Tour operator management

Tour operator management
June 26, 2015 Uncategorized
Table of Contents
Introduction. 2
Task-1 Understanding the tour
operator industry in travelling and tourism sector. 3
P1.1 Analyse the effect of current
and recent trends and developments on the tour operators industry 3
Task-2 Identifying the various
stages involved in creating holidays. 7
P 2.1 Assess the stages and
timescales involved developing holidays. 7
P 2.2 Evaluate the suitability of
different methods of contracting for different components of the holiday and
different types of tour operators. 8
P 2.3 Calculate the selling price of
a holiday from given information below. 9
Task-3 Review of brochures and
methods of distribution used for sale of holidays. 11
P3.1 Evaluate the planning decisions
taken for the design of a selected brochure. 11
P 3.2 Assess the suitability of
alternatives to a traditional brochure for the following tour operators of the
Thomas Cook Group: Air Tours Summer 2014, THOMAS Cook Cruises Summer 2014. 12
P3.3 Evaluate the suitability of
different methods of distribution used to sell a holiday for different types of
tour operator within the THOMAS COOK group. 13
Task-4 Understand strategic and
tactical decisions in operation tour operator’s business. 14
P 4.1 Evaluate the strategic
decisions made by different types of tour operator. 14
P 4.2 Compare the tactical decisions
that could be taken by a selected tour operator in different situation. 15
Conclusion. 17
References. 18
Introduction

The present paper is prepared with the objective of discussion about the
tour operators, their services to the general public leading to the growth of
tourism sector. Tour operator managers arranges for the tours for the
interested people by offering various other facilities along with the main
service. The consumers now do not need to go the doors of various service providers
for arrangement of their tours as a combination of various services are
provided by tour operators in different packages (Paulo, 2012). Common auxiliary services which tour operator provide
includes accommodation or lodging facilities, transportation facilities and
various other facilities. Another benefit associated with these packages of
tour operator is cost and time saving. Now the consumers get all the facilities
at one place for arranging their tours at the locations offered by tour
operators.
Tour operator managers play a key role in development of overall travel
and tourism industries worldwide. The present paper would discuss the four
objectives to gain more understanding about the tour operators’ management
which is stated below:
P1 Understanding the tour operators industry in travelling and tourism
sector
P2 Identify the various stages involved in creating holidays
P3 Review of brochures and methods of distribution used for sale of
holidays
P4 Understand strategic and tactical decisions in operation tour
operator’s business.
The above for objectives defines the area of analysis for understanding
the role of tour operators. Our learning objective would be bring into
knowledge the about the tourism industry, various stages faced by tour
operators for designing a complete tour package, fixation of price to be
charged from the consumer etc. Moreover, the selection of design and type of
the brochure used and the distribution method used by tour operators to
maximize their revenue shall also be discussed here. Further, the various
strategic and related tactical decisions to grow the business is also required
to be studied to gain a clear understanding of the operations of tour
operators.HND Assignment Help
Task-1 Understanding the tour operator industry
in travelling and tourism sector

