 Nov. 2013. 57 "Cost of Water." Cost of Water. Fairfax Water. Web. 25 Nov. 2013. 58 "Plastic Vertical Water Tanks." For Sale. Tank Depot, 25 Nov. 2013. Web. 25 Nov. 2013. 59 "6000 Gallon Vertical Water Tank." Enduraplas. Plastic Mart, 25 Nov. 2013. Web. 25 Nov. 2013. 60 "RV Dump Stations Near Indianapolis, Indiana." RV Dump Station Locations. Sanidumps: RV Dump Stations. Web. 25 Nov. 2013. 61 "RV Dump Stations Near Austin, Texas." RV Dump Station Locations. Sanidumps: RV Dump Stations. Web. 25 Nov. 2013. 62 "RV Dump Stations Near Daytona Beach, Florida." RV Dump Station Locations. Sanidumps: RV Dump Stations. Web. 25 Nov. 2013. 63 "RV Dump Stations Near Charlotte, North Carolina." RV Dump Station Locations. Sanidumps: RV Dump Stations. Web. 25 Nov. 2013.

|19
When setting up the hotel, HotelGo can stack shipping containers two high, so that it only needs an area large enough for placing six containers on the ground, rather than 11. To estimate the cost that events will charge HotelGo for the space to set up, we looked at prices of RV and camper parking at HotelGos initial events. We estimate HotelGo will need the equivalent of six RV spaces to set up its 40-room hotel. After finding RV space pricing for each event, we added a 25% premium to estimate cost, as we assume events will charge HotelGo a corporate premium.

Seaworld: $20 per day per RV space64 * 90 days * 6 spots * 125% = $13,500 Brickyard 400: $120 for five days per regular RV space65 * 6 spots * 125% = $900 Austin Formula One: $322 for four days per regular RV space66 *6 spots * 125%= $2,415 Daytona 500: $790 for entire race per premium RV space67 * 6 spots * 125% = $5925 Charlotte Coca-Cola: $150 for entire race per regular RV space68 * 6 spots * 125% = $1125

With these conservative estimates, the total initial location costs is $23,865.

O FF -P EAK S TORAGE

OF

H OTEL T RUCKS

Currently HotelGo identifies five markets at which to locate the hotel. These six events, spread out throughout the year, allow for ample planning time. As HotelGo identifies and targets more events to attend, it will experience less idle time. In its initial few years of operation, however, HotelGo can expect some time in between events when the hotel is not in use. HotelGo must park and store the trucks and trailers with the hotel containers at these times. HotelGo will park the trucks and trailers at a tractor-trailer storage lot, where it can store its trucks short-term or long-term. Many such storage lot companies exist around the country, and provide security for the trucks. Comparable tractor-trailer and truck storage lots are priced as follows: Delta Truck Parking (California), $10 per day, per truck69 Safe Storage (Kentucky), $99 per month, per truck70 Access Outdoor Storage (Ohio), $34.95 per day, or $175 per month, per truck71

HotelGo has identified TXS Secure Trailer Parking Network as a potential storage lot provider, because of its locations close to our initial events, and throughout the U.S. Pricing information for TXS is not currently available. From quotes from similar storage lots, HotelGo estimates a price of $175 per month, per truck. For a conservative estimate, assuming storage for 12 months, this comes to $23,100

64 65

"Know Before You Go." SeaWorld. SeaWorld Parks & Entertainment. Web. 02 Dec. 2013. "Tickets: Kroger Super Weekend." Super Weekend at the Brickyard. Indianapolis Motor Speedway, 2013. Web. 2 Dec. 2013. 66 Maher, John. "F1 Circuit Adds RV Camping Option ." Statesman. Cox Media Group, 2 July 2013. Web. 02 Dec. 2013. 67 "Geico Camping." Daytona International Speedway. Daytona International Speedway. Web. 02 Dec. 2013. 68 "Speedway Camping." Charlotte Motor Speedway. Speedway Motorsports, Inc. Web. 02 Dec. 2013. 69 "Truck Parking Lot." Delta Truck Parking. Web. 14 Nov. 2013. 70 Brooks, Paul. Tractor Trailer Parking. Message to the author. 14 Nov. 2013. E-mail 71 Noonan, Tim. "AOS Storage Application." Message to the author. 14 Nov. 2013. E-mail.

