Crashpadz Inc. Business Plan

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Table of Contents
Company Analysis 2
What is a Crashpad? 2
Crashpadz Inc. Overview. 3
Immediate Expansion Plan 5
Long-Term Expansion Plan 5
Current Performance 6
Meet the Team 6
Value Proposition 7
Testimonials 8
Crashpadz, Inc. Property Pictures 9
Business Model 10
Market Opportunity 11
Industry Analysis 13
Bed & Breakfast and Hostel Accommodations Industry Overview 13
Industry Performance 13
Industry Outlook 13
Key Industry Trends 14
Products and Services Segmentation 14
Market Analysis 15
Market Overview 12
Bed & Breakfast and Hostel Accommodations Major Markets 12
Consumer Trends Among Younger Travelers 14
San Francisco Tourism Market 16
Uber and Lyft Drivers 18
Local Target Markets 18
San Bruno - 94066 19
Oakland - 94610 21
Daly City - 94015 23
Competitive Analysis 24
Competitive Overview 24
Major Competitors 25
SWOT Analysis 30
Marketing Plan 31
Marketing Overview 31
Marketing Goals 32
Online Marketing Initiatives 28
Direct Marketing Initiatives 30
Operational Structure 33
Corporate Information 33
Corporate Structure 33
Management Team 34
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Company Analysis
What is a Crashpad
Crashpadz™ are shared living accommodations providing temporary living solutions to people
with shared intentions. Crashpadz guests otherwise known as "Crashers" can stay anywhere
from a day to many months. With our competitive rates Crashers can "test the waters" before
making a longer term commitment. Crashers can enjoy the ultimate in flexibility in terms of
living. Once a reservation is made, the Crasher can stay at any of the locations within our
network (currently three locations). As more Crashpadz are brought into our network, Crashers
will have even more flexibility when traveling and working at locations away from their home
base.
Crashpadz™ Inc. Overview
History
In 2014 Zameer Azam (Founder) was a rideshare driver for Lyft and living in one room of his
parents rental home located in Daly City, California. While driving for Lyft one night he met a
flight attendant, who later on went onto become his girlfriend. The two eventually moved in
together into his room. Zameer Azam was working part time as a Lyft driver while also
dedicating his time to renovating his childhood home and pursuing a B.S. degree at San
Francisco State University. His then girlfriend had suggested that he turn his home into a
Crashpad. Unbeknown to Zameer at that time what a “Crashpad” is or was. She had suggested
that she take him to one. Upon completion of renovations, he began to build bunk beds in
each room and set up a shared accommodation Crashpad structure. Then he listed through the
major Airlines mainly United, Virgin and Skywest. Within weeks a steady supply of recently
graduated flight attendants looking for an affordable place began to pour in and fill up the
bunk beds in a dormitory style setting.
As a few months went by flight attendants were relocated and new classes had not yet
graduated so beds were remaining empty. Wanting to fill empty beds and generate revenue he
decided to open the beds which were not filled on AirBNB. Since then Crashpadz has created
its own website and utilizes many different OTA's (Online Travel Agencies i.e. Expedia,
Booking.com and since these are aggregator sites the OTA's themselves list on like 10 different
partner/affiliate sites, allowing affordable accomodations to always stay in high demand.)
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Short term rentals in homes was a thing of the recent future, we originally priced the beds very
low and as demand began to pick up so did the price per bed. Zameer was able to turn a 4
bedroom house that typically rents on the general market for about $3,500 to a whopping
$13,000 per month. In effect he took a 4 bedroom house and without building any additional
bedrooms, increased the net revenue by over 300%. Demand for affordable accommodations
skyrocketed and this is when Crashpadz was born.
Crashpadz Inc. (also referred to as “the Company '') owns and operates flexible, affordable,
and strategically located crashpad in the bay area. Crashpadz is trying to help in alleviating the
shortage of affordable housing in expensive cities such as San Francisco, Los Angeles, New
York City and surrounding areas. Crashpadz provides shared dormitory rooms that give you all
the amenities and comfy feelings of being at your home away from home. Crashpadz Inc.
launched its first location in Daly City known as SFO Crashpad.
SFO Crashpad has become the top choice for travelers due to its competitive prices at an
average of $42.40 per night, well-maintained facilities, and close proximity to San Francisco.
The Crashpad is only 8 miles from downtown San Francisco, 4.5 miles from San Francisco
Airport, and 100 feet from public transportation. The Crashpad currently holds a 4-star rating
on Google and Facebook in addition to a “Very Good” rating from leading travel site Agoda.
Crashpadz offers clean and spacious rooms as well as several value-added services to ensure
satisfied customers. These services include free WIFI, snack machines, a VR game room,
fantastic social settings and activities, as well as travel recommendations within the Bay Area.
Furthermore, Crashpadz offers flexible rates for short-term or long-term stays, convenient
check-out times, self-check-in processes, and does not require guests to provide a security
deposit
Management Team
Zameer Azam
Founder/CEO
Zameer Azam is an experienced business professional with more than 18 years of experience in
sales, marketing, and business development within the residential, transportation, and retail
clothing industries. Zameer is an industry veteran when it comes to starting and running
successful businesses. Zameer has been the owner of Crashpadz Inc. since founding the
business in 2015. He has managed all aspects of the Company’s flagship property in Daly City.
Zameer is also responsible for doubling the property’s gross income every year since inception.
Zameer was also a professional options trader at Excalibur Trading, LLC where he traded on his
own account from 2011-2015. This was a crucial stepping stone for Zameer’s career and he
used this opportunity to perfect his stock market trading analysis skills. Zameer also learned
how to harvest any losses by writing them off against any gains from other business ventures.
Zameer was also the owner and operator of G-Spot, a retail clothing store that eventually
became an online retail business from 2001-2002. Zameer was responsible for ordering
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wholesale inventory, photographing merchandise for marketing, creating product listings,
accounting and invoicing, as well as shipping packages daily to customers all around the
United States. Zameer was able to turn a significant profit at G-Spot, similar to his successes at
Crashpadz Inc.
Investors can trust in Zameer’s professional track record. His wide set of skills, determination,
and passion for affordable living solutions will continue to be a key driver for the Company’s
future success. Zameer will be responsible for acquiring new locations, building them up to
proper standards, and ensuring a widely replicable hostel format.
Jason Voelker
Business Partner/ Chief Compliance Officer
Jason is a litigation and legal research specialist. He has experience within research support,
online legal research instructions, operations management and strategic planning. Jason has
successfully provided solutions to the information challenges faced by numerous law firms,
corporations, government officials, and the general public. Jason has been the Executive
Director of the Marin County Law Library in San Rafael, California since 2012. He is responsible
for the short and long-term planning needs of the library including its overall administration.
