Wag Hotels Investor Pitch 2008
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Transcript of Wag Hotels Investor Pitch 2008
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Wag Hotels: Chain of Hotels Exclusively for Dogs and Cats
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• A chain of hotels designed exclusively for dogs and cats
• Designed for the lifestyle of the urban middle-class
• Convenience open 7 x 24 x 365
• Luxury suites with web cameras & plasma TV
• First location performing well in Sacramento
• San Francisco location open this week, Sunnyvale to open in Sep 07.
• Plans to open another 40 locations in the next 5 years
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Pet market is $35.9B, growing at 5% “Do you realize Americans will spend $35.9 billion this year on their pets? That compares to $20 billion spent on kid’s toys in 2003 and $24 billion on candy.” 63% of all American households have a pet 90% of the dogs owned by city dwellers 2005 there were 74 million dogs compared to 60 million in 2003
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Dog population
37% of all households have at least one dog
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Distribution of 11,000 kennels based on revenue
Less than $200K 91.9%
$500K to $900K 1.3% $1M or higher
0.7% $200K - $500K
6.1%
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Market opportunity
• Highly-fragmented market
• Underdeveloped
• Unregulated
• Homogenous consumer
• Economies of scale
• Easy standardization
• Number of households with pets is growing
• Real estate rates are attractive for retrofit-capable buildings
• Recession proof business
Humanization of pets: Considered part of the family.
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§ Traditionally a small (Mom & Pop) business
§ No brand recognition
§ Business run on goodwill and reputation
§ Series of stores all over the world
§ Professional management, process & service excellence
§ Consistent customer experience
§ Brand recognition
Coffee Shops Scale + Brand
Starbucks
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Wag Hotels Dog owners spend $2.6 billion annually on boarding
§ Traditionally small (Mom & Pop) business
§ No brand recognition
§ 11,000 businesses generating a combined revenue of $2.6 billion
§ Grown organically; operated on a need basis
§ Business revenue dependent on goodwill & reputation
§ Chain of dog hotels in convenient locations all over the US
§ Homogeneity
§ Brand recognition
§ Professional management, process & service excellence
§ Superior customer service and experience through innovative technology
Dog Kennel & Boarding Scale + Brand
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Wag Hotels -- Sacramento
Cattery"
Intake Room" Dog Rooms
180"
Reception"
Drive Thru"
Corporate Offices"
Indoor Play Area (6000 Sqft)"
Grooming"
Suites"
• Wag Hotels model is based on retrofitting light industrial warehouses
• 34,000 sq ft facility with advanced air exchange, fire suppression and sound baffling systems
• Design is focused on providing comfort, safety and a healthy environment for guests
Capacity
180 Dogs
25 Cats
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Wag Hotels - San Francisco 35,000 square foot facility
– Premier location – 2 story building – Roof deck for outdoor park
Capacity
250 Dogs
25 Cats
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Amenities: Swimming Pool
$25 for 20 min
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Luxury Suites
$72 a night, oversold
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Massage
$30 for 15 min
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Interiors: Wag Hotels SF
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Strong Brand
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16
• Modern • Stylish • Hassel-free • Innovative and clean • Upscale • Fun and enjoyable • Memorable • All about pets!
