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Tourist Submarine Underwater Travel


Project No: #18340
Capital needed
USD 1,700,000
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Minimum investment per investor: 100000
Country: Australia
State: Queensland
Reason for needing Capital: Equipment or Inventory
Stage: Pre-Startup
Ideal Investor Role: Equity partner
Highlights: Submarine tours are an exciting and unique attraction suitable for people of any age and abilities.
Attraction is new to Australia with no competition.
Gold Coast is a popular destination for holiday makers all year around. Visitors are spending over $400 000 000 on entertainment yearly.
The business will attract interest of established entertainment business groups opening new perspectives for development.
There are only few offshore submarines currently available on the world market.
What you offer to investors?: We offer up to 15% return for loans or 12% for Convertible Note Agreements based on 3 years term and 30% equity discount.
Shares can be converted at any time after one year of operations.
Sale of the company will be considered after 3 years.
Business plan:
Executive summary:
Additional documents:

Offer overview

We are offering you to take part in development of the Tourist Submarine attraction in multiple locations over span of 5 - 7 years. Submarine Tourism has been proven to be an extremely profitable business in various destinations around the world but it hasn't been established in Australia yet.

The projected valuation of the business after first year of operation is expected to be AU$ 2 800 000 - $2 900 000 approximately. There are 2 200 000 voting shares on offer priced at AU$ 1 each.

The most of the project funds will be applied towards the Tourist Submarine purchase (AU$1 650 000) with the reminder (AU$ 550 000) being a cost of the Submarine delivery and operational set up. The Business plan provides details of all expenditures.

The business equity will compile the value of the Tourist Submarine itself, operational assets, such as floating pontoons, maintenance / safety equipment and tourists transportation means, as well as, the value of the commercial Surface Vessel (AU$ 250 000) which is a compulsory part of the attraction.


Executive summary

The aim of the project is to establish the Tourist Submarine attraction based on the Gold Coast, Queensland, Australia. The Tourist Submarine will operate all year around performing 5 daily tours on average, taking visitors for 40 minutes dive at a diving site located within 20 -25 minutes travel time from the departure location.

Gold Coast is enjoying consistent growth of inbound tourism, reaching over 12 million visitors per year. It is famous for featuring 3 biggest in Australia theme parks and beautiful white sand beaches which attract visitors. It is a place of many social and sporting events with the Commonwealth Games taking place in 2018. Due to its uniqueness, we identified Gold Coast as a prospective location for the attraction and completed environmental research into suitability of dive sites within the area.

Local government and  the Australian Maritime Safety Authority have been consulted and as result, a submarine, which is suitable for offshore diving , has been identified and inspected. To continue with the project , we are looking for strategic partners who will invest up to AU$ 2 200 000 offering 15% return on investment yearly. We are happy to contribute our own assets in a form of Commercial Vessel, which is required to accompany the submarine and local expertise in marine tourism to ensure successful operation of the attraction.

DownUnder  Submarines Pty. Ltd. has branched  out of a sole trading entity “Reef Jet Tours“, which has been providing Whale Watching tours on the Gold Coast for the last two years. As result, we have highly professional crew and maintenance networking in place. Additionally, our crew will undertake specific Submarine Pilot and maintenance training program provided by the Supplier based overseas and in Australia.

 

Key statistics

Breakeven point for the Gold Coast based submarine is around 15 000 passengers per year.

One extra passenger on each tour adds up additional $150 000 of revenue each year.

An investment repayment time is 3 years.

The life expectancy of crucial components of the submarine after refit is 10+ years.


Business model
The business will operate from Runaway Bay marina where submarine will be undertaking maintenance during night time. Runaway Bay marina has suitable service areas and an office space for a lease.

The Tourist Submarine will operate all year around performing 5 daily tours on average, taking visitors for 40 minutes dive at a diving site located within 20 -25 minutes travel time from the departure location. Estimated down time for this business model is 110 days per year.

The departure location will be established within Broadwater Parklands and will consist of a floating pontoon  (6 x20m) for embarking and disembarking, as well as it will serve as a point of sale location (tickets, souvenirs, photographs).

As the submarine is traveling in afloat position to a dive site, it will be accompanied by the Surface Vessel as a part of Safety Management Procedures. The Surface Vessel will carry safety equipment on board, as well as, it will provide safe conditions for re floating of the submarine at a dive site location. In addition, 2 divers, based on the Surface Vessel, will provide underwater entertainment for passengers e.g, fish feeding, taking photos.