|20 L ABOR S OURCING

HotelGo will hire one general manager and two assistant managers manage the hotel. Based out of Orlando, these managers will travel with HotelGo to all events. These employees must hold past experience in hospitality and the ability to manage a staff, deal with customers, and solve unexpected issues that may arise on the go. They will manage the temporary housekeepers and setup crews, and any on-site customer requests or complaints. They will also manage a customer service phone line to answer questions about booking a room at HotelGo. HotelGo will use temporary staffing agencies to hire housekeepers, setup crews, and drivers. Staffing on a project-basis, an increasingly popular practice in the United States, resembles justin-time practices of a supply chain. 72 HotelGo plans to create a contract with TrueBlue Company, a company that provides temporary hospitality employees and setup crews through its Labor Ready company branch and temporary truck drivers through its Centerline company branch. Labor Ready boasts, With Labor Ready, you get employees just when you need them and only for as long as you need them.73 Labor Ready has over 600 offices around the country, and Centerline has 32 transport centers, meaning HotelGo can work with the same staffing company at its initial events, and as it expands to other events and locations. Working with a temporary staffing company allows HotelGo flexibility and eliminates the need to transport employees from location to location and provide lodging. The staffing company screens employees and verifies they are documented workers.73 It also manages employee payroll.73 By outsourcing these services to a company like TrueBlue, HotelGo eliminates much of the need for Human Resources management, and can focus on its core mobile-hotel business. Housekeepers will ready guestrooms and prepare laundry to create a clean, comfortable environment for guests staying at HotelGo. To ensure quality and reduce the need for training, HotelGo will hire staff with previous experience in housekeeping, which Labor Ready provides. To ensure consistency, the general manager will provide housekeeping staff with process instructions and checklists on how to clean and ready each guestroom. A crew of eight temporary workers will set up the hotel at each event location. Snoozebox, who sets up mobile hotels in Europe, boasts the ability to set up and be operational within 48 hours of arriving on location,74 and HotelGo plans to do the same. Generally, set up involves removing the shipping container hotel blocks from the trucks. At the end of an event, workers will help repack the hotel blocks onto the trucks. HotelGos managers will supervise workers during the set up and tear down process to ensure consistency and safety. Labor Ready provides temporary workers specifically for loading and unloading, for set up and tear down of events, and for moving. Labor Ready can recommend the right workers at each location for this labor-intensive job. HotelGo will hire temporary drivers to transport the shipping container hotel units from one location to the next. Centerline, a temporary and long-term driver staffing company, provides experienced, professional truck drivers who are background checked and screened with drug

72

Jackson, Anna-Louise, Steve Matthews, and Anthony Feld. "Temporary Work Demand Rises as Companies Avoid Commitments: Jobs." Bloomberg. Bloomberg, 18 July 2012. Web. 8 Nov. 2013. 73 "Services." Labor Ready Hospitality. Labor Ready, 2011. Web. 8 Nov. 2013. 74 "Questions and Answers." Snoozebox Portable Hotel. Snoozebox. Web. 8 Nov. 2013.

|21
tests, and who have met the Department of Transportation requirements.75 Centerline handles all compliance work, and employee taxes, and benefits.76 HotelGo will work with Centerline to hire drivers at each event location to drive the HotelGo trucks to the next event.

L ABOR C OSTS
HotelGo estimates costs of labor to run the hotel as follows: HotelGo will pay the one general manager and two assistant managers on a salary basis. According to the Bureau of Labor Statistics, the 2010 median may for a hotel manager was $46,880 per year, or $22.54 per hour.77 HotelGo therefore estimates the yearly cost of general management at $140,640. 3 managers, at $46,880 per year = $140,640 per year Costs associated with labor for housekeeping, setup crews, and drivers will depend upon the number of events HotelGo chooses to attend each year, and the length of these events. Housekeeping staff will be paid at an hourly rate. Because HotelGo can expect an extra cost from using a staffing agency, it estimates wages at the 75th percentile to account for this extra cost. The Bureau of Labor Statistics cites the 75th percentile wage for maids and housekeeping in 2012 at $11.53 per hour.78 3 housekeepers, at $11.52 per hour, at 40 hours per week, at 16.8 weeks (see Appendix VIII) = $23,224.32