Brand Value
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Expansion 2007 Opened San Francisco, will open Sunnyvale and Oakland
2008 Expansion into Southern CA (3-4 locations)
2009 onwards Open 5-6 new locations across the US
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Revenue and Dog Nights
$134,228
$233,042
$322,629 $294,503
$258,484
$505,118
$904,045 $878,235
3,133
5,778
7,869 7,183
5,391
10,807
16,858
17,206
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
06 Q1 06 Q2 06 Q3 06 Q4 07 Q1 07 Q2 07 Q3 07 Q4
Revenue Dog Nights
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Sacramento 2006 - 2007
13%
26%
20%
29%
34%
43%
57%
45%
40% 40%
29%
36% 36%
45% 45%
60% 64%
54%
41%
48%
0%
10%
20%
30%
40%
50%
60%
70%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
SAC Occupancy 2006 SAC Occupancy 2007
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Revenue & income over 10 yrs, 42 locations
$949 $4,713
$19,875
$35,956
$51,230
$65,478
$79,727
$94,980
$109,231
$123,484
-$1,384 -$753
$4,525 $11,284
$17,986 $24,243
$30,246 $37,252
$43,352 $49,320
-$20,000
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
YR 1 YR 2 YR 3 YR 4 YR 5 YR 6 YR 7 YR 8 YR 9 YR X
Revenue EBITDA
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Ritu Raj- CEO Seasoned executive and entrepreneur in IT services sector for 20 years. • Partner at Accenture, Head of Oracle practice for high-tech clients in the Western US • Founder and CEO of Avasta, an application hosting company (MSP), raised more than $100M • VP Sales at TMP Worldwide (acquired SystemOne and AT Systems), managed revenue in excess of $1 billion
Bob Goldberg – President • 35 years experience in consumer products industry • Senior management positions with CBS Retail Stores/Pacific Stereo Division, Music Factory, Worlds of Wonder,
Intelligy, Mindscape, and most recently Pay By Touch • Retail experience includes over 15 years in every aspect of retail store operations including marketing
Charles Dible-VP Finance • Responsible for smooth and viable financial operations • Prior entrepreneurial and financial experience • Previous roles include 12 years as CFO of Astante technologies and Pixar Shane Stent-Director of Business Development • Responsible for property development and retail sales operations • Prior management roles include at Nike and Fortune 500 companies • Background in animal care Jose Gonzalez-Director of Pet Services • BS UC Davis in Animal Science; City of Sacramento Animal Care Service, Senior Technician and Supervisor • Responsible for care of 400+ dogs at any time, evaluations of all incoming animals and staff training • Supervised and scheduled 14 animal care technicians Laura Bourret-VP Hotels • Hotel Executive with 21 years experience • Founder of ARROW Marketing Group, luxury hotel operations and marketing consulting firm • Responsible for hotel operations and development
Key Management
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David Appel -Chairman of Board of Directors • Chairman and CEO of Vision LLC • Prior roles include Chairman and CEO of Orange Glo International, sold in 2006, and partner at Accenture • Served on board of Petco Animal Supplies through 2006 Brian Miller – Director on Board of Directors • EVP, Strategic Alliances for Pay By Touch • Previously spent 28 years at Accenture • Currently also on Boards of Pay By Touch, Viking Systems, and M-Factor Ritu Raj- CEO • Seasoned executive and entrepreneur in IT services sector for 20 years. • Partner at Accenture, Head of Oracle practice for high-tech clients in the Western US • Founder and CEO of Avasta, an application hosting company (MSP), raised more than $100M • VP Sales at TMP Worldwide (acquired SystemOne and AT Systems), managed revenue in excess of $1 billion
Monte Miller – Advisor and Board Observer • 40 years of Investment Management and trust banking experience • Founded KeyState Corporate Management • Previously SVP for Bank of America, Nevada
Jon May – Advisor and Board Observer • 15+ years experience with large consumer-branded companies • Co-founded Catalytic Capital • Previously SVP of Triarc Companies and Chairman and CEO of Triac Restaurant Group (Arby’s)
Board of Directors
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History • Raised series A
from friends and family $1.8 million
• Raised series B from friends and venture capital firm $ 6 million for post valuation of $10 million
• Current funding will take to break even in 2007
• Additional funding in the range of $10-$15 million end of 2007
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Thank You
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New Product and Service Opportunities
Wag Media
Wag Academy
Wag Magazine Wag Space
Wag Jewelry
Wag Corporate
Wag Stores Wag Salon Wag Singles
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Rate Occupancy
Labor Rent / Utilities
t Currently, Wag prices slightly higher than traditional kennels, even though it provides a far greater service offering
t Pricing does not include add-on services in the offing
t Wag’s brand equity will permit higher pricing going forward
t Occupancy varies by month t Conservative: 37%
occupancy in first year, going to 65% occupancy in year 2
t Traditional urban kennels do up to 85% occupancy
t Estimates do not account for brand recognition, corporate programs, etc.
t Labor is the single largest controllable expense item
t Right people, right jobs at the right time:
§ Conversion of full time staff to FTE utilization model
§ Increased retention
1 2
3 4
Operating Economics Build out Economics
1
2
Tenant Improvement
Equipment
t HVAC & Air Circulation t Plumbing t Epoxy Flooring t Thicker walls t Noise control t Reception and boutique
t Dog runs t Grooming tubs and supplies t Security and Web Cameras t Computers and networking
Unit Economics Drivers