Last class, we looked at three companies: Sightline Tours, Big Bus, and Grey Line and tried to recognize the most profitable one. The winner? Big Bus. Though its tour bus is a school bus, and not a leather seated coach charter bus, the company has less to maintain, and less expenses to pay. Yet, we often overlook these “small” companies, and selling them short because of their appearance compared to the big dogs, but what we forget is to “never judge a book by its cover”.

I have a few friends going down to Vegas for the weekend, and I thought about the 3 or 4 star hotels and the profits they make compared to the 5 starred Bellagio and Wynn. Now don’t get me wrong, I’m sure the two make lots of money from the higher room prices and high class facilities, but think of all the extra costs they face. Not only do they have to purchase the flat screen TVs, but the cost of maintaining all of them? Having to maintain a 5 star hotel is definitely harder, and much more costly to do, than a 3 star; and that’s how the 3 stars pull in more profits.

But then again, most of the 3 stars are owned by the bigger hotels … so maybe that’s the bigger picture.