Jason is also in charge of the research and technological requirements of legal staff and library
patrons.
As a result of his position, Jason has developed skills that will greatly assist in the operations of
Crashpadz Inc. These skills include budget development and control, coordinating legal
research for county officials and the public at large, and interdisciplinary collection
development in digital and print formats. Jason also conducts in-depth research in
practice-specific areas, legislative history, and recent changes in the law. Jason is also
responsible for the development of catalogue procedures, contact negotiations with multiple
vendors, guiding patrons through internet-based legal research programs, and incorporating
new technologies into the Marin County Library.
Jason was also a Lead Law Clerk for the Conservation Center in Jamestown, California from
2009-2012. Responsible for the research and application of relevant laws regarding client case
facts in the areas of torts, civil rights, and criminal law, including the maintenance of a 40-client
portfolio, direct contact with opposing council, petitions for the writ of mandamus, as well as
filing of habeas corpus proceedings in state and federal court.
Jason also facilitated offers, dispositions, discovery, and recorded statements. His experience
also included drafting of summons, complaints, motions, and oppositions to motions, as well as
facilitating FOIA and CPRA requests including follow-ups. Jason’s law experience, successful
real estate investments, and his research skills will greatly aid the Company especially with any
financial management concerns.
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Raymond Young
Chief Financial Officer
1986 UC Berkeley B.S. Finance and Accounting
1986-1990 Internal Revenue Service
1990-1993 Jeanpierre & Co CPAs
1993-present Raymond Young CPA
NASA audits around 1993 to 1997
Joint ventures with Deloitte & Touche doing auditing for large entities approximately 1992 to
1998
a. Strong marketing background, including two $5,000 seminars with Abraham.com, and learn
from people like Clayton Makepeace, Gary Bencivenga, Russell Brunson, Grant Cardone,
Anthony Robbins, and dozens of others. The proof is my business card, nobody else has a
similar business SALES card in auto sales, solar sales, CPA, attorney, doctor, appliance sales,
any profession. businesscard20200220165153.pdf
b. 1990-2006 Photographer who made it to the top level - there are only about 25 to 50 still
photographers at any major event Oscars Emmys Grammys Miss Universe Miss America etc. I
made it pretty much every time from 1996 to 2003. My final agency Agence Press Sygma got
bought out by Corbis, who got bought out by Getty Images. Getty Images considers me an
honorary alumni.
https://www.facebook.com/cpaphoto/media_set?set=a.162188060109&type=3
Venkatesh Venkatasubramanian
Chief Technology Officer
Venkatesh is an Engineering graduate and an experienced Technology Consultant having a
handful of experience in the Asia/ North America market. After working/ consulting with
multiple reputed Domain Name registrars as Product Manager and Business Development in
helping businesses scale. Venkatesh has a deep understanding about technology and how to
integrate technology in mission critical business solutions. In the past he worked as Product
Manager for Web Werks India Ltd, a Data Center and Domain Name Registrar in Mumbai,
India. Recently moved to the Bay Area to take a position in Nusoft Inc as Business Growth
Consultant for the California region. Venkatesh consult many firms in achieving their financial
goals and business expansion funding.
In Crashpadz, Venkatesh’s role would be to identify problems and apply technology as a
solution to scale business in all dimensions. He is in the mission of building a software which
will connect Crashpadz with their customers across the network in Customer Relations as well
as Booking Management within 2020. He also took responsibility in identifying potential
Investors for securing more funding and cash flow for the company to expand across the
country.
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Immediate Expansion Plan
The Company is now raising funds to acquire one of its current business assets. Once this initial
backward integration is successful, the Company plans on undertaking a state-wide and
nationwide expansion. The Company also aims to bring its concept throughout key locations in
major hotspots across the globe. Crashpadz Inc. is seeking a first round of $320k - $1.4M in
financing to acquire one of their Crashpads. In order to backward integrate one of its mainstay
locations which has actively brought in an average of $13,000 per month and expected to
return even more the second year in operation. One of the potential roadblocks for Crashpadz
operation would be the complications between Landlord and Tenant. Any conflict of interest
between the landowner and Crashpadz could cause potential threat to smooth business
operations and also leased property gives us only a certain amount of flexibility in remodelling
and furnishing. With the new laws that California passed this year (AB 1482) evictions have
skyrocketed and that places Crashpadz at the risk of landlords. By becoming their own landlord
Crashpadz will no longer have to worry about evictions and will build equity as mortgages get
paid down, instead of losing money renting properties. Crashpadz now has the opportunity to
purchase one of their existing running locations.
Crashpadz pays around $ 100,000 in terms of current property rentals in 2019 alone and due
to an increase in locations this year property rentals go over by 80%. Our business model
would be more profitable when Crashpadz owns the properties and paying mortgage and
gaining equity in the property, See (Attachment A). It also gives more flexibility and freedom in
substantial renovations and redecoration of the properties to bring it up to Crashpad
standards. Owning the properties and utilizing the revenue the business generates in paying
down mortgages secures the company from the interruptions and disturbance from the
property owners and helps to build equity in the properties for the company itself.
At a capital infusion of $320k Crashpadz can put 20% down on a $1.4M purchase price of the
1640 Edgeworth property and finance the remaining 80% through a bank. At $1.4 Million
Crashpadz can purchase the property in whole and the company would seek an asset backed
loan, in which the loan was secured against the property itself. This is the first step needed to
implement our backward integration strategy. For our horizontal integration strategy.
Crashpadz seeks to buy commercial properties and activate our Crashpad hubs in which short
term renters are placed. At a financing of $3.5 million and $5.5 million respectively. In addition
to financing costs in buying the undervalued commercial building(s). Crashpadz also seeks a
$1 million dollar credit line for covering costs of renovation in bringing the building(s) up to
Crashpadz standards .
Our first commercial property will be acquired in Daly City, California, 1784 Sullivan Avenue,
(See Attachment B) which will hold approximately 84-88 guests. This commercial building has
been abandoned now for many years and is in need of rehabilitation and more recently we
were able to locate the owners and now have the opportunity to purchase the building and
bring about a good use.We will make our commercial Daly City property as our hub to our San
Francisco and Daly City residential properties for all guests who want to stay on a long term
basis. Our commercial property will be modeled after our residential properties already in our
network. We will obtain a permit to run a shared accommodation boutique hotel. The planned
accommodation fits into future plans for the city, See "Daly City 2030, A Plan For The Future,
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Administrative Draft December 2011"
,http://www.dalycity.org/Assets/Departments/Economic+and+Community+Development/plan
ning/pdf/General+Plan+Admin+Draft.pdf. Although the property has already gone through
City Council and been approved for use as a 22 unit residential apartment complex.