Setup crew workers will also be paid at an hourly rate. Again, to account for fees from a staffing agency, HotelGo estimates wages at the 75th percentile. The Bureau of Labor Statistics cites the 75th percentile wage for hand laborers and material movers at $14.77 per hour.79 HotelGo will allow two days to set up for an event, and two days to tear down after an event. 8 workers, at $14.77 per hour, at 8 hours per day, at 4 days per event, at 5 events = $18,905.60

Truck drivers will be paid at an hourly rate. For its initial five markets, HotelGo will pay drivers for 65.5 hours of driving, plus any additional costs for breaks and overnight trips. Please see Appendix VII for distance details. To account for fees from a staffing agency, we will estimate wages at the 75th percentile. The Bureau of Labor Statistics cites the 75th percentile wage for tractor-trailer truck drivers at $22.86 per hour.80 11 drivers, for 65.5 hours, at $22.86 per hour = $16,470.63 for HotelGos initial events

75 76

"The Centerline Advantage." Centerline. Centerline Drivers, 2013. Web. 13 Nov. 2013. Centerlines Driver Management Service." Centerline. Centerline Drivers, 2013. Web. 13 Nov. 2013. 77 "Lodging Managers." Bureau of Labor Statistics. United States Department of Labor, 11 July 2012. Web. 8 Nov. 2013. 78 "Occupational Employment and Wages, May 2012: 37-2012 Maids and Housekeeping Cleaners." Bureau of Labor Statistics. United States Department of Labor, 29 Mar. 2013. Web. 8 Nov. 2013. 79 "Occupational Employment and Wages, May 2012: 53-7062 Laborers and Freight, Stock, and Material Movers, Hand." Bureau of Labor Statistics. United States Department of Labor, 29 Mar. 2013. Web. 13 Nov. 2013. 80 "Occupational Employment and Wages, May 2012: 53-3032 Heavy and Tractor-Trailer Truck Drivers." Bureau of Labor Statistics. United States Department of Labor, 29 Mar. 2013. Web. 8 Nov. 2013.

|22 VIII. FINANCIALS V ALUATION

HotelGo is asking for $800,000 for 43% stake in the company. HotelGo values itself at $1,827,492.69 based on discounting the free cash flows over the first five years, and growing at a rate of 3% in perpetuity. HotelGo needs the $800,000 to cover the costs of purchasing the generator and hotel trailers, the shipping costs of the hotel trailers, and the leasing costs of the truck. The aforementioned costs sum up to be $587,758.67. The other $212,241.33 will be able to cover approximately 57% percent of costs of revenue for the first year while HotelGo is accumulating cash at the start of operation. HotelGo feels the $800,000 will be able to successfully fund the purchase of the necessary equipment and provide the cash needed to cover expenses throughout the first year.

I NCOME S TATEMENT
Year 1 Revenue Cost of Revenue Gross Income Depreciation Expense Operating Income Lease Expense Tax Expense Net Income $ $ $ $ $ $ $ $ 867,196.75 393,298.05 473,898.71 64,925.80 408,972.90 263,129.65 143,140.52 265,832.39 Year 2 $ $ $ $ $ $ $ $ 893,212.65 393,818.36 499,394.29 64,925.80 434,468.49 263,129.65 152,063.97 282,404.52 Year 3 $ $ $ $ $ $ $ $ 920,009.03 394,354.29 525,654.74 64,925.80 460,728.94 263,129.65 161,255.13 299,473.81 Year 4 $ $ $ $ $ $ $ $ 947,609.30 394,906.30 552,703.01 64,925.80 487,777.20 263,129.65 170,722.02 317,055.18 Year 5 $ $ $ $ $ $ $ $ 976,037.58 395,474.86 580,562.72 64,925.80 515,636.92 263,129.65 180,472.92 335,164.00