P1.1 Analyse the effect of current and recent
trends and developments on the tour operators industry
Tourism industries have led to the growth of the nation and have become
one of the economic drivers for developed countries like UK. The standard
growth rate in tourism sector is around 4% which is quite better as compared to
growth rate in other sectors. According to World Trade organization, Tourism
industry has a major contribution in terms of growth for developing countries
as well as developed countries (Cooper et al, 2005). We would now discuss some
of the current and recent trends and developments in travel and tourism
industry:
o
Adoption
of E-commerce Technology:
Tourism industry has been scattered worldwide its business by adoption
of e commerce technology. By using this technology, it has now become easier
for the consumers to know about the various packages online, booking of the
tickets or suitable packages through online portal in a much lesser time. E commerce
has made possible the complete knowledge about the various available tour
packages through online medium to consumers located all over the world. A
sudden increase in the number of foreign and domestic tourists for visiting famous
places in UK has become possible only due to ecommerce technology adoption by
tourism sector.
o
Increase
in spending habits:
Now a day people have become capable of earning more income and have
developed more spending habits. This has led to emergence of various
opportunities to be offered by tourism sector to attract the consumers. The
operators pull the attention of the consumers towards utilization of their
vacation time in visiting different famous historical and beautiful places.
Apart from generating revenues for tour operator, local public is also
benefitted as they get more earnings if visitors come to the places nearby (Swarbrooke, 2009).
o
Target
consumers:
Tours operator focuses on the particular segment of people who would be
willing to avail their tour packages. Not adhering to the traditional system,
now the packages are developed by focusing on the target consumers. E.g. High
income people and the newly married couple are the key tourists segments these
days. The package is framed so as to satisfy the target consumers along with
the motive of revenue maximization.
o
Market
research:
Conducting market research helps in identifying the needs and
expectations of the consumers and accordingly extracting a tour packages
fulfilling their need to the maximum. Thus, market research is an important
element in enhancing the business of travel and tourism.
o
Demographic
pattern change:
Change in the demographic patterns has offered various opportunities for
tour and travelling sector. The tour packages are designed depending upon the
demographic conditions of the client (Johnson et
al, 2008). The consumers prefer to go on tour with their families and
friends and therefore the places are selected to arrange tour for them.
o
Offering
Customized holiday packages.
Tour operators now offer customized holiday packages to the consumers
which the availability of which the consumers selected their desired tour
package according to the budget and place preference.
o
Focus on
customer satisfaction:
The focus of tour operator is on consumer’s satisfaction by meeting
their needs to a great extent keeping in terms of facilities offers and price
charged. The main objective of the tour operators would be to offer good
services to the consumers so that they would be willing to come back to avail
new offers in future also. The consumer’s satisfaction is the need of the time
in such a competitive environment. Thus, designing of packages should be made
with utmost care so that it may result into growth of the industry.
o
Role of
government and other organization:
Governments provide high supports to travel and tourism sector to
enhance their business resulting into the growth of the nation as a whole. UK government
also provides supports in terms of easy availability of VISA, spending huge
money in development of tourist places, relaxation in taxation norms etc.
moreover the government and various other organizations involves in several
other activities to support the local public of the nearby area to generate
means of income.
o

Influences on health and social care organization 
Marketing:
Tourism marketing plays a vital role in enhancing the consumer awareness
about the travel and tourism industry. The consumers are now more knowledgeable
about the various services offered by different tour operators. Availability of
the online information about the destination places, tour packages, prices and
facilities has made it easier to consumer to choose their suitable tour package
(Kelsey, 2014).
o
Conservation
of Tourist places:
The aim of the travel and tour industry is not only profit generation but
to conserve the nature and the tourism destination. Government spends high
amount on the tourist places conservation to keep them clean and long lived.
Thus, conservation is also necessary to keep the places in good conditions so
as to attract large number of tourists.
o
Role in
economy:
Tourism industry has helped in providing means of earning to the local
people residing nearby destination places. Thus, apart from contributing to the
GDP of the country, various employment opportunities have also emerged leading
to economy growth and development.
In crux, after analysing the present situation of the tourism industry,
it be concluded that there are various opportunities for tour and travel
agencies to grow for the development of nation as a whole.
Task-2
Identifying the various stages involved in creating holidays

We shall develop an understanding of the stages involved in designing
the 10 days wedding tour package in Las Vegas and in VIA ALGARVIANA.
P
2.1 Assess the stages and timescales involved developing holidays.
For development of a good tour package, planning should be undertaken
keeping it focus on the target consumers. It is the most important part of the
overall travel and tour development business as it involves analysis of the place,
research activities, understanding consumer’s needs and negotiations with
required service providers (Porter, 2014).
The planning provides the basis for designing the tour package according the
customer’s expectation and fixation of price giving regard to company’s norms. It
would take around 1 year time to develop a package for the selected
destination. Some of the key activities of the planning are discussed below:
o
Careful
examination of the destination place:
In the present case, Las
Vegas has been selected as tourism destination which should be examined
in context of environment, cost factors, different sites, nearby famous areas and
restaurants etc. All these factors should be pre checked and shall take near
about three months’ time to complete this step.
o
Research:
Research activities involve the investigation into the various available
facilities that can be offered to the consumers in the selected destination. Whether
these activities can be performed at the pre-selected destination place can be
ascertained by researching of the concerned area. Thus, the research activity
should forms part of planning activity and can take around 2 months’ time.
o
Negotiation:
Negotiation with the various service providers should be done so as to
provide transportation facility, accommodation or lodging facility, food and other
facilities required by tourist. Negotiating process would take around three to
four months.
o
Tour