(Attachment B p.20) We would not need to demolish and reconstruct as our business would
need to renovate the existing structure in order to bring the building up to city code and build
out additional bathrooms and room renovations. The amenities within our commercial
property will include a family room, self-use shared kitchen with family style dining room, movie
room, gaming room and laundry room.
Our second commercial property that will be acquired is located in San Rafael, California. This
is a fully functional boutique hotel that has been since converted to long term rental use. The
owners are not fully able to capitalize on the potential the property has in generating, See
Proforma Statement herein attached as (Attachment C & C1, Pro Forma Statement of La Casa
Grande). Crashpadz plans to revert the building back to its original use as a hotel, in doing so
Crashpadz will run the hotel as shared accomodations with a 50/50 use of long term and short
term guests similar to every location currently in its network. By doing so, Crashpadz should
see a market cap rate of 6.81%. Over a one year time frame the building with generate revenue
of $706,872 and GRM will increase to market GRM of 12.84 giving the building a valuation of
$8.2 million. Calculations showing the breakdown of running a Crashpad business from this
location are included as (Attachment D). We have included the financials of operating the
business as a Crashpad showing all long terms, half long term and half short term and all short
term. And we have included the potential of this property to generate exponential increases in
revenue by acquiring additional rooms through the process of attrition. The building as it
currently stands can support a $5.5 million dollar 30-year mortgage with a fixed 5-year
amortized asset backed loan at 5.5% and still have a cushion. Even increasing to just market
rates on current tenants would bring in a 10% increase in monthly revenue.
Long-Term Expansion Plan
Since the Company’s first three locations have achieved success, the Company will begin
working on its long-term expansion plan. The entire scope of this plan is further outlined below.
The execution of this long-term expansion plan is contingent on the Company’s ability to raise
further capital to fund these initiatives.
Phase 1: Commercial Property Acquisition
• Crashpadz would like to raise $ 10 Million as its expansion goal for 2020 to acquire 2
Commercial buildings as a part of Crashpad to run short term rental to set up as its
gateway for qualifying long term renters to its existing residential properties (refer
Attachment D).
• Crashpadz will expand outside of the Bay Area further in California and Nevada in 2020.
Los Angeles and Las Vegas are two locations that Crashpadz are looking to expand in
the near future.
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Phase 2: Licensing the Brand to Independent Operators
• The Company will seek to license the Crashpadz Inc. brand to independent operators
within the United States. These operations will be able to leverage the Company’s
brand presence and will be able to list their properties on the Company’s main website
to make online bookings.
• Crashpadz Inc. will work to streamline its operational processes, interior design
requirements, marketing strategies, and available amenities to ensure that independent
operators adhere by the standards set forth by the Crashpadz Inc. brand. The Company
will routinely monitor the online reviews and customer feedback of each operator as a
means to better understand their performance.
Phase 3: The Crashpadz Network Booking Software
• Crashpadz Inc. intends to build a state of the art reservation management engine that
will allow Guests to find and book Crashpadz within their area. Guests will still be able
to book a stay at the Company’s properties through this new portal in a traditional
website and Smartphone App.
• Guests will have to create an account with Crashpadz and maintain prepaid credits to
make reservations and the app will allow self check-in and also manage their
reservation. The app lets know about the neighbors (members inside the shared room)
and also have options to contact customer support and also report any issues or
grievances.
• Making new reservations, Making changes to an existing reservation or transferring the
reservation inside the network and also cancel the reservations.
• The new booking engine will allow guests to choose the bed which they would like to
book instead of being assigned one automatically by the system.
Current Performance
Crashpadz Inc.’s flagship property features over five co-ed bedrooms with multiple bunk-beds
resulting in a total capacity of 26 guests at any given time. Demand has remained consistently
high as the property is almost fully booked every month. With an average price of $42.40 per
night, SFO Crashpad routinely brings in over $13,000 per month at a net income margin of
over 50%. DC Crashpad and SFC Crashpad as well performed more than expectations in 2019
within 6 months of operations making it highly profitable. The Company has been able to
double its gross every single year since 2015. The Company’s ability to generate significant
volume with minimal overhead (approximately $5,000/month) is a testament to its highly
profitable and lean business model.
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Meet the Team
Crashpadz Inc. was founded by Zameer Azam with the goal of providing affordable
accommodation in the Bay Area, where hotel prices can be as high as $338/night. He is joined
by his business partner Jason Voelker in 2017. The team is extremely passionate and carrying
years of experience in Real Estate and Hospitality industry. The team closely works with guests
in order to understand their needs and provide them with the best stay possible. Venkatesh
Venkatasubramanian joining in as a CTO of the company in 2020 carry more than 5 years
experience in the Information Technology industry adding value to the company's long term
goals. There are currently 5 house managers and 4 Janitorial staff.
Value Proposition
Key Price Advantage
Statista reports that the average daily rate for hotels in San Francisco was $338 – the most
expensive in the world. This has resulted in limited accommodations for travelers in San Francisco.
Crashpadz Inc. solves this problem by offering beds at $42.40 per night, which is more competitive than
most hotel operators, Airbnb’s, and other short-stay operators in the area.
Flexible and Convenient
Crashpadz Inc. offers flexible rates for travelers with unique life circumstances and is able to
accommodate short-term or long-term stays. Guests have the option to book a bed at a
nightly, weekly, or monthly rate without the need for a security deposit. Crashpadz Inc. even
offers a 100% refund on accommodations as long as the cancellation is made three days prior
to a listing’s local check-in time. Key services such as free WIFI, self-check-in procedures, and
flexible check-out times are also provided to ensure a more convenient stay at its property.
Community-Driven
Crashpadz Inc.’s main differentiator in the short-stay marketplace lies in its warm, friendly, and
home-like social settings. Crashpadz Inc.’s priority is to make everyone feel welcomed at its
crashpad and the Company goes to great lengths to ensure their continued satisfaction. Guests
are able to interact with each other in a dedicated common room and are invited on multiple
social activities such as bar crawls, guided tours, and more.
Profitable Business Model
Crashpadz Inc.’s business model presents an attractive growth and yield proposition, with good
margins through significant volume and generally low costs. A lack of staff overhead results in
low monthly expenses of $5,000, which has enabled the Company to boast an enviable net
income margin of over 50%.