We evaluated revenue growth over the five years at a base case of 3%. This results mostly from a more aggressive pricing with expected higher demand. The revenue numbers above come from pricing and revenue estimates, explained on page 13 of the Sales and Marketing section. Costs of revenue result from summing the costs detailed in the Operations section of this report. See Appendix IX for a summary of costs. We depreciated fixed assets over five years using straight-line depreciation and no salvage value. Assets to be depreciated are the hotel containers and generator, at a total cost of $324,629. See Operations section, pages 13-15 and page 17, for cost details. We assume a 35% tax rate, based on the corporate tax rate, to calculate tax expense.

|23 S TATEMENT O F C ASH F LOWS

Year 1 Operating Cash Flow Net Income Depreciation Total Operating Cash Flow Financing Cash Flow Truck Total Financing Cash Flow Investing Cash Flow Generators Hotel Trailers Shipping Cost Total Investing Cash Flow Beginning Cash Net Change In Cash Ending Cash
]

Year 2

Year 3

Year 4

Year 5

$ $ $

265,832.39 64,925.80 330,758.19

$ $ $

282,404.52 64,925.80 347,330.32

$ $ $

299,473.81 64,925.80 364,399.61

$ $ $

317,055.18 64,925.80 381,980.99

$ $ $

335,164.00 64,925.80 400,089.80

$ $

(263,129.65) (263,129.65)

$ $

(263,129.65) (263,129.65)

$ $

(263,129.65) (263,129.65)

$ $

(263,129.65) (263,129.65)

$ (263,129.65) $ (263,129.65)

$ $ $ $ $ $ $

(30,000.00) (207,216.14) (87,412.88) (324,629.02) 800,000.00 (257,000.48) 542,999.52 $ $ $ 0 542,999.52 84,200.67 627,200.19 $ $ $ 0 627,200.19 101,269.96 728,470.15 $ $ $ 0 728,470.15 118,851.34 847,321.49 $ $ $ 0 847,321.49 136,960.15 984,281.64

The lease payments for the truck have a value of $1,315,648.25, as detailed in the operations section on page 15. This value is divided by five to give the financing cash flows for the lease payments. Investing cash flow costs of generators, hotel containers, and shipping costs are detailed in the Operations section.

|24 B ALANCE S HEET

Year 0 Assets Cash Accounts Receivable Inventory PPE Accumulated Depreciation Net PPE Truck Total Assets Liabilities Leases Amortization Net Lease Stockholder's Equity Common Stock Retained Earnings Total Liabilities+ Stockholders Equity $ 800,000.00 $ $ $ 800,000.00 265,832.39 $ $ 800,000.00 548,236.90 $ $ 800,000.00 847,710.71 $ 800,000.00 $1,164,765.89 $2,227,895.54 $ 800,000.00 $ $ 1,315,648.25 $ 263,129.65 $ 1,315,648.25 $ $ 526,259.30 789,388.95 $ 1,315,648.25 $ $ 789,388.95 526,259.30 $1,315,648.25 $1,052,518.60 $ 263,129.65 $ 1,315,648.25 $ 1,315,648.25 $ $ $ 800,000.00 0 0 $ $ $ 324,629.02 64,925.80 259,703.22 $ $ $ 324,629.02 129,851.61 194,777.41 $ $ $ 324,629.02 194,777.41 129,851.61 $ 324,629.02 $ 259,703.22 $ 64,925.80 $ $ $ 324,629.02 324,629.02 $ 542,999.52 $ 627,200.19 $ 728,470.15 $ 847,321.49 $ 984,281.64 Year 1 Year 2 Year 3 Year 4 Year 5

$ 1,315,648.25 $ 2,118,350.99

$ 1,315,648.25 $ 2,137,625.85

$ 1,315,648.25 $ 2,173,970.01

$1,315,648.25 $2,227,895.54

$ 1,315,648.25 $ 2,299,929.89

$ 1,052,518.60

$ 1,499,929.89 $ 2,299,929.89

$ 2,118,350.99

$ 2,137,625.85

$ 2,173,970.01

PPE includes the cost of the hotel containers and generator. These costs come from the Operations Section, pages 13-15 and page 17. Truck lease costs are detailed in the Operations section, page 15.

