cvfd1399 0 #1 February 16, 2005 "This is not about any DZ, just a discussion about what it might look like to run a DZ with an Regular Twin Otter, just numbers to think about." You always hear that tandems are the big business, and keep a DZ open, or keep a DZ's large plane. If DZ X makes 45 loads a year due to bad weather on some weekends and this DZ brings up an a average of 20 tandems a weekend at $175.00. That means in a year not counting all the stuff like fuel, pilot, gear, paying the jm that dz will bring to the table $157,000.00 in tandems alone. Say that the DZ has a bad year and only gets 4 tandems a weekend that comes out to $31,500. If that same dz is open 45 weekends and takes up 20 loads of jumpers, with just 15 jumpers per load at $20 a person that DZ makes $270,000.00 If you make all the loads short loads with only 9 jumpers on the load that comes out to 162,000.00 If you fly the same number of loads, but you put 18 jumpers in the otter every load you stand to bring in $324,000.00 It takes 9 regular jumpers at $20 a jumper to equal a $175 tandem Combined that makes a good year of tandems and jumpers come out to $427,000.00 A bad year comes out to 193,5000.00 A good year of Tandems and a bad year of jumpers is $319,000.00 A bad year of Tandems, and a good year of Jumpers is $301,500.00 If you could be so lucky to fly full loads of tandems all year long at 175 a jumper you would make $1,638,000.00!!! a year Of course that is not calculating operating costs and all that, just some numbers to look at. So that means if DZ X cannot jump tandems it stands to loose $127K a year, and it could only make up $54K of that by flying 18 jumpers per load. My math sucks my head hurts, but I think I got some numbers to look at for fun. Quote Share this post Link to post Share on other sites
FrogNog 1 #2 February 16, 2005 Your revenue numbers show tandems producing 4.5 times the revenue of regular jumpers (I will call this "excess revenue factor") on a per-slot basis. This supports the claim that tandems pay for the rest of jumping, but I'd like to see incremental cost added to the numbers to see what the per-slot "excess profitability factor" of tandems over regular jumpers is. -=-=-=-=- Pull. Quote Share this post Link to post Share on other sites
ChrisL 2 #3 February 16, 2005 Whats the point behind all your figuring? I'm not exactly clear on what point you are trying to make? Since even your own numbers dont disprove the theory that tandems bring in the lions share of the money.__ My mighty steed Quote Share this post Link to post Share on other sites
cvfd1399 0 #4 February 16, 2005 In my perfect Otter world I think without video guys you would get 9 slots for tandems at $175 a head equaling $1575 a load full of tandems. Jumpers get 18 slots at $20 a slot equaling $360 a load If jumpers wanted to throw a mutany at this DZ X take over and say "Fuck the Tandems' we want to jump this Air Ship (/Pun) The jumpers would have to pay $87.50 a slot to equal what the dz would make if they only jumped tandems. So $87.50 is what a slot is worth if that is what you were looking for. Quote Share this post Link to post Share on other sites
cvfd1399 0 #5 February 16, 2005 There is no point against anything or anyone, it is just some numbers I tried to play with to put out on paper showing what we already know. Quote Share this post Link to post Share on other sites
tombuch 0 #6 February 16, 2005 Alright, I'll buy your math, now think about mine. That tandem customer is going to make one jump in his lifetime at $175.00, but a fun jumper making 100 jumps each year at $20.00 each is worth $2,000.00 in jump revenue each year! If the profit on each aircraft slot is $2.00, the fun jumper will generate $200.00 in jump profit each year. The fun jumper will also be buying gear from the store, and food from the DZ restaurant. Plus he will be bringing a few friends along to make those $175.00 tandems. And, the fun jumper will be back next season, and the season after that. Who is the better customer?Tom Buchanan Instructor Emeritus Comm Pilot MSEL,G Author: JUMP! Skydiving Made Fun and Easy Quote Share this post Link to post Share on other sites
cvfd1399 0 #7 February 16, 2005 I agree. My experiences so far have been that my DZO cares freaking TONS about his regular jumpers. From what others say individually and as a whole, that is not always the case due to DZO's personal ethical reasons which can be poor. For some there is a general understandable want to survive as a business which can only be supported by tandems bumping jumpers for slots. Quote Share this post Link to post Share on other sites
kelpdiver 2 #8 February 16, 2005 repectfully, this is an illustration of garbage in, garbage out. The numbers you used to play with seem to be nowhere near reality (a twin otter DZ doing 900 tandems a year??), and only examines gross revenue. TMs get paid and tandem gear depreciates. Tandem passengers are probably a bit more likely to sue for injuries in a bad landing. If the question is about whether or not it makes business sense to become a tandem factory, you need to start with decent data points, and to keep in mind that changes in busines practices will change that data. FWIW, the one place around me that would be considered a tandem factory would appear to be doing worse than the others, and often is using the little plane because of limited loads. Given my sample sets for comparison are limited, that's just a guess. Quote Share this post Link to post Share on other sites