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Highly Scalable
Crashpadz Inc.’s first location is already producing $168,000 per year. Redfin reports that the
average price of a home in Daly City is approximately $988,000. Based on the performance of
the Company’s first location this would lead to a cap rate of 17%. Combined with lower startup
costs, this will easily allow Crashpadz Inc. to pay off its financing for its new properties while
generating a superior return than most other properties.
Strategic Locations
The Company Crashpadz are located in a safe neighborhoods and are within walking distance
of major public transit networks connected to San Francisco. The Company will continue to
adhere by this criterion when selecting new properties in order to ensure a sustained
competitive advantage for its crashpadz. Every new location will also include a thorough study
of demographic trends, the presence of competitors, and the distance of the property to major
tourist hotspots or economic hubs.
Exceptional Facilities
The Company strongly believes that every guest deserves clean beds and shared facilities. The
Company’s current Crashpadz also offer shared common spaces, designated bathrooms, fully
functioning kitchens, and snack machines. The Company will ensure these 5S standards and
offerings are kept for each new property especially as the business grows.
5S
• Save
• Secure
• Share
• Self-Service
• Standardized
Testimonials
“Best place to stay when you're headed to the bay! I often stay
here when I'm in the area and have never had any problems.
Everyone is always inviting and it's also conveniently located
near an ample amount of grocery stores and great eateries!”
Jennifer L., 6/17/2018 on Yelp
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Photos of the Crashpadz Properties
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Business Model
The Company primarily generates revenue through daily, weekly, and monthly bookings of
beds within shared rooms. The Company’s flagship crashpad currently has four bedrooms and
one gaming room that can accommodate over 26 guests. Three of the crashpads bedrooms
can hold over six people while the remaining two can hold up to four people each. Within five
years from now, the Company aims to own and operate at least 20 privately-held crashpads
across the United States and in key locations around the world.
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Room Daily Rate Weekly Rate Monthly Rate
Golden Gate Room $40 $200 $650
MoTown Room $40 $200 $650
90's Room $40 $200 $650
Bay Room $40 $200 $650
EDM Room $40 $200 $650
Room Amenities
Golden Gate Room WIFI, TV, Shower, Bath, and Kitchen
Mo-Town Room WIFI, TV, Shower, Bath, and Kitchen
90's Room WIFI, TV, Shower, Bath, Kitchen, and Towels
EDM Room WIFI, TV, Shower, Bath, Kitchen, and Towels
Bay Room WIFI, Shower, Bath, Kitchen, and Towels
Market Opportunity
Hostels* have marked a major transformation of the hospitality industry, and many travelers are
now attracted to alternative accommodations. As a result, the market opportunity for
Crashpadz Inc. is vast and growing. In addition, there are several factors pertaining to the
Company’s industry and its local market that make a compelling case for its expansion. These
are further outlined below.
*Hostels: We use a hostel as a comparative industry.
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The Growth of the Shared accomodation in the US
According to IBISWorld, hostel accommodations represent a $675 million opportunity in the United
States. Hostels are quickly becoming the fastest growing segment in the market, due to their appeal
among Millennial travelers (aged 18-34) that prioritize affordability, convenience, and the
opportunity to meet other like-minded travelers. More importantly, this age category routinely
spends over $200 billion on travel every year, higher than any other age group in the US.
This combined with the popularity of San Francisco among youth travelers will drive further demand
for Crashpadz Inc.’s offerings, increasing its ability to generate revenues.
Booming Tourism in Bay Area & California
Crashpadz Inc. specifically appeals to guests seeking short-term accommodation near San Francisco
for tourism or business purposes. San Francisco welcomed over 25.5 million tourists (both for leisure
and business) in 2017 up 1.4% from 2016. Total spending by visitors was $9.10 billion, up 1.4% over
$8.98 billion in 2016. Furthermore, the number of tourists visiting San Francisco is expected to hit
26.3 million by 2018, an increase of 3.0% from 2017.
More tourism will lead to a larger number of guests in need of short-term accommodation,
significantly benefitting Crashpadz Inc.’s operations and its overall expansion plan.
Attractive Areas of Expansion
Each of the Company’s potential areas for expansion boast high levels of spending on lodging.
Based on data collected from ESRI, total spending on lodging within a 1-mile radius within these
cities amounted to $6.8 million in San Bruno, $17.4 million in Oakland, and $51.1 million in Daly
City. Within a 5-mile radius, these figures grow to $74.7 million in San Bruno, $143 million in
Oakland, and $170 million in Daly City. The data proves that a potent market opportunity exists in
all three areas the Company is considering for new crashpad properties.
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Industry Analysis
Bed & Breakfast and Hostel Accommodations Industry
Overview
Crashpadz Inc. is a “crashpad” and hostel accommodations company that offers hostel-type
rooms with bunk beds for customers that intend to stay on a daily, weekly or monthly basis. A
crashpad is a temporary place to stay, most commonly used by airline crew members (pilots,
flight attendants, etc.) in between their flights. Thus, the Company primarily competes under
the Bed & Breakfast and Hostel Accommodations industry in the US. This industry comprises
establishments that are primarily engaged in providing short-term lodging. Excluded from this
industry are hotels, motels and casino hotels.
Figure 4: Bed & Breakfast and Hostel Accommodations in the US: Industry Snapshot (IBISWorld)
Industry Performance
The Bed and Breakfast and Hostel Accommodations industry has benefited over the five years
to 2018 from a growing economy. Driven by an increase in travel rates and spending during the
five-year period, which has positively affected all travel industries, demand for bed and
breakfast and hostel accommodation has risen steadily since 2013. Trips by both domestic and
foreign tourists have grown over the past five years as the economy has improved. As a result,
industry revenue is expected to grow at an annualized rate of 4.2% during the five-year period
to $3.2 billion. This includes an increase of 1.4% in 2018 alone.
Figure 5: Bed & Breakfast and Hostel Accommodations in the US: Historical and Future Revenue
Estimates, 2013-2023 (IBISWorld)
Industry Outlook
Over the five years to 2023, industry revenue is forecast to increase at an annualized rate of
1.7% to $3.5 billion. The resurgence of travel rates is expected to continue, and travel
spending is projected to increase over the next five years as the economy improves. Consumer
spending is expected to increase an annualized 1.8% over the next five years. IBISWorld
estimates that during the same period, international arrivals will increase at an annualized rate
of 3.8%, while domestic travel will increase an annualized 1.6%. The influx of tourist dollars will
likely bolster revenue for bed and breakfasts (B&Bs) and hostels.