|25 B REAKEVEN A NALYSIS

Since a hotels marginal cost of an additional patron is non-material, all cost for HotelGo are considered fixed. The total revenue needed to generate a pre-tax income of zero is $697,488.50. This number is calculated by finding the total operating costs excluding taxes. Given HotelGos planned year one schedule of 118 operating days (See Appendix VIII) and 40 rooms, there will be 4720 available room nights. Accounting Cost $ 697,488.50 Operating Nights 118 Rooms 40 Total Room Nights 4720

The average room rate needed to break-even changes as the occupancy rate differs. The financial statements assume a 91% occupancy rate and an average rate of $183.73. This pricing is comes from dividing the total revenue by the projected occupancy rate times the total room nights. HotelGo Year 1 Projected Occupancy Rate HotelGo Year 1 Projected Average Rate 91% $ 183.73

The projected average rate is approximately $20 higher than the break-even rate for 90% occupancy, detailed below. This is advantageous because it will allow HotelGo to sell more lower-rates than planned if demand needs to be spurred. We calculated breakeven price by multiplying the occupancy rate by the total room nights (4720), and dividing the accounting cost by this number. Occupancy Rate 60% 70% 80% 90% 100% Average Rate Needed to Break Even Assuming Occupancy Rate $ $ $ $ $ 246.29 211.10 184.72 164.19 147.77

For additional breakeven analysis spanning the next five years, please refer to Appendix X.

E XIT O PPORTUNITY
Assuming HotelGo experiences the growth and success it is capable of, many options exist for the investor to prosper with their stake in HotelGo. The simplest option for the investor is to cash out by the resale of their equity. Should any of the original stakeholders want to repurchase some of the 43% equity initially sold it would be easy for the investor to sell their equity back at the increased value of the company. Another method for the investor to prosper is a company buyout by Snoozebox, the publicly traded portable hospitality provider in Europe. Should Snoozebox choose to purchase a flourishing HotelGo and add it as the North American branch of their services, HotelGo will be able to get a premium valuation as many synergies exist which makes for a very strategic acquisition by Snoozebox.

|26 IX. IMPLEMENTATION TIMELINE

Action Obtain initial funding Incorporate HotelGo and register in states of operation Seek and solidify event partnerships for SeaWorld Orlando, Brickyard 400 race, Austin F1 race, Daytona 500 race, and Charlotte 600 race Work with manufacturers to design and build 11 hotel unit shipping containers Lease 11 trucks Establish working relationship with TrueBlue Company, temporary staffing supplier Receive constructed shipping container hotel units Hire one hotel general manager and two assistant managers Launch marketing initiative for HotelGo Launch reservation booking system Trial Period: Set up at SeaWorld Orlando, and begins a trial period of operations for HotelGo HotelGo at Indianapolis Brickyard 400 race HotelGo at Austin Formula One U.S. Grand Prix race HotelGo at Daytona 500 race HotelGo at Sprint All-Star race and Charlotte CocaCola 600 race Evaluate inefficiencies and identify opportunities to streamline and improve HotelGo Evaluate and continue with initial five markets Begin actively pursuing new event partnerships, including additional racing events and other events compatible with HotelGo Obtain funding to purchase additional trucks and hotel units, to expand the size of HotelGo Date Quarter 1, 2014 Quarter 1, 2014 Quarters 2-4, 2014

Quarter 3, 2014 Quarter 4, 2014 Quarter 1, 2015 Quarter 1, 2015 Quarter 1, 2015 Quarter 1, 2015 Quarter 1, 2015 May 2015 through July 2015 July 22-28, 2015 November 11-17, 2015 February 17-23, 2016 May 21-31, 2016 2015, 2016, ongoing 2016, 2017 Late 2016