billvon 3,114 #9 February 16, 2005 >Of course that is not calculating operating costs and all that . . . I think that's a pretty big omission, there. Operating costs (and one time costs) are pretty much the key. Quote Share this post Link to post Share on other sites
cvfd1399 0 #10 February 16, 2005 I agree that the number are not accurate, but 20 tandems a weekend for a estimated 45 weekends is about right on average for the year. I did not intend on it being a operating budget for audit, just numbers to represent what could be made before you add in your operating costs. Take it for what it is, a number of slots a year, and a price to jump added up to see what it comes out to. Quote Share this post Link to post Share on other sites
dan_iv 0 #11 February 16, 2005 why not just ask your local DZ if then can provid you with last years numbers? I.E. totall # tandems last year, total # lift tickets, video, etc... then you will atleast have a "decent" set of data to play with, (assuming the DZO will give you that info in the first place).... Quote Share this post Link to post Share on other sites
tfelber 0 #12 February 16, 2005 A couple of things nobody seems to be accounting for are first, the costs and second, the customer base. A Tandem jump costs the DZ more. For $175 tandem you have two slots used and you must pay the TM and purchase tandem gear which is quite expensive and probably has a shorter life cycle. And tandems are attracted mostly through advertising; yellow pages, billboards, free jump tickets to fun jumpers, etc. Fun jumpers show up and pay for a ride. And as Tom mentioned, the tandem passenger will make one jump and probably not come back. But the number of people who do or would like to do a tandem is near infinite compared to the number of people who are fun jumpers at a particular DZ. So the original post while thought provoking is quite misleading. Quote Share this post Link to post Share on other sites
kelpdiver 2 #13 February 16, 2005 QuoteAnd as Tom mentioned, the tandem passenger will make one jump and probably not come back. But the number of people who do or would like to do a tandem is near infinite compared to the number of people who are fun jumpers at a particular DZ. I guess you could look at it from that perspective instead. Annually I think I've read that ~300,000 tandems are done and we have somewhere in the viscinity of 30,000 active jumpers. So we could simplify and say there are 10 one time tandems for every fun jumper. A bigger leap is believing this ratio is constant across the country. I'm gonna pull $40 out of thin air as a profit margin per tandem. With many DZ giving a lift ticket for a referral, might be higher. If true, then there is $400 in profit in tandems for every sport jumper. If they did 100 jumps at $2 profit per, you'd still need $200 more in revenue in food, drinks, packing services, whatever. From that angle, it would seem unlikely it's 50/50, and we're ignoring the students. We're also ignoring, of course, the tandem revenue generated by friends of the sport jumpers. I would venture that the most profitable mix is the right balance between the two. 80% of one or the other won't get it done. Quote Share this post Link to post Share on other sites
cvfd1399 0 #14 February 16, 2005 Everyone is looking too far into this. I intentionally left out all the operating costs b/c I cannot provide the numerous costs to show a end profit. Just look at the numbers with a open mind, and forget trying to make it even close to accurate. Quote Share this post Link to post Share on other sites
flypunk 0 #15 February 16, 2005 operating cost is a big part of it, no big dea lif you want to leave it out, but then you gotta even the balance out. the 20 that the funjumper pays X (plane fuel, insurance manifest, lease admin.) for operating cost and the rest is profit. The 175 that the tandem pays is X * 2 for operating cost (plane fuel, insurance manifest, lease admin.) $30 for the instructor $45 for gear (rig, helmet, goggles, jumpsuit etc) so your initial $175 is now $100 minus the operating cost of the fun jumper; lets call it $88 for argument sake. so now you can compare a $88 tandem vrs a $20 fun jumper and have them on the same scale (give or take a couple of bucks) ... Quote Share this post Link to post Share on other sites
MarkM 0 #16 February 16, 2005 I don't know the numbers, but I think there are more tandem factories that don't allow fun jumpers than there are fun dropzones that don't allow tandems. So odds are, tandems can bring in more money than fun jumpers. Quote Share this post Link to post Share on other sites
Reginald 0 #17 February 17, 2005 Okay guys, I’ll bite. First, revenue without costs is irrelevant. It’s not revenue or costs alone that is the point it is the interaction of the two. Revenue: Tandem $199 Video $80 Total Revenue $279 Costs: Tandem Slot $12 Instructor Slot $12 Instructor Pay $30 Video Slot $12 Video Pay $25 Gear Depreciation $5 ($5000 over 1,000 jumps) Gross Margin $188 Fun Jumper Revenue $20 Costs: Slot $12 Gross Margin $8 So it takes 23 fun jumps to equal 1 tandem. Okay, there are a lot of variables but you get the idea."We've been looking for the enemy for some time now. We've finally found him. We're surrounded. That simplifies things." CP Quote Share this post Link to post Share on other sites