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Key Industry Trends
Growth of Hostels
The hostel component of this industry is expected to continue its expansion, particularly into
large cities. Hostels will invest in higher-quality facilities, enabling them to command higher
room rates as they compete against homeowners and renters making their own lodging
available through websites like Airbnb. Hostels will be able to offer some significant
competitive advantages to hold on to their market share, such as providing sightseeing and
cultural tours, day excursions, bar crawls and other value-adding services that are popular
among hostel travelers. Many travelers will also seek the opportunity to meet other like-minded
young travelers that they are unlikely to meet in expensive hotels or during stays in other
private accommodations.
Industry Landscape
The industry will continue to remain primarily a small business-focused industry, despite
increasing pressure for establishments to combine forces to ward off competition from hotels
and providers of informal accommodation. Establishments will increasingly rely on the internet,
particularly specialty booking sites, to find customers and maximize their occupancy rates. It is
now necessary for industry operators to understand review sites to learn and better understand
the preferences of their customers.
Products and Services Segmentation
Figure 6: Bed & Breakfast and Hostel Accommodations in the US: Products and Services
Hostels
Other accommodations, including hostels, make up 21.1% or $675 million of industry revenue
in 2018. Youth hostels are commonly identified by having low rates, quite often ranging
between $15.00 and $50.00 per person per night, depending on the facilities and location.
Typical hostel facilities include: separate gender and shared accommodations in dormitories
that have between six and 10 beds; shared, but separate, gender shower and restroom
facilities; and common or shared facilities, including kitchen, lounge and entertainment areas.
Some hostels also offer semiprivate rooms (with anywhere between two and four beds).
Whether or not bed linens and towels are provided can also vary among establishments. Some
offer on-site educational and other programs linked with local tour guides and tour companies.
Nearly all hostels now supply guests with complementary wireless internet.
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Market Analysis
Market Overview
Crashpadz Inc. will be targeting a wide variety of potential customers in San Francisco. The
Company will ensure that its crash pad and hostel accommodations services fit the needs and
expectations of foreign and domestic travelers, transport crews (Uber/Lyft Drivers), general
consumers and individuals who are transitioning to a new job or new home.
Bed & Breakfast and Hostel Accommodations Major Markets
The majority of hostel and bed and breakfast (B&B) travelers are leisure travelers, which make
up 80.0% of industry revenue. Among leisure travelers, 58.2% of industry customers are
vacation travelers, while 21.8% are family travelers. Business customers generate 12.0% of
industry revenue while an additional 8.0% comes from other sources, including business
meetings and special events.
Figure 7: Bed & Breakfast and Hostel Accommodations in the US: Major Markets
Youth and Backpacker Hostels
In general, these facilities are targeted at international and domestic backpacker visitors.
Guests sometimes have to be members of a domestic or international hostel association.
Facilities are generally used by younger people, though there are no age restrictions. Most
international guests come from Europe (including the United Kingdom), Canada, Australia and
New Zealand. While backpackers may seek out inexpensive lodgings for the night, they usually
spend the bulk of their travel budget on cultural, environmental and other unique attractions
and experiences. Most of the revenue of hostels is derived from accommodation. There may
also be some additional revenue from commission on tours booked by guests through the
hostel and from the sale of some everyday need items, which may be stocked.
Consumer Trends Among Younger Travelers
The Appeal of Hostels Among Millennials
The enormous growth in the hostel industry has been spurred by millennial travelers (aged
18-35) who are spending more money on longer trips and want to see as much of the world as
possible. This age group has revolutionized the hospitality industry as a whole as millennials
overwhelmingly prioritize social interactions and shared adventures with newfound friends
against the average traveler population. Hostels have swiftly become the preferred choice for
millennials they typically offer amenities suited to their needs and expectations. These
amenities often include free wireless access, guided tours, bike rentals, libraries and social
activities to name a few.
A report by PWC on the hostel industry also found that an overwhelming 70% of hostel
travelers are millennials. The report goes on to further state that the top reasons among
millennials for choosing hostels were:
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• Low Cost (44%)
• Convenient Locations (44%)
• High Overall Value for Money (43%)
• Opportunities to Meet Other Travelers (31%)
All of which the Company provides through its unique hostel format.
Millennial Spending Habits
According to a recent report by PWC, millennials tend to spend at greater levels than the
average traveler population despite being much younger and having a lower overall average
income. In fact, a 2018 survey by Travelport found that millennials on average spend the most
out of any age group with over 34% planning to spend over $5,000 on upcoming vacations.
Moreover, Travelport also found that a whopping 55% of millennials surveyed plan to travel in
the next 12 months, much higher than the 31% of Generation X respondents and the 20% of
Baby Boomer Respondents. According to a 2016 report by Futurecast, millennials spend on
average $200 billion on travel every year and this figure is projected to grow as the number of
travelers among this age group increases and reach their most lucrative spending years.
San Francisco Tourism Market
According to San Francisco Travel Association (SFTA), over 25.5 million guests were expected
to arrive in the area in 2017. These individuals were also estimated to spend a total of $9.10
billion, representing a 1.4% growth from the previous year. The large volume and spending of
travelers to the city represents a robust market for the Company’s services.
Visitor Statistics
A total of 25.2 million visitors and convention participants were noted to arrive in San Francisco
for 2016. Each day, the city receives an average of 68,998 visitors. Overall spending for the
tourism market in 2016 amounted to $8.9 billion, with each visitor spending an average of
$356.45 per day.
Figure 8: San Francisco Visitor Statistics (SFTA)
Overall Visitor Statistics 2016
Total visitors and convention participants 25.2 million
Visitors in San Francisco per day 68,998
Visitor spending in San Francisco per day $24.5 million
Total tourism direct spending $8.9 billion
Average daily expenditure for all visitors (1) $356.45
Accommodation Statistics
In 2016, the average daily expenditure of visitors in San Francisco amounted to $298.03. This
was mostly constituted by accommodations as the average room rate for the city was $252.92.
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The overall room demand in the year amounted to 10.5 million, where 7.4 million came from
transient room demand.
Figure 9: San Francisco Accommodation Statistics (SFTA)
Accommodation Statistics 2016
Average daily expenditure per general visitor staying in hotels/motels(2) $298.03
Average daily room rate $252.92
Hotel occupancy 85.5%
Room demand 10.5 million
Transient room demand 7.4 million
Total group room demand 2.6 million
Visitor Profile
The visitors of San Francisco were relatively affluent, with an average household income of
$94,637. Almost a quarter of visitors were visiting San Francisco for the first time.