Theories and concept of human development and behavior

Applying promotional techniques
development:
Finally, the development of tour is undertaken by fixing the service
provider, designing the tour including various facilities to be offered and
communicating the benefits of package to the tourists. Promotional activities
are done by offering the complete tor package on the online portals, huge
banners, pamphlet and advertisements.
Financial
evaluation and pricing
In order to evaluate the
tours from financial aspects it is important that currency prices and overall
costing need to be checked before the tour so that pricing is set in accordance
with the profitability estimates. There can be two type of pricing i.e. cost
oriented tour pricing and market oriented tour pricing.
Administrative
staff
Due to involvement of
seasonality there is requirement for the human resource at particular instant
of time in right numbers. For managing staff required recruitment and selection
process need to be managed so that there is no excess and shortfall for the
staff
Marketing
tour package
Marketing of the tour is
done through online as well as offline methods so that more and more number of
customers is aware of the different aspects of the tour package. Depending upon
the target segment marketing would be done through particular advertisement
media.
Tour
operator’s brochure
Brochures are considered
as the major marketing tool for the tour and brochure developed should contain
complete information on the name of company, destination covered and site
visited etc.
Post tour
management
Post tour it is important
that customer survey should be carried out as this would help in order to know
the customer satisfaction index through the overall experience created from the
tour services.
P 2.2 Evaluate the suitability of different
methods of contracting for different components of the holiday and different
types of tour operators.
There are mainly two methods adopted by tour operators for tour design
packages which are Fixed Contract method and Sale only contract method. Here,
in the present task we shall take examples of two different Tour operators –Airtour
and Flightcentre who shall be compared in terms of various services provided.
The prescribed two methods of the contracting are discussed here under in
regard to Tour operator Airtour and Flightcentre.
o
Fixed Contract:
In the Fixed contract, the service providers charges for the volume
based capacity so as to maximize their revenue by covering up the off season sale
shortage. Thus, the tour operator books the total capacity regardless of what
would be actually consumed. Tour operator Airtour has entered into a fixed
contract of summer tour package containing a constant risk of un-utilized
capacity because the operator has to pay the full amount as per the contract.
High discounts are offered in these types of contracts as the volume of the
people availing the tour packages seems high. Tour operator Airtour has
selected its tour package based on this contract as it presumes that large
number of people will come to get the benefit of discounted tour package.
o
Sale only contract:
In the present context, Tour operator Flightcentre has selected sale
only contract to design its tour package. These types of contract are made in
lean season and have comparatively high cost. These contracts are made keeping
in view the needs of the target potential consumers. Tour operator Flightcentre
will have to pay only for the capacity utilized by its client. There is nothing
to concern about the un-utilized capacity. These contracts give special
attention to the prospective consumers and indulge various facilities with high
costs (Holloway, 2012). The risk factor
associated with these contracts is risk of weak response for a particular tour
package designed for a particular segment.
After discussing the two contracts above, it can be said that both the
contracts have their own merits and demerits. While the Fixed contract offers
high discounts, pre decided profits, advance booking of the facilities etc. On
the other hand Sale only contracts reduce wastage of funds by non-payment of
un-utilized capacity and focused on target consumers.
P

Marketing essentials

Understanding specific need in health and social care
2.3 Calculate the selling price of a holiday from given information below.
In the present case, a seven day holiday package to Greece is developed
by booking air tickets for around 180 tourists. Our agent is assigned with the
responsibility for arrangement of accommodation in Avra Beach resort in 3 Star
hotel. This hotel is booked on a fixed price contract of 30 Pounds as twin
sharing basis. Booking of 80 passengers is made with Thomas Cook airlines on
fixed contract basis (Thomas cook, 2010). All
the payment has been made in advance regardless of the actual capacity
utilized. Total air transportation charged agreed are 130 pound per person.
Moreover, local conveyance charges are 10, 35 and 100 for transportation via
coach, taxi or representative visit respectively. Other charges for
entertainment facilities are separately charged at 40 Pounds per person. The overall budget of the total package would
be 335 Pounds per person and 535 Pounds per couple as the case may be.
Table 1: Showing the total cost involved in package of
Greece.
Sr. No.
Package Details
Sale Price/ person
Sale Price/Couple
1
Charges for transportation via airplane
£130
£240
2
Transportation Local
By Coach
By Taxi
Representative visit
£10
£35
£100
£20
£55
£100
3
Booking for Hotel
£20
£30
4
Other charges for sightseeing and music
£40
£80
Total Cost
£ 335
£ 535
As shown in table above that price for the transportation, hotel and
other purposes have been shown for the individual and couple as well. Prices
for couple are higher as compared to the double of individual amount.
Task-3 Review of brochures and methods of
distribution used for sale of holidays