2019

|27
HotelGo will implement its business plan by first working to design and construct the hotel units and purchasing semi-trucks in 2014. HotelGo will initially consist of 10 hotel shipping container units, each with four guest rooms, totaling 40 guest rooms. HotelGo will include an 11th unit for office and living space for hotel managers. The implementation strategy involves targeting five markets and locations for the first years of operations, and expanding in the following years. In 2014, HotelGo will establish relationships with these key events and locations and begin negotiating partnerships for setting up HotelGo at these locations. Once HotelGo sets the initial operations plans and partnerships, it will perform a trial run of operations at SeaWorld Orlando, beginning in May 2015. Locating HotelGo at SeaWorld will not correspond with a specific event; this allows HotelGo flexibility and room for error in this trial period. In July 2015, HotelGo will move to Indianapolis for the Brickyard 400, its first large event. From there, HotelGo will set up at the Austin F1 Grand Prix, the Daytona 500, and the Sprint All-Star Race and Charlotte Coca-Cola 600. After this first year of operations, HotelGo will evaluate these events and decide on continuing to locate HotelGo at these locations. It will also begin looking at new possibilities of events to attend. HotelGo will look for events that complement its operations and match its brand image as a big-event, family-friendly, leisure hotel. Ideal events include other Nascar races, music and arts festivals, and other sporting events. HotelGo will target events with increased attendance, where hotel occupancy rates are high. Please see Appendix III for a list of possible future partnerships and events. In the future, HotelGo expects to expand with additional guestrooms by purchasing additional trucks and hotel units. Depending on an evaluation of current operations, HotelGo will either expand the current fleet of hotel trucks, or define a second fleet of HotelGo units that will attend events in a specific region of the country, saving on fuel costs.

X. RISKS P ARTNERSHIP R ISKS

A key to HotelGos strategy, event partnerships provide HotelGo with locations to set up, advertising access, and avenues for booking. We identified five locations (six events) with which to partner in our first year of operations. Recognizing the possibility that these particular events choose not to partner with HotelGo, we identified several other possible partnership venues, shown in Appendix III. We can easily change operations plans to accommodate different partnership events if necessary, as these plans apply to many types of events and venues. HotelGo must prove to its potential event partners that the partnership creates benefits for them. HotelGo will communicate the fact that event attendees will appreciate a new, unique lodging option and event centered-experience. A HotelGo partnership will also provide direct revenue to events, through booking commissions and location fees. HotelGo is confident that it can obtain successful event partnerships by identifying strong events, communicating the benefits, and persistently pursuing new events.

|28 E VENT R ISKS

Each event HotelGo partners with includes individual risks. Recognizing and mitigating partnership risks and demand risks will prove essential to HotelGos success. Appendix XI discusses each event and the individual risks each brings.

T RANSPORTATION RISKS
HotelGos event partnerships depend on the overseas shipping and cross-country shipping (from Tacoma, WA to Orlando, FL) to go according to plan. In order to mitigate the risk of losing out on a partnership because of shipping delays, HotelGo has a conservative implementation timeline and plans to complete sourcing of the containers with plenty of time before the SeaWorld trial period. HotelGo relies on semi-trucks to transport the hotel containers between events. The risks involved with these trucks include gas prices and quality/service of the leased trucks. HotelGos costs will increase if fuel prices increase more than projected, and as with most small businesses, it can do little to mitigate the risk of rising fuel prices. HotelGos tight timeline also relies on the truck leasing companies fulfilling the contractual agreements in regards to quality and service. HotelGo will mitigate the risk of faulty trucks and poor leasing company service by creating a foolproof contract and networking with other truck companies as a backup plan.

I MPLEMENTATION R ISKS
HotelGos implementation plan involves several steps that depend on the completion of previous steps. Beginning hotel operations in 2015 depends on the construction and purchase of the hotel units and trucks, and forming event partnerships in 2014. To guarantee operations and revenue inflows begin in May 2015, HotelGo will allow ample planning time in 2014. It will keep communication lines open and strong with all partners and suppliers, in order to foresee and mitigate any delays in the implementation timeline.

