The London City Hopper is a new tour agency that has been launched with the sole purpose of improving the cost of tour travels in the city of London. Bearing in mind that Olympics will be held in this city in a few days, it is important to market London to the rest of the world as a suitable place for investments and tourism. One of the ways in which this can be achieved is through the creation of cheaper costs of travel so that tourist and domestic consumers can be in a position to move around the city easily. One thing that is important to understand is the average cost for a tour travel in London is about £26.00. It is important to realize that lower prices attract more customers (Tirole, 1988, p.111). At this price, fewer members of the public and the visiting population would be willing to use tour agencies during their travels to London. Therefore, one of the key reasons why we have decided to launch the London City Hoppers is based on the fact that the costs offered by the current tour agencies are high. London City Hoppers intends to make tour travels affordable so as to be able to accommodate people from all walks of life in the travel industry.

Secondly, it is important to note that most of the tour agencies that are currently in operation with London, do not offer the same level of comfort as the one that this new tour agency is going to offer. Many of the tour buses that are used by many companies within London are a bit crowded. One of the key objectives that our management at London City Hoppers aims at fulfilling is the idea of increasing how the comfort of our customers. Customers enjoy being comfortable in any given service that they are getting. Martinez writes that customers actually become more comfortable when they realize that some services are more comforting that others (Martinez, 2008, p.114). This means that our tour agency will give customers the chance to compare our services to those offered by other companies. Unlike some of the agencies that use big buses that are sometimes uncomfortable to travel in, London City Hoppers aim at providing a 25-seater travel buses. This reduced capacity of the carrying capacity of our travel buses is aimed at increasing the quality of service. With a smaller carrying capacity, the needs of our customers are met at an individual level. Kensing explains that businesses that explore an extra function of meeting the needs of consumers at an individual level are able to win the hearts and minds of those consumers. Consumer tastes and preferences are sometimes shaped by the proper execution of this function (Kensing, 2004, p.241). London City Hoppers is therefore one of the best travels because most travel agencies are concerned with the net profits that they generate from their customers at not the level of satisfaction that their customers obtain in the long run. Kurtz writes that many business entities around the world are interested in only the profit that they generate. These businesses do not care about the quality of services and products that they give to their customers (Kurtz, 2008, p.34). Our tour agency would not like to emulate such culture. Quality service for our clients is our priority.

In addition, our tour agency is open to suggestion in case our customers are not contented with our services. Rodger writes that allowing customers to give feedback on the quality of services that they get builds a cohesive relationship between the consumer and the service provider (Rogers, 2011, p.49). We are open to any recommendations that would help us serve our customers in the best way possible. Customers can post their feedbacks on our website www.londoncityhoppers.com on the section entitled customer reviews. This allows us to be able to know some of the areas that need to be improved so as to meet the diverse needs of our customers. It is also important to realize that our management does not only expect our customers to give positive feedback. We invite negative comments that are based on constructive criticism because we believe that improvements cannot be realized until there is a well defined communication between the management and the consumer base. Doran writes that negative feedback does not ruin a company but it is in fact a gift that allows any given company to look at it services from the dimension of another person and be able to make the necessary adjustments (Doran, 2008, p.63).

London City Hoppers tour agency would also like to bring to your attention that our management is characterized by a high trained work force. We believe that employing a highly qualified staff minimizes the likelihood of errors in our service delivery. Pettinger writes that “High qualified workers are positive and committed” (Pettinger, 1998, p.55). This is because these workers are more flexible owning to the fact that they can be able to work in a range of different sections of a given business unit. High qualified and trained workers also builds the confidence of our customers in that a work force that is well trained is always equipped in meeting the needs of our customers which should be met with a lot of caution and keenness so as to protect the popularity of our company. Brown explains that the fact that high qualified workers possess knowledge allows them to be confident in what they are doing. This minimizes the level of staff turnover because fewer conflicts exist between the work force and the supervisors (Brown, 2005, p.436). With a highly qualified workforce, the safety of our customers is assured.

Appendix A: Table showing the prices of key travel agencies in London (Hop on-Hop off tours).

Selling Prices for our tickets at London City Hoppers

Based on the table above it is clear that the average cost of a tour travel in London is about 20 Euros. Our new travel agency intends to create a flat
rate of about 15 sterling pounds for adults and a flat rate of 10 sterling pounds for the child population. The initial capital that has been invested in
the start of this company is about 18million sterling pounds. This capital has been used in the purchase of new vehicles to be able to meet the domestic
demand within London City. This capital has also been used in the setting up if the necessary infrastructure to enhance the commencement of our operations.

Projected estimate of the per Unit cost statement


Rs (Amount in Sterling Pound)

Purchase of Vehicles




Direct expenses incurred by company


Construction of Consumer stores/stations


Vehicle Maintenance


Salary of management team


Mitigation strategies and Damage protection




Other expenses


Four Month Budget

Statement showing the projected Budget for 4 months

Item Projected Amount

Direct purchase of vehicles 6,000,000

Wages of direct labor offered 2,000,000

Direct Expenses incurred by company 1,000,000

Prime cost 9,000,000

Construction of consumer stores 3,000,000

Vehicle maintenance 1,000,000

Salary of Management team 1,500,000

Damage protection & Insurance 3,000,000

Other expenses 500,000


Sensitivity analysis & Target Profit

Sensitivity analysis & Target Profit

Any Business has to ends, either making profit or being unable to handle the competition posed by other related industries in the market. As we launch the London City Hoppers we are alert that we are likely to face competition from other more established companies. However, in order to handle this competition effectively, we have decided to use three strategies First of all, our tickets are going to be cheaper compared to many well established tour agencies. Cheaper prices are likely to attract more customers bearing in mind that discounts is an incentive in the market today. Second, we intend to buy newer models of vehicles so as to make sure that our customers are more comfortable compared to using older vehicles provided by other older companies. Finally, we intend to employ more domestic workers who are highly trained so as to improve the lives of our local population while at the same time we try to make profits. Because the starting capital is already available, the risk of failure is at a minimum and therefore there is no sensitive issue that stands in the way of beginning the operations of the London City Hoppers


Recommendations for the Tour Agency and Conclusion

One recommendation that I would give to the newly launches tour agency is that accountability and transparency is key if any business unit is going to succeed. Therefore, in order for the tour agency to be in a position to generate maximum profits, better supervision and monitoring of the company’s operations are required. McDaniel writes that better supervision increases the standards of the quality of service which in the wrong run improves business outcome (McDaniel, 2008, p.186). This would necessitate the posting of highly trained supervisors in every branch of this tour agency who would do the auditing of daily transaction so as to reduce cases of corruption within the business unit.
Improving environmental sustainability

London City Hoppers tour agency will be involved in community service and in efforts to preserve the environment. This would involve donations to environmental societies so that efforts of environmental restoration at the local level can continue to be executed. Shastri explains that despite the fact that many businesses are established with the aim of making profit, they have social and environmental responsibilities that they have to fulfill. This is because nature has to be constantly protected because failure to do so not only hurts the locals occupying a given area but also the business enterprise itself (Shastri, 2010, p.63).The management team of this tour agency is also looking at the possibility of purchasing a few electric cars so as to minimize the level of carbon emissions released into the atmosphere.
Reflection on Assignment

By undertaking this assignment, I have realized that for any given company to successfully venture into the market, proper planning and budgeting is required. This is necessary so as to avoid large amounts of losses that would have been prevented in the first place.