Travel Agency and Tour Operations Business

Airline,
Travel Agency and
Tour Operations

Table of Contents
INTRODUCTION...........................................................................................................................1
1 Different factors which influences passenger travel decision..................................................1
2. Porter Generic Strategy and suggestions about most suitable strategy...................................2
3. Investigation the tour operations industry within travel and tourism sector...........................4
4 . a )Retail travel environment and role of travel agent ............................................................6
4. b) Different types of travel agency and relationships that exist within travel agency............7
Product and services provided....................................................................................................7
The relationship that exist within travel agency.........................................................................8
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

INTRODUCTION
Travel and tourism refers a sector that provides different types of products and services to
its customers. The main aim of such sector is to give better quality of services and influence
more people for the purpose of making profits. Organization mainly focuses on different types of
services by using new technology that increases number of customers (Camilleri, 2018). To
understand the concept of travel and tour operation is Aer Lingus has been selected that is
Airline industry provides travelling services to its customers. This is second largest airline
industry founded by the Irish government. Such organization privatised between 2006 and 2015
and now it become wholly owned subsidiary of International Airlines group. Report discusses
about different topics such as factors which influences passenger travel decision, porter generic
strategy, complete travel experience that is developed by tour operators, retail travel environment
and the role of travel agent.
1 Different factors which influences passenger travel decision
Travel agency means an organization that offers travelling services to different people
and increase profitability. The main purpose of such industry is to influence more people and
increase the productivity after providing attractive services. Aer Lingus is a largest airline
industry that operates its business at Belfast city Airport, Cork Airport (ORK), Shannon Airport
(SNN) as well as hub at Dublin Airport. Aer Lingus flies more than 80 destinations across
Europe, Turkey, Morocco and United States (Robinson and et.al., 2016). There are different
types of factors which influences traveller's decision that are as discussed:
Convenience: This refers convenient procedure, product and services are intended to
increase accessibility in travel and tourism sector that influences passengers. In Aer Lingus,
manager focuses on such factors and make plans to provide easy convenience to its customers
and increase profitability. In today's time, people wants easy convenience that can make easy and
good their travelling journey. It influences passenger's decision for selecting best travel agency
and maintain the people for long term. The transport operator of Aer Lingus can use this factor
for attracting future passenger by providing easy and affordable convenience facility
(Papatheodorou, 2016).
Prior experience: This mean experience that helps to make right decision for choosing
best options. It is important for organization to give best products and services that can attracts
1

customer more for availing again that services. In Aer Lingus, managers tries to give good
experience to its customer for retaining them and providing again travelling services. If
organization provides good services then passenger make decision to get again services from that
one company which they purchased first. Therefore, this is influencing factor that influences
passenger's decision and retain them for long period. The tour operator of Aer Lingus can attracts
future passenger by giving good services to customer and solving their problems.
Price: Price is the main factor which influences all people and their decision regarding
purchasing products and services. If organization offers different types of products and services
at reasonable prices then it can attracts more people that increases profitability and productivity.
In Aer Lingus, manager or tour operator decide the prices of tour packages and offers reasonable
and affordable tour packages in order to influences decisions of more passengers. In Aer Lingus,
tour operator can attracts future passenger by setting the affordable prices of tour services
(Medlik, 2016).
Purpose of trip: This is another influencing factor which influences passenger's
decisions and helps to choose best options. People defines their purpose why they wants trip such
as to spent holidays, festival and other events. In Aer Lingus, manager offers variety of packages
and tour services to its customer for the purpose of increasing customer and make their trip
affordable and reasonable.
Appeal: This is an urgent and serious request which is created by people or legal
authority to change the law and pass new legislations. This is an influencing factor that
influences passenger's decision in order to provide good services after appealing to the legal
authority. Tour operator authority can request for formal change and implementing decisions. In
Aer Lingus, the tour operator can appeal from manager of such organization to for changing laws
according to passengers as they wants. It influences passenger's decision and make new laws for
the benefits of customers (Papatheodorou, 2016).
2. Porter Generic Strategy and suggestions about most suitable strategy
Porter generic strategy is given by porter that is adopted by all organization in order to
gain competitive advantages. It is related with scope of business whether broad and narrow and
maintain productivity. Organization uses different strategy under porter generic strategy which as
as discussed:
2

Cost leadership: It is used in large scale business by offering standard products at
minimum cost that influences customers. This strategy is related with cost of products and
services that attracts people in order to purchase goods and services. Aer Lingus can use this
strategy by providing air line or travelling services at low cost than competitors that can
influence customers in order to obtain more profits. It may be helpful for organization to increase
more profits by attracting more people.
Differentiation leadership: This strategy is also used in large scale of business where
number of customer are more and suppliers are also in great number. This create high
competition situation among firms. An organization take to develop a different products and
services than other industry that influences customers and increase profitability. Aer Lingus is
large size of company that can use such strategy by introducing new products and services which
is distinct from other company. In that case, it can maximize production and also can gain
competitive advantages by delivering optimum services.
Cost focus: This strategy is used in small sector in order to gain competitive advantages.
By adopting this strategy focuses on low cost and best value of products and services. This
strategy is adopted by serving the needs of niche market segment and at the lowest possible
prices. If Aer Lingus uses this strategy then it has to provides travelling packages and services at
small area and lowest prices that can attracts customers and increase sale of business industry.
By focusing on product attributes, Aer Lingus can revise brand strategies and bring changes in
product packaging, designing to give satisfaction to customers and maximize value for money in
small market segment (Bandara and Silva, 2016).
Differentiation focus: This strategy is used by organization in small market segment by
bringing new and differentiate products and services which attracts customers. This may be main
issue for organization that customers really have different needs and wants and how they can be
satisfied in order to increase sale. It can be used by Aer Lingus in niche market for the purpose of
introducing differentiate products and services that can influence customers and helps to increase
number of customers as they wants.
Aer Lingus is adopting cost leadership strategy that attracts high number of customers by
providing travelling services at lowest cost than competitors and maintain the productivity within
organization. Its competitor like Ryanair and Easy jet are also using porter strategy that create
3