XI. SUMMARY
A hotel that moves to high-attendance events can avoid low demand and low occupancy. By targeting big events, HotelGo establishes a leisure hotel brand that provides a convenient, fun experience for guests. It will use its competitive advantage of a convenient, premium location to attract guests, and its prices, although high enough to create substantial revenue, will be competitive compared to other nearby hotels on event weekends. Event partnerships provide HotelGo a location to set up, access to website advertising, and an avenue for booking. Planning out the operations for the first year (involving the six events in the five locations) allows us to estimate costs and revenue. We expect to add additional events each year, which will increase revenue and allow for further expansion. In exchange for a 43% stake in the company, an $800,000 investment will provide sufficient capital to acquire the necessary equipment and cover expenses to commence operations. HotelGo is an exciting opportunity that offers strong competitive advantages. By only locating in markets where demand exceeds current capacity, HotelGo reduces the risks of fluctuating demand in a fixed location.

|a APPENDIX I: PARTNERSHIP CONTACT INFORMATION Daytona International Speedway (Daytona 500)

Ryan Tolley, Business Development Director: 866-887-6475 CorpHospitality@Daytona InternationalSpeedway.com

Indianapolis Motor Speedway (Brickyard 400)

IMS Sales/Corporate Partnership Department: (317) 492-6750

Charlotte Motor Speedway (Coca-Cola 600 and Sprint All-Star Race)

Event Sponsorship and Corporate Sales Department: 704-455-3203

SeaWorld Orlando
Chris Brown, Corporate Director of Strategic Alliances, Chris.Brown@seaworld.com

Austin Circuit of the Americas (Formula One Grand Prix

Partnership and Advertising Department: Partnerships@CircuitOfThe Americas.com

|b

APPENDIX II: ORGANIZATIONAL STRUCTURE

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|c APPENDIX III: EXPANDING EVENTS

Possible Races for Expanding HotelGo Ford 400 at Homestead-Miami Speedway Food City 500 at Bristol Motor Speedway (Tennessee) Coke Zero 400 at Daytona International Speedway Bojangles Southern 500 at Darlington Raceway (South Carolina) Pure Michigan 400 at Michigan International Speedway Advocare 500 at Atlanta Motor Speedway Bank of America 500 at Charlotte Motor Speedway

Possible Events and Locations for Expanding HotelGo Universal Studios Orlando SXSW Music and Film Festival, Austin, TX Summerfest, Milwaukee, WI NCAA Final Four Tournament Summer Camp Music Festival, Chillicothe, IL Nugget Rib Cook-Off, Reno, NV NFL Superbowl Biketoberfest, Daytona Beach, FL Wakarusa Festival, Ozark, AR

|d APPENDIX IV: POSITIONING TRIANGLES

Hotels

Traditional Hotels P.O.D: better location

Lodging Alternatives

Camping, RVs, Trailers P.O.D: more services

|e APPENDIX V: HOTEL UNIT CONSTRUCTION CONTACT

Contact: Company: Address: Jessica Zhang Platinum Investment and Development Ltd. Unit 1510 No. 1839 Qixin Rd. North Fortune 108 Tower Shanghai 201101, China Mobile: Tel: Fax: Email: Website: Alibaba Website: 86 136 6164 6491 86 21 6074 1758*8006 86 21 6074 1711 jessicazhang@bopind.cn www.bopind.com http://platinum.en.alibaba.com

APPENDIX VI: SHIPPING CONTAINER ROUTE81

81

"APL: Routes - Asia-North America." APL: Routes - Asia-North America. NOL Group, 30 Sept. 2013. Web. 23 Nov. 2013.

|f APPENDIX VII: DISTANCES OF INITIAL EVENTS

Distances between HotelGos Initial events Route Orlando to Indianapolis Indianapolis to Austin Austin to Daytona Beach Daytona Beach to Charlotte Charlotte to Orlando Total Hours 14 hours 18 hours 18 hours 8 hours 7.5 hours 65.5 hours Miles 974 miles 1,094 miles 1,124 miles 479 miles 524 miles 4,195 miles

APPENDIX VIII: DATES OF YEAR 1 OPERATIONS

Event SeaWorld, Orlando FL Brickyard 400 Austin Formula 1 Daytona 500 Charlotte Coca-Cola 600 Dates of Operations May 2015 through July 2015 July 22-28, 2015 November 11-17, 2015 February 17-23, 2016 May 21-31, 2016 Number of Days 90 days 6 days 6 days 6 days 10 days 118 days = 16.85 weeks