P3.1 Evaluate the planning decisions taken for
the design of a selected brochure.
Travel and tourism industry uses brochure as a medium of providing
information about the tour package and communicated the key information to the
clients. In the present context, we shall study the planning phase relating the
designing and implementation of the brochure of Thomas Cook. Distribution of
brochure is made with the objective of imparting information about the
available tour packages to the maximum people in a much lower cost. For
designing a suitable brochure that complies with the requirement, it is
important to develop planning, organizing and implementation activities with
utmost care. Some of the important planning decisions relating to present brochure
design process are discussed here under:
o
Identifying
issues affecting planning decisions:
Some of the key issues need to be identified before development of a
suitable brochure. These issues involves target segments, format, objective of
the information conveyed, , time limit available to generate the brochure etc.
all these factors affects the decisions regarding brochure designing in tour
and travel agencies.
o
Format of
the Brochure:
Format of the brochure should be developed keeping in mind target
consumer segment of the organization and information which need to be shared
with the consumers. A brochure should contain the information such as name of
tour company, duration of tour, description of destination, service of the
ground operators, transportation mode, price, extra charge clearly indicated,
full booking conditions and any health hazard related issues etc.
o
Budget
consideration and Target Market:
The target market should be selected and in the present context of
Thomas Cook, the target market would include niche segments. Budget also plays
a key role which defines the spending habits of the target consumers.
o
Time limit
and stages:
The designing of the brochure must have been completed in the prescribed
time frame. Entire planning, organizing
and implementation stages should get accomplished within the allocated time
limit for each stage.
P 3.2 Assess the suitability of alternatives to
a traditional brochure for the following tour operators of the Thomas Cook
Group: Air Tours Summer 2014, THOMAS Cook Cruises Summer 2014
The present task would describe various alternatives to the traditional
brochure in context of Thomas Cook Cruises Summer 2014 and Air Tours Summer
2014 to attract the large number of consumers worldwide. Development in
technology has made it necessary to evolve new alternatives to the traditional
system of brochures. The system of e-brochure has made the communication easier
and faster to consumers located worldwide. By designing an attractive brochure,
consumers would be more desirable to know about the offerings of the tour
operators. Newly found alternatives to the traditional system would result in
attracting more customers and greater revenues (Streeter,
2012).
Designing through online method would help to generate more attractive
brochure that can reach to large number of people by adopting various
promotional activities. For the present case of Air Tours and Thomas Cook,
e-brochure should be used to cover large network with lower cost. E- Brochure
comes in lower cost and faster access as compared to traditional physical
brochure system. Moreover, visual medium offers more clarity and eye catching
feature as the message conveyed through images has high impact and clear
understanding. Thus, visual medium can be adopted by Air Tours and Thomas to
design their brochure.
The visual brochure conveys clearer message by depicting the images of
the concerned destination place. Moreover, key features of the proposed destination
places are also highlighted related to those pictures. Further, visual
brochures can also be easily promoted through online social media sites like Facebook,
Google+ etc. Apart from this, video brochures can also be integrated with internet
marketing tools for their promotion. Video brochure includes sound as well as
beautiful pictures of the concerned destination and features associated with it
(Sachdev, 2013). These types of brochures
can be easily uploaded on You Tube and involves much lower costs with fastest
promotion worldwide. Considering the various aspect, it is suggested that Air
Tours and Thomas Cook should use a combination of all the aforesaid brochures. An
integrated brochure should be developed which includes the benefits of video brochure,
visual brochure and e-brochure. All these types of brochures should be
efficiently linked with each other so that the final brochure developed to be
offered to the consumers should be widely approachable and attractive.
P3.3 Evaluate the suitability of different
methods of distribution used to sell a holiday for different types of tour
operator within the THOMAS COOK group.
There are several methods available with the Thomas Cook Group for
selling of holiday packages. These methods include direct sale, online trading,
telephonic sales, promotion and sales through call centres etc. Direct sale of
holiday packages involves sales through online media direct to the consumers.
This method of distribution can be used by Thomas Cook group as it will result
into targeting high number of consumers in a much low cost. All the information
about the proposed destination place is provided through online media along
with the selected brochure. Consumers are more informed about the various tour
packages offer by different tour operators. Moreover, email marketing tools can
be used for the distribution of holiday packages. Through e mail, complete
information is send to the target consumer segment about the available tour
package. Sometimes, external agencies are hired for promotional activities to
enhance the sale of tour packages. By opening a call centres, the sales
executives of the organization conveys the information and tries to convince
the consumers through telephonic call to avail the benefits of tour package (Levy, 2010). Thus, considering the various
benefits associated with each type of distribution method, Thomas Cook can
adopt a combination of these methods. It can make use of direct method or
distribution through online media to reach the target consumer to sell the
available tour packages.
Task-4 Understand strategic and tactical
decisions in operation tour operator’s business.