Figure 10: San Francisco Visitor Profile (SFTA)
Visitor Profile 2016
Average Age 40.1
Average Annual Household Income $94,637
Average Length of Stay in City 2.5 Nights
First Time Visitors 24%
Female 51%
Male 45%
Prefer not to answer 4%
San Francisco Airport Arrivals
A great majority of arrivals in the San Francisco International Airport came from foreign
destinations. In 2016, 85.6% of flights came from other countries. The top three origins of
international arrivals were Vancouver International Airport (2,979 flights), London Heathrow
Airport (1,962 flights) and the Hong Kong International Airport (1,605). Among domestic
flights, the top origins were Los Angeles International Airport (33,884 flights), the
Seattle-Tacoma International Airport (18,017 flights) and the Las Vegas McCarran International
Airport (15,372 flights).
Figure 11: San Francisco Airport Arrivals (SFTA)
San Francisco International Airport Statistics 2016
Passenger Volume 53,106,505
Number of Flights 204,904
International 175,354
Domestic 29,550
Total Seat Volume 31,199,614
International 23,948,976
Domestic 7,250,638
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Uber and Lyft Drivers
According to the San Francisco Transportation Network Company Activity (SFTNCA), there are
45,000 transport network company (TNC) drivers operating in the San Francisco as of June
2017. Among the TNC businesses operating in the city, the SFTNCA reports that only 29% are
actually based in the city. Among the remaining businesses, 61% are actually distributed across
different counties in the bay area and 10% are based in locations outside the bay area. Because
a great percentage of TNC drivers come from outside San Francisco, there is also large
demand for temporary living facilities such as Crashpadz Inc.. The breakdown of TNC
businesses by their registration areas is found in the table below.
Figure 12: TNC Businesses in San Francisco by Area of Registration
COUNTY PERCENTAG
E
Alameda 21%
Contra Costa 12%
Marin 2%
Napa 0%
San Francisco 29%
San Mateo 16%
Santa Clara 6%
Solano 2%
Sonoma 1%
Outside Bay Area 10%
TOTAL 100%
Local Target Markets
Crashpadz Inc. will open two new properties potentially within San Bruno, 94066; Oakland,
94610; and Daly City, 94015. The Company’s expansion aims to better capture the large
potential demand for its services in San Francisco. According to the San Francisco Office of
Economic and Workforce Development, the city’s labor force is constituted by 734,665
individuals. As of July 2018, the Bureau of Labor Services estimates that employment in the
area grew by 1.6%. Newly employed individuals may need short-term living facilities, especially
those who are coming from other areas outside the city. Further, among the entire work force
of the city, more than a third (247,465) are in-bound commuters to San Francisco. These
individuals are also potent target markets for the Company.
In addition to the different target markets presented above, Crashpadz Inc. will also aim to
attract individuals who are transitioning to their new homes. According to Trulia, there were
15,432 homes that were sold in San Francisco in the past 12 months. These home buyers may
also require a temporary place to stay while they are transferring to their newly bought homes.
In terms of seasonality, based on data provided by Trulia, home sales typically reach its peak in
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June - July. It then remains relatively stable until January, where it starts to decline. February,
March, and April are typically low months for the San Francisco housing market.
Additional information regarding the population, income, demographics, and spending of the
Company’s local target markets are provided in the following tables.
San Bruno - 94066
Consumer Spending
The spending for lodging within a mile radius from San Bruno is at $6,870,956 and shoots up
to $38,417,550 and $74,739, 607 within a 3-mile and a 5-mile radius from San Bruno,
respectively.
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Figure 13: Consumer Spending (ESRI, 2017)
Variable 94066, San
Bruno,
California (1
mile)
94066, San
Bruno,
California (3
miles)
94066, San
Bruno,
California (5
miles)
Travel - Lodging on Trips $6,870,956 $38,417,550 $74,739,607
San Bruno Real Estate Trends
According to Trulia, median home sales prices in San Bruno increased by $243,000 (28%) over
the past year. Average price per square foot also rose to $915 from $737. In terms of length of
commute, Google Maps estimates that driving to San Francisco from San Bruno takes 24 mins
via US -101 N and 28 mins via I-280 N. Additionally, it takes 22 - 26 mins via transit options to
reach San Francisco. Further, Trulia notes that San Bruno is a generally safe place to live in.
Specifically, areas traversed by Fernwood drive, Berkshire Drive, Green Avenue, Georgia
Avenue, Rollingwood Drive, Shelter Creek Lane, and Pepper Drive were highlighted by Trulia
as safe neighborhoods.
The table below the median sales price of properties by the number of bedrooms. Based on
Trulia’s information, the biggest jump in prices was from 1-bedroom properties, increasing by
22.4% compared to the last year.
Figure 14: San Bruno Median Sales Prices (Trulia)
No. Bedrooms Jun 20 - Sep 19 YOY Growth 3 months prior 1 year prior 5 years prior
1 Bedroom $551,000 22.40% $545,750 $450,000 $283,000
2 Bedroom $850,000 17.20% $810,000 $725,000 $477,000
3 Bedroom $1,250,000 18.90% $1,215,000 $1,051,000 $735,000
4 Bedroom $1,405,000 17.10% $1,367,000 $1,200,000 $727,000
All Properties $1,108,000 28.10% $1,075,000 $865,000 $523,500
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Oakland - 94610
Consumer Spending
The spending for lodging within a mile radius from Oakland is at $17,451,812 and increases to
$81,778,264 within 3 miles and $143,256,718 within 5-miles from Oakland.
Variable 94610, Oakland,
California (1
mile)
94610, Oakland,
California (3
miles)
94610, Oakland,
California (5
miles)
Oakland Real Estate Trends
According to Trulia, median home sales prices in Oakland increased by $90,000 (14%) over the
past year. Average price per square foot has also gone up to $598 from $537. In terms of
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length of commute, Google Maps estimates that driving to San Francisco from Oakland takes
27 mins via I-80 W. Additionally, it takes 13 - 20 mins via transit options to reach San Francisco.
Further, Trulia notes areas including North Stonehurst, Glenview, Upper Rockridge, Crestmont
and Sequoyah are generally safe neighborhoods in Oakland.
The table below the median sales price of properties by the number of bedrooms in the area.
Based on Trulia’s information, the biggest jump in prices was from 2-bedroom properties,
increasing by 17.2% compared to the last year. Overall, the value of properties in the area have
grown by 70.5% compared to the past five years.