|g APPENDIX IX: COST TABLE

These costs are compiled from the Operations section of this report, beginning on page 13. Detailed sources can be found in this section. Truck insurance Hotel insurance Housekeepers Setup crews Manager Salary Expense Truck drivers (for initial planned events) Gas Storage (All 11 Trucks for 12 Months) Utilities (Diesel Gas for Generator, disposal of sewage, water storage, water) Generator 11 semi trucks (Present Value of Lease Payments) 11 hotel trailers (Actual costs, Beds, Miscallaneous Furnishings) Shipping Costs for 11 Hotels (Shipping from China, Driver Costs, Gas Costs) $ $ $ $ $ $ $ $ $ $ $ 31,350.00 23,224.32 18,905.60 140,640.00 16,470.63 28,917.63 23,100.00 69,480.93 30,000 207,216.14 87,412.88 9% of Revenue

$ 1,315,648.25

|h APPENDIX X: BREAKEVEN ANALYSIS

Year 0 Gross Income Present Value Factors (1+IRR)^t Operating Cash Flows Discounted Free Cash Flows Net Present Value PV of Company NPV of Company Breakeven Point Sum of FCF, Our Business' Value Breakeven Point Present Value Factors (1+IRR)^t Sum of Breakeven Cash Flows $ 587,758.67 $2,055,360.34 $1,467,601.67 $ 196,533.58 $(587,758.67) Year 1 $473,898.71 1.2 $330,758.19 $581,324.15 $275,631.82 Year 2 $499,394.29 1.44 $347,330.32 $270,508.40 $241,201.61 Year 3 $525,654.74 1.728 $364,399.61 $235,301.73 $210,879.41 Year 4 $552,703.01 2.0736 $381,980.99 $204,563.44 $221,053.81 Year 5 $580,562.72 2.48832 $400,089.80 $177,747.06 $160,787.12 $945,806.57 2.48832 Perpetuity

$1,827,492.69

$196,534.57 1.2 $163,778.81

$196,534.57 1.44 $136,482.34

$196,534.57 1.728 $113,735.28

$196,534.57 2.0736 $ 94,779.40

$196,534.57 2.48832 $ 78,982.84

|i APPENDIX XI: INDIVIDUAL EVENT RISKS

SeaWorld Orlando HotelGo will target SeaWorld Orlando during the summer months. Because SeaWorld is not a one-time event, like a sporting event or concert, HotelGo could see less high demand and experience vacancies. Yet because HotelGo wants to use SeaWorld as a trial period to test and streamline operations, it will benefit from slower initial demand. In the future, with increased targeted marketing, HotelGo should not have difficulty filling its initial 40 guest rooms. Brickyard 400 The Brickyard 400 provides hotel packages to consumers, which will be hard to compete with. Yet because of the Brickyards history of partnerships, setting up a HotelGo partnership will be easier. HotelGo brings a new hotel option to the Brickyard 400, offering guests an alternative hotel experience in close proximity to the race. Austin Formula 1 Grand Prix The Grand Prix tries to create a high-end experience, and currently offers lodging and hospitality with exclusive hotels such as the W. Austin Hotel, and the Amber Lounge2. Catering to valueoriented convenience centered consumers can mitigate these risks. Placing and emphasis on the convenience and close proximity to the race will differentiate HotelGo from competitors. Daytona 500 The Daytona 500 charges a high price for RVs and campers to set up on the infield. This means that they may charge a high partnership fee to allow HotelGo to locate here. By catering to customers willing to pay a premium for location and convenient lodging, HotelGo can charge a higher price and mitigate this high partnership fee risk. Coca-Cola 600 The Charlotte Motor Speedway has experienced decreased revenues in recent years.82 HotelGo recognizes this creates a risk of filling its rooms at a profitable price rate. Yet HotelGo recognizes potential for a profitable partnership because the Speedway has successful partnerships with Omni and Westin, showing that the race attracts people who spend money on hotel rooms. Because the race attracted over 140,000 attendants last year83, HotelGo should easily fill its initial 40 rooms.

82

Dunn, Andrew, and David Scott. "Changing Fan Habits a Challenge for NASCAR." ThatsRacin.com: News from NASCAR and Auto Racing World. 23 May 2013. Web. 15 Nov. 2013. 83 "Coca-Cola 600 Race Recap @ Aaron's Sports." Aarons Sports RSS. Web. 15 Nov. 2013.