Majority of the ticket sales will be processed online vie Bookeo / Stripe integrated system, which we have been using over the last two years. Customers will be offered incentives in a form of discounts, to encourage booking online and to attend early morning tours.

Due to exclusivity of the business, we expect to be first paged on Google, as well as, we'll utilize Google AdWords as a marketing tool. In addition, we'll be working with our current partners Gold Coast Tours Guide, Groupon and Walsh Media to promote the business. The submarine will be on display for public in strategic locations on the Gold Coast and Brisbane prior to operations.

In a long term perspective, we have identified two suitable dive sites which will require two additional submarines to operate. One site is located within 30 minutes drive from the original site which will allow to provide service on interruption free basis. The other one based at a popular tourists destination in close proximity to the best shipwreck dive site in Australia HMAS Brisbane which is a consistent interest of visitors.

In a meantime, we have secured close personal contact with the original designer / engineer of this type of submarines. Saying so, there are only 3 submarines which are suitable for offshore diving in the world, which will help to eliminate competition. Also, it takes 2 years to build a new machine at the cost of 5 250 000 EUR.


Strategy & vision

Our vision is to expand our services to two other dive sites reinvesting funds in purchase of additional machines. The time frame for this accomplishment is between 5 and 7 years.

The revenue growth can be stimulated through introduction of semi submerged tours in sheltered waters during unsuitable weather offshore, for 50% discount, which will increase a number of operational days.  Providing night dives at a secure location is an another option.

Based on the company's experience, we'll be able to provide a formal training for Submarine Pilots and Maintenance Crew to interested parties in case of the business expansion.

The submarine can be a subject for government contracts to perform specific tasks. Also, teaming up with a bigger player, such as Sea World theme park, will provide additional flow of passengers.

Lastly, purchase of a bigger capacity machine (42 passengers) will result in higher profit margins. As it has been mentioned previously, one extra passenger on each tour equals $ 150 000 increase in revenue on yearly basis. So, a bigger capacity machine will be able to generate additional 1 - 1.5 million of profit per year.


Market overview

The Tourist Submarine market overview is documented in the attachments.

In regards to development of the business worldwide, I would like to note that Tourist Submarines are in constant demand, which is evident from data provided by Underwater Vehicles Inc. an official seller of second hand and new submarines.

The market is expanding, in particular due to lower cost of second hand submarines which became available, since major companies are upgrading their fleet. The recent example is Turkey, which has acquired fully refitted second hand submarine in 2016.

 

Target market

We are targeting local and inbound visitors to the Gold Coast. As it has been said earlier, the numbers are reaching 12 million visitors per year and growing at 9% rate according to the Hospitality Industry reports. Gold Coast holiday makers are spending over $400 000 000 on various types of entertainment each year.

Our proposed charges to attend the attraction are affordable for most of the visitors and based on exclusivity of the Tours, as well as, comparability to other kinds of entertainment available.

Marketing products will be available online, vie our partners Gold Coast Tourist Guide, Groupon and Walsh Media, as well as, through chain of Hotels which will be offered a shuttle bus service for their clients.


Competitive landscape

The Tourist Submarine attraction doesn't have competitors in Australia. There are companies offering semi submersible tours only at the Great Barrier Reef.  The charge for their service is $150 per adult, which is higher than we are offering.

Our tours are completely safe and suitable for all ages and have no limitations in regards to medical conditions, unlike any small (2-3 persons) underwater machines.

Comparing to diving sites operators charging at around $100 per person, the Tourist Submarine Tour doesn't require specific preparation or equipment hire and is a very convenient alternative to experience underwater world.


Potential returns

The potential return on investment will be within 100% over 3 years of operations. There could be a prospective buyers on the way, for example Sea World Theme Park owned by the Roadshow Village Inc. We believe the future of the company in this regard should be in line with decision made by major shareholders.

Please refer to the Financial Forecast attached for details.

 

Who is behind it

Andrey Alexeenko - Director

Sasha Alexeenko - IT, Marketing

Damien Catran - Skipper, Chief of Maintenance

Raymond Taggart - Accounting (Director of Taggart & Partners)

Madeleine Hunt - Lawyer (Legal Vision)

Shaun Thomas - Head of Operational Safety (Australian Maritime Safety Authority)

Jack Betton - Underwriter (Trident Marine Insurance)

Tom Tate - Gold Coast Mayor

Jonathan Newman - Director of Underwater Vehicles Inc.

Jose Ramon Regueira - Sales Manager (Nodosa Shipyard)





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