firstime 0 #18 February 17, 2005 QuoteAlright, I'll buy your math, now think about mine. That tandem customer is going to make one jump in his lifetime at $175.00, but a fun jumper making 100 jumps each year at $20.00 each is worth $2,000.00 in jump revenue each year! If the profit on each aircraft slot is $2.00, the fun jumper will generate $200.00 in jump profit each year. The fun jumper will also be buying gear from the store, and food from the DZ restaurant. Plus he will be bringing a few friends along to make those $175.00 tandems. And, the fun jumper will be back next season, and the season after that. Who is the better customer? Good point Tom!! Quote Share this post Link to post Share on other sites
tombuch 0 #19 February 17, 2005 Quote So it takes 23 fun jumps to equal 1 tandem. Okay, there are a lot of variables but you get the idea. Or it takes a single fun jumper 23 jumps to equal the profit of one tandem.Tom Buchanan Instructor Emeritus Comm Pilot MSEL,G Author: JUMP! Skydiving Made Fun and Easy Quote Share this post Link to post Share on other sites
PhreeZone 20 #20 February 17, 2005 USPA A numbers are only up to about 47000, and thats since the 60's. D numbers have'nt even hit 30,000 yet. The 30,000 number thats tossed around is the number of USPA members that are current on their dues. Some of those are members that bought lifetime memberships in the 70's and have nothing to do with the sport anymore. Others are visitors that only buy the 45 day membership to come over and jump for a holiday. Realistically, I think the numbers of active jumpers in the US that make at least 50 jumps a year is less then 20,000. Tandem retention numbers are about 1 in 50 will make another jump and less then 1 in 100 will actually get their licence. I forget the numbers being tossed around but its like 1 in 500 tandems will get their D licence.Yesterday is history And tomorrow is a mystery Parachutemanuals.com Quote Share this post Link to post Share on other sites
Kris 0 #21 February 17, 2005 QuoteOkay guys, I’ll bite. First, revenue without costs is irrelevant. It’s not revenue or costs alone that is the point it is the interaction of the two. Revenue: Tandem $199 Video $80 Total Revenue $279 Costs: Tandem Slot $12 Instructor Slot $12 Instructor Pay $30 Video Slot $12 Video Pay $25 Gear Depreciation $5 ($5000 over 1,000 jumps) Gross Margin $188 Fun Jumper Revenue $20 Costs: Slot $12 Gross Margin $8 So it takes 23 fun jumps to equal 1 tandem. Okay, there are a lot of variables but you get the idea. You forgot the airplane payment, maintenance, repairs, and insurance.Sky, Muff Bro, Rodriguez Bro, and Bastion of Purity and Innocence!™ Quote Share this post Link to post Share on other sites
diablopilot 2 #22 February 17, 2005 QuoteRevenue: Tandem $199 Video $80 Total Revenue $279 Costs: Tandem Slot $12 Instructor Slot $12 Instructor Pay $30 Video Slot $12 Video Pay $25 Gear Depreciation $5 ($5000 over 1,000 jumps) Gross Margin $188 Utilities. Property taxes. Runway maintinence. Aircraft maintinence. Manifest staff. Editing equipment. Grounds upkeep. Garbage service. Pumping the septic system. Oh yeah. Advertising.---------------------------------------------- You're not as good as you think you are. Seriously. Quote Share this post Link to post Share on other sites
Levin 0 #23 February 17, 2005 Quote20 tandems a weekend Skydive Houston usually averages 20+ tandems a day. I've seen Skydive Spaceland do 40 - 60 tandems a day on several occasions. I've seen Skydive San Marcos and Skydive Chicago both do alot more than that in one day. edit: typo's Quote Share this post Link to post Share on other sites
Levin 0 #24 February 17, 2005 QuoteTandem Slot $12 Instructor Slot $12 i assume your figuring operating cost per slot. i think you should be figuring full cost per slot because if a tandem instructor/student isn't taking the slot then a fun jumper paying full price will. Quote Share this post Link to post Share on other sites
skydived19006 4 #25 February 17, 2005 QuoteAlright, I'll buy your math, now think about mine. That tandem customer is going to make one jump in his lifetime at $175.00, but a fun jumper making 100 jumps each year at $20.00 each is worth $2,000.00 in jump revenue each year! If the profit on each aircraft slot is $2.00, the fun jumper will generate $200.00 in jump profit each year. The fun jumper will also be buying gear from the store, and food from the DZ restaurant. Plus he will be bringing a few friends along to make those $175.00 tandems. And, the fun jumper will be back next season, and the season after that. Who is the better customer? I agree with what you’re saying to a point. I run a small Kansas DZ; we do between 200 and 300 tandems/FJC students a year. I have between 10 and 20 “regular” jumpers, and I would guess that less than 5 +/- of my regulars make 100+ jumps a year. The way I think about it is that the “regulars” allow me to break even +/-; the student traffic allows me to generate a profit. I for one would let someone else deal with running the business if I were making no profit. If I were running in the negative, I would be forced to sell out either to someone wanting to loose money in the skydiving business, or just dissolve the capital innovatory and the DZ would go away. A non skydiving friend of mine at a DZ party once asked me if the people there were my customers. I thought about it for just a bit, and told him that “these people are my friends, the students are my customers”. Obviously the upjumpers are customers, but they're friends first.Experience is what you get when you thought you were going to get something else. AC DZ Quote Share this post Link to post Share on other sites