P
4.1 Evaluate the strategic decisions made by different types of tour operator.
There are numerous strategic decisions which are made by tour operators
in their business. All these strategic decisions are taken in day to day
running of the business and involves decision regarding designing and
developing a brochure, fixation of the price of the offered tour package,
selection of the distribution method, identifying the particular consumers
segment (William, 2010). Strategic decisions
are of high importance are taken with due diligence by the organization. The
travel and tour business involves high level of flexibility in some elements so
as to run its business smoothly and hence, the constant decision making in
required to be undertaken at each and every step for a profitable business
emergence. Some of the key strategic decisions relating to travel and tour
operating business are discussed below:
·
Segmenting,
targeting and positioning:
Target consumers are identified by tour operators so that tour package
developed keeping in view the demand of the positioned customers. The decision
is made after analysis the present situation in terms of competitive
environments and the services which can be offered to the target consumers so
as to meet their expectation in the pre-defined budget. It is one of the key decisions
taken by tour operators which form a base of all other important decisions
relating to running of the business.
·
Discount
pricing strategy:
Discount Pricing strategies are made to seek the high number of consumers
to avail the tour package. Calculation of discount amount with fixation of
price of a particular tour package is an important decision which is generally
associated with fixed price contract. High discounts are offered to the consumers
in terms of various seasonal packages. An attractive pricing strategy is
developed keeping in view the earning capacity and spending habits of the
target consumers.
·
Seasonal
Aspects:
Seasonal aspects are considered before development of any tour package.
In travel and tour business, off season and peak season affects the demand of
the tour packages. In peak seasons, high discounts are offered to the consumers
by arranging tour in desired destination place. Thus, seasons affects the
overall revenue generation for the business. Pricing structure and selection of
the destination place are the key decisions which are affected by seasonal change.

·
Competitive
pricing strategy:
Competitive pricing strategy decisions include the analysis of the
prices charged by the competitors for the same trip and fixing the price of our
tour package so as to attract more consumers to buy their holiday package. This
decision creates customer loyalty even in a highly competitive market (Syratt, 2013). After understanding the present
situation, proper decisions needs to be taken to face the challenges of the
competitive environment.
·
Promotional
strategies:
Promotional activities would include deciding about the method to be
used for promoting the business by using the various tools within the
prescribed budget. Overall profitability of the business depends on this
decision as the promotional techniques used by the different tour operators
forms basis of high generation of income. By selecting a suitable integrated
promotional strategy, the consumers are made aware of the available tour
packages.
P 4.2 Compare the tactical decisions that could
be taken by a selected tour operator in different situation.
Various tactical decisions are made in day to day running of the
business. These decisions would include negotiating with the service providers,
arrangement of the accommodation, food and other facilities, tie up with the
stakeholders foe becoming parts overall value chain. First of all, the list of
service providers are prepares from who the proposed services are to be
availed. There are various service providers for each activity such as
transportation, accommodation, food and other related activities. Thereafter,
the proposals are designed and send to these service providers for inviting
quotations. Most suitable and effective quotation is selected out of the all
the available quotations depending upon the pre-defined budget. The selection
of the quotation is done with the objective of cost minimization and good
services to the customers. In the present context example of Explore (UK) and
Regal dive can be taken which are the two major scuba diving holiday tour package
companies involved in development of holidays. There is price war between the
two tour operators due to which prices are slashed.
Personal meeting would be done if possible with the service provider
selected on the basis of suitability of the price, quality of the services and
facilities offered to the positioned customers. The complete process requires
tactical decision making such as pricing strategy, discussion with service
providers and negotiating the price. Assessment of the consumer experience is
another tactical decision making process (Cooper et
al, 2005). The experience of the consumers is analysed and efforts are
made to solve the problem which might have faced by the consumers. Only by
solving the previous problems by performing corrective actions, the consumer
will come back again to avail another tour package offered by the organization.
Conclusion

The present paper has discussed various aspects of business of travel
and tour agencies. This sector contributes a major part in the country’s GDP
and hence government also supports Tour and Travel industry. In the first task,
we have gain an understanding of the present situation of tour and travel
agency. Further, in the second task, the tour packages are developed
considering the needs of the target consumer segment. Moreover, various pricing
strategies are framed to attract a large number of the consumers. In the third
task, we have discussed the designing and development of the brochures. And at last,
Fourth task has thrown light on various strategic and tactical decisions in day
to day operations of the tour and travel agencies’ business.
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