Tour Operations

Management

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)
Auxiliary services which are common that tour operator is providing includes
accommodation or facilities of lodging, facilities of transport and different other facilities.
Another benefit which is associated with these tour operator packages is saving of cost and
time. Now the clients are getting all the facilities at one place for to arrange their tours at the
locations which tour operators are offered.

TASK 1

1.1 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)
Trends which are currently and recently and developments within industry of travel and
tourism:
Adoption of E-commerce Technology:
Industry of tourism is being scattered at global level its business by e-commerce technology
adoption. By to use this technology, it has now to be easy for the clients for knowing about
the different package online, tickets booking or suitable package through portal which is
online 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.(Cooper et al, 2005)

Increase in spending habits

In our days people are being able of to earn income and to developing more spend habits.
This is leading to different opportunities emergence for being offered by sector of tourism for
attracting the clients.
Thomas Cook pulls 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)
Target consumers
Thomas Cook is focusing on the people segment which is particular that would be will to
avail their packages of tour. Not to adhere to the system which is traditional, now the
development of package is made by the targeting of clients. Highly income people and the
couple which are newly married are the key segments of tourists these days. The packages is
framed so as for satisfying the clients targeting along with the revenue maximization revenue.
Market research
To conduct research of market it helping to identify the clients expectations and needs and in
accord with extract of a tour packages to fulfil their need to the maximum. Research of
market is an element which is very importantly in to enhance the travel and tourism business.
Demographic pattern change
Change in the demographic patterns has offered various opportunities for tour and
travelling sector. The Thomas Cook packages are designed depending upon the demographic
conditions of the client. The consumers prefer to go on tour with their families and friends
and therefore the places are selected to arrange tour for them. (Johnson et al, 2008)

Offering Customized holiday packages

Thomas Cook is offering holiday packages which can be customized for the clients that the
availability of which the clients is selecting their tour package which they wants in accord to
the preference of budget and place.
Focus on customer satisfaction
Thomas Cook is focusing on satisfaction of clients by to meet their needs to a greatly extent
to keep in facilities offers terms and charged of price. The principal tour operators objectives
would being to offering good services for the clients so that they wants be will for coming
back for availing new offers in future as well. The satisfaction of clients is the need of the
time in such an environment of competition.
Role of government and other organization
Government is providing a support which is highly for sector of travel and tourism for
enhancing their organisation to result within the nation growth as a whole. Government of
UK as well is providing supports in easy VISA availability terms, to spend huge money in
tourist places development, relaxation in norms of taxation, etc. moreover the government
and different other companies are involving in several other activities for supporting the local
public from the area which is nerby for generating income means.

. 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.
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).
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.
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.

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
consumers needs and negotiations with required service providers (Porter, 2014). The
planning provides the basis for designing the tour package according the customers
expectation and fixation of price giving regard to companys 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:
Careful examination of the destination place:
In the present case, Greece has been selected educational tour package for the HND TTM
students to Europe 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.
Research:
Research activities involve the investigation into the various available facilities that can
be offered to the students 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.
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 students. Negotiating process would take around three to four months.

Tour 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 students. 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 operators 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.

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 Thomas Cook 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 Thomas Cook and Thomson 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 Thomas Cook and Thomson.
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
Thomas Cook 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 Thomas Cook 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.
Sale only contract:
In the present context, Tour operator Thomson 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 Thomson 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.

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. Thomas Cook 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 30 Pounds per person. The overall budget of
the total package would be 350 Pounds per person.

Sr. No Package Details

1. Charges for transportation via airplane

Sale Price/Person
130

Transportation Local
By Coach
By Taxi

35
35

2. Representative Visit

100

3. Booking for Hotel

20

4. Other charges for sightseeing and music

30

5. Total Cost

350

TASK 3
3.1 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:
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.
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.

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.
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.

3.2 Assess the suitability of alternatives to a traditional brochure for the following tour
operators

The present task would describe various alternatives to the traditional brochure in context
of Thomas Cook Cruises Summer 2015 and Air Tours Summer 2015 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 Thomson 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 Thomson 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
Thomson 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.

3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of tour operator.

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
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.

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 countrys 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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