Figure 16: Oakland Median Sales Prices (Trulia)
1 Bedroom $506,500 4.00% $527,500 $487,000 $315,000
2 Bedroom $703,000 17.20% $672,500 $600,000 $410,000
3 Bedroom $864,500 10.80% $900,500 $780,000 $495,000
4 Bedroom $1,020,000 7.30% $1,200,000 $951,000 $684,500
All Properties $750,000 13.60% $735,000 $660,000 $440,000
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Daly City - 94015
Consumer Spending
The total spending for lodging within 1-mile radius amounts to $8,778,196, $51,183,474 within
the 3-mile radius and grows further to $170,308,176 within the 5-mile radius from Daly City.
Variable 94015, Daly
City, California
(1 mile)
94015, Daly
City, California
(3 miles)
94015, Daly
City, California
(5 miles)
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Daly City Real Estate Trends
According to Trulia, median home sales prices in Daly City increased by $105,000 (12%)
compared to the previous year. Average price per square foot also increased to $784 from
$671. In terms of length of commute, Google Maps estimates that driving to San Francisco
from Daly City takes 17 -18 mins via I-280 N. Transit options from the area take only slightly less
time, at 16 minutes, to reach San Francisco. Further, Trulia notes that Daly City is a safe place to
live in. It highlights areas including Bayshore and the nearby town of Colma as areas that are
safe.
The table below the median sales price of properties by the number of bedrooms in Daly City.
Huge increments in prices for 1-bedroom properties and 4-bedroom properties were reported
by Trulia. Overall, the value of properties in the area have grown by 65.3% compared to the
past five years.
Figure 18: Daly City Median Sales Prices (Trulia)
1 Bedroom $537,500 22.90% $476,000 $437,500 $296,000
2 Bedroom $837,000 9.80% $882,500 $762,500 $451,500
3 Bedroom $1,015,000 15.70% $1,020,000 $877,500 $625,500
4 Bedroom $1,244,000 23.80% $1,189,000 $1,005,000 $684,000
All Properties $975,000 12.10% $985,000 $870,000 $590,000
Competitive Analysis
Competitive Overview
According to IBISWorld, the Bed & Breakfast and Hostel Accommodation industry
concentration is low. Most bed and breakfast (B&B) establishments were reported to be
owner-occupied and having only eight rooms. In 2018, the top four industry players earn well
under 5.0% of total industry revenue. Hostels, however, can vary from 25 beds in rural areas to
up to 500 beds in central city locations. Due to the nature of the industry and its requirement to
maintain very high levels of personal hospitality with guests, few operators run more than one
establishment. Also, it is not surprising that nearly 87.0% of establishments are small-business
operators with nine or fewer employees. There are also no operators that employ more than
250 people. Given the structure of this industry, IBISWorld estimates that this concentration
level is unlikely to change over the next five years.
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Crashpadz Inc. will be directly competing with Marriot, Hotel V, Budget Inn, and Motel 6. The
Company will supplant its competitors by providing superior services and amenities. The
Company places great importance in the cleanliness and overall maintenance of its beds,
rooms and the entire establishment. Further, Crashpadz Inc. will be providing movie projectors,
coin operated washers & dryers, virtual reality game, Play Station 4s, Xbox 1s, and television
sets.
Additionally, Crashpadz Inc.’s target locations provide easy access to transportation as well as
safe and secure communities. The Company further ensures the safety of its guests by installing
CCTV cameras in key areas of each establishment. These features of the establishment are
provided in order to provide guests with the best possible experience during their stay. More
importantly, Crashpadz Inc. will be providing all mentioned services, features, and benefits at
very competitive prices, much lower compared to other hotels and motels in its various target
locations. These elements of the Company’s strategy will enable Crashpadz Inc. to outpace its
competitors, regardless of their company size and years of operation.
Major Competitors
Figure 19: Marriott
Marriott
Company Overview
Marriott International, Inc. operates, franchises, and licenses hotel,
residential, and timeshare properties worldwide. As of September 5, 2018,
it operated approximately 6,700 properties under 30 hotel brands in 130
countries and territories. Marriott International, Inc. was founded in 1927
and is headquartered in Bethesda, Maryland.
The San Francisco Marriott Marquis Hotel has 39 floors, 1362 Rooms, 138
suites,
65 meeting rooms, and a 128,245 sq ft of total meeting space.
Website https://www.marriott.com/
Location and Contact
Details
780 Mission St, San Francisco, CA 94103, USA
415-896-1600
Services and Price
Points
Room Rates : San Francisco Marriott Marquis
Guest room, 2 Double, Low floor: $259
Guest room, 1 King, Low floor: $269
Guest room, 2 Double, City view: $269
Guest room, 2 Queen, Low floor: $294
Larger Guest room, 2 Double, City view, Corner room: $299
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Larger Guest room, 1 King, City view, Corner room: $314
Executive Suite, 1 King, Low floor: $319
Guest room, 2 Queen, City view: $319
1 Bedroom Junior Suite, King: $334
Larger Guest room, 2 Queen, City view, Corner room: $334
M Club lounge access, Guest room, 1 King: $359
Room Rates: San Francisco Union Square
1 King Bed: $249
2 Double Beds: $249
2 Double Beds, Deluxe Guest Room: $264
1 King Bed, Bay View: $284
2 Double Beds, Bay View: $284
2 Double Beds, City View: $284
1 King Bed, Corner , Junior Suite: $309
1 King Bed, Bay View, Corner, Junior Suite: $344
Other Amenities
Full service spa
Fitness center
Meeting event space
Parking
Internet access
Customer Reviews
Google Reviews: 4.4 out of 5 (5,032 reviews)
TripAdvisor: 4 out of 5 (6,801 reviews)
Yelp: 3.5 out of 5 (946 reviews)
Facebook: 4.3 out of 5 stars (2,443 reviews)
Key Strengths and
Weaknesses
Strengths: Great panoramic view of San Francisco, close and accessible to
key transportations, trusted global brand
Weaknesses: Expensive rates.
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Figure 9: Budget Inn Budget Inn
Company Overview
Budget inn is a 2.5 star, non-smoking hotel accommodation according to
TripAdvisor.
Website
Budget Inn does not have its own website. Links provided in review
websites
Details
1139 Market St, San Francisco, CA 94103-1513
Services and Price
Points
According to TripAdvisor, Budget Inn has 20 non-smoking rooms. Pricing
estimates in Yelp indicate that the rates of Budget Inn are very cheap.
Other Amenities Free Internet access
Customer Reviews
Google Reviews: not available
TripAdvisor: 1.5 out of 5 (73 reviews)
Yelp: 1 out of 5 (36 reviews)
Facebook: not available
Key Strengths and
Weaknesses
Strengths: Cheap.
Weaknesses: Lack of cleanliness, very poor reviews, does not have its own
website.
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Figure 10: Motel 6
Motel 6
Company Overview Motel 6 provides boarding and lodging services. It was formerly known as
La Quinta Inn and changed its name to Motel 6 in August 2013. Motel 6 is
based in Tulsa, Oklahoma. As of January 18, 2017, Motel 6 operates as a
subsidiary of Maankee Hospitality LLC. Motel 6 operates an establishment
in Geary Street, San Francisco, CA 94109.
Website https://www.motel6.com/en/motels.ca.san-francisco.4330.html
Details
895 Geary St, San Francisco, CA 94109, USA
415-441-8220
Services and Price
Points
Room rates: +$10 for each additional adult
1 King bed: $175.99
2 King beds: $175.99
2 Queen beds: $175.99
2 King beds, Suite: $225.99
Key Amenities
Kids stay free
Free expandable cable
Pets allowed
Free coffee
Free local calls
Free Wifi
Other Amenities Disabled-friendly rooms
Accessible to mass transit
Elevator
Beach within 10-miles
Airport within 20-miles
Refrigerators in guest rooms
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Customer Reviews Google Reviews: 4.5 out of 5 (5 reviews)
TripAdvisor: 3 out of 5 (263 reviews)
Key Strengths and
Weaknesses
Strengths: Decent rooms, ample pricing of rooms for its quality
Weaknesses: Some parts of the neighborhood are quite loud and unsafe,
Parking space though free is accessible to anyone thus compromising
safety,
Figure 9: Hotel V Hotel V
Company Overview
Hotel V is a boutique hotel that is located 7 minutes away from the San
Francisco International Airport. It features luxury accomodations with
highend décor, furniture and others. It also highlights its proximity to
popular landmarks, city attractions, restaurants, transportation and
shopping centers.
Website https://www.hotelvsfoairport.com/
Details
222 S Airport Blvd, South San Francisco, CA 94080, USA
650-589-9055
Services and Price
Points
Room rates: +$10 for each additional adult
Queen: $100.28
King: $109.48
Double Queen: 118.68
Queen ADA Accessible: $100.28
Other Amenities Free WIFI and Data Ports
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Free Local Calls
Room Appliances
Full bath
Cable TV
ADA Accessible Rooms
Customer Reviews
Google Reviews: 3.6 out of 5 stars (192 reviews)
Tripadvisor: 3.5 out of 5 stars (650 reviews)
Key Strengths and
Weaknesses
Strengths: Proximity to San Francisco International Airport. Decent website
and online booking function.
Weaknesses: Customers complain about poor service, different pricing (as
to what is advertised in the website), rude staff, poor reservation
management and more.
SWOT Analysis
Strengths Weaknesses
• Lowest price in Market
• Low operating costs
• Ability to generate significant volume due
to multiple beds in each bedroom
• Offers one of the best cap rates
• Clean and well-maintained facilities
• Useful amenities for every traveler
• Good Social Media Engagements
• Flagship property is strategically located
near public transit, major highways, and
within a safe neighborhood
• Unique hostel format that is extremely
popular among younger travelers
• Limited control of rental properties.
• Crashpadz Inc. pays over 150k in rent and
gains no equity in properties.
• Crashpadz Inc. needs a dedicated
acquisition officer.
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Opportunities Threats
• Website has the potential to become a
travel aggregator for hostel listings
• The ability to license the brand to other
independent operators provides lucrative
franchising opportunities while growing
the brand without significant overhead
• Global expansion also offers lucrative
opportunities to profit from tourism and
economic growth in other countries
• Political, economic, and social issues
beyond the Company’s control may
threaten the value of its real estate and/or
may cause a decrease in tourist arrivals
• Any downturn in the local economy of
San Francisco may decrease the number
of people going to the Bay Area for
business purposes
• As younger travelers become more
affluent they may switch to more
expensive forms of accommodation
Marketing Plan
Marketing Overview
Crashpadz Inc. will continue to implement an integrated marketing strategy, relying heavily on
digital marketing and direct marketing initiatives to expand its business and become the go-to
Crashpad for guests seeking short-term accommodations within the Bay Area. Crashpadz Inc.
will increase its reach within the Bay Area by continuing its marketing efforts on several lodging
reservation websites such as www.booking.com, www.expedia.com, www.hostelworld.com,
and more. Crashpadz Inc. will ensure that each new property is hosted on these websites while
providing a budget for web ads and pay-per-click marketing to boost their presence among
potential customers. Crashpadz Inc. also has its own booking website
(https://www.uscrashpadz.com/) which will also be updated with new properties. The Company
deeply understands the long-term importance of good feedback and customer relations on
various social platforms and review sites. Thus, Crashpadz Inc. will continue building positive
experiences for every customer in order to encourage more positive word-of-mouth referrals
and five-star reviews for its current and future locations. We use Review Boost as our online
reputation management partner. These initiatives will help Crashpadz Inc.’s reputation online
and will help deliver more guests to the business as it grows.
Marketing Goals
The goal of the Company’s marketing plan is to raise awareness and demand for the
Company’s current and future locations while reinforcing an image based on convenience and
comfort. Doing so will result in the Company’s ability to attract more guests and acquiring a
greater share of the overall market. Crashpadz Inc. will continue to use the following marketing
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channels and tactics to grow demand for accommodations and strengthen customer
satisfaction levels.
Direct Marketing Initiatives
Word-of-Mouth Referrals
Positive client testimonials and reviews are one of the strongest forms of advertising and can
be a key decision point for many potential customers. Data from the White House Office of
Consumer Affairs shows that news of bad customer service reaches more than twice as many
ears as opposed to praise for a good service experience. Furthermore, loyal customers are
worth up to ten times as much as their first purchase.
Cultivating satisfied clients is therefore extremely valuable and profitable towards a business as
their opinion and endorsements with colleagues, friends, or family can help result in significant
recurring demand for accommodations with Crashpadz Inc. Every positive experience with
Crashpadz Inc. encourages guests to share their experience with others. Understanding this,
the Company will continue to provide positive experiences worth sharing, and a rewards
system for those who do.
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Operational Structure
Corporate Information
Ownership Zameer Azam/Jason Voelker
Business Entity Crashpadz Inc./S-Corp
State of Registration California
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Corporate Organizational Tree
36

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