high competition. Aer Lingus is getting competitive advantages by offering products and
services at lowest cost than competitors.
Suitability: This is suitability strategy for Aer Lingus such as it reduce the additional
cost to suppliers that save its profit margin. It promote and publicity its products that create
brand image. Moreover, It satisfy consumer demand by giving Air Bridge services.
Benefits: It helps low cost operators in Aer Lingus that help to generate higher profit
margin. By adopting cost leadership strategy chosen company can increase market share and also
be sustain in competitive environment (Tkachenko and Kovalska, 2017).
Potential challenges: While adopting this strategy it can face many challenges such as
competition of other organization that can provide travelling services low cost than Aer Lingus,
new products that can attracts more people, working environment and market segment. For
gaining competitive advantages Aer Lingus should set prices of products and services on given
time and need to implement that can attracts more people.
Therefore, Aer Lingus adopting Cost leadership strategy that helps to get competitive
advantages in larger market.
3. Investigation the tour operations industry within travel and tourism sector
I) Tour operators: A person who operate tours and attracts passengers for availing next
time service is consider tour operator. It has high knowledge and experience to influence people
and run operations effectively. There are different types of tour operator that are defined as:
 Outbound operator: This means travel agents or operators who sells the services
for outbound travel, they create packages for traveller from one country to travel
to visit another country. In Aer Lingus, out bound operator provide such services
to visit or travelling from one country to another country of their choice.
 Inbound operator: This means a person who operate tours and arranges services
like transport, hotels, food facility etc. in the same city and on the basis of
customer's destination. In Aer Lingus, inbound operator can provide such services
by selecting designation (Yeh, Ku and Ho, 2016).
 Domestic operator: This means a person in organization who provides travel
packages for domestic places in their country. In Aer Lingus, Domestic operator
make plans to provide travel packages in domestic country.
4

 Specialist operator: This type of tour operator is more flexible for customers and
also create interest of them for the purpose of introducing tour packages. In Aer
Lingus, specialist operator provide services like cycling holiday, trekking etc.
 Mass market operator: This means tour operator who puts together packages
with combination of accommodation such as transport, destination, food etc. that
attracts passengers. Tour operator of Aer Lingus attracts customers by putting
together tour packages and increasing services.
ii) Industry structure: This refers designing and atmosphere of organization which mostly
affects people and emphasis to avail services from such industry. The description of
industry structure is defined below:
 Structure of business: A business structure refers category of organization which is
legally recognised in given jurisdiction and maintain profits. The business structure of
Aer Lingus is wider as focus on Cork Airport and Shannon Airport. It provides its
services in 93 destinations and attracts more passenger by providing attractive services
(Horner and Swarbrooke, 2016).
 Major operators: A person who uses their intelligence, skills and charm to manipulate
people is consider major operator. In Aer Lingus, manager are consider major operator
who create attractive packages and give offer to customers for the purpose of availing
travelling services.
 Independent operators: This means people or group of people works under contracts for
service and does not employ any workers consider independent operator (Yin and Poon,
2016).
 Market share, product and services: Market share is the percentage of a market
accounted by an organization that helps to create image of that company. Aer Lingus is
achieving return on invested capital of 26.8% and getting operating margin of 15.1% both
are measures highest in the group. The products and services of Aer Lingus are travelling
services for all class of people, combination of packages, hotel service, transport service,
new products, food facility etc.
iii) Relevant legislations and role of trade bodies: There are different types of legislations
which are follows by Aer Lingus:
5

 EU package travel directive: This law protect European travellers right at the time of
booking packages holidays. It applies on both European tour operators and foreign parties
selling travels products directly to European travellers. Aer Lingus follows such
legislations in order to provide travelling services to European and foreign parties.
 ABTA: It refers Association of British Travel Agents that was developed by government
for giving guidance on issues from sustainability to health and safety, scheme of financial
protection and providing safety travelling services. The manager of Aer Lingus focus on
such legislation and provide guidance on health and safety issues, financial protection
and fair deal with customers.
 FTO: It refers Federation of Tour Operators that ensure continued long term success of
leisure travel industry by influencing government and opinions of tour authority. Aer
Lingus provides financial protection, safe and sustainable holidays that affects people and
increase productivity (Holden, 2016).
 AITO: This means Travel Association that represent unique and specialist travel
company that provide an unrivalled range of holidays to every corner of world. Aer
Lingus can use such law to provide unrivalled holidays that offered by members.
4 . a )Retail travel environment and role of travel agent
Retail travel environment: This means a travel agency is a private retailer and public
services that provides travel and tourism related services to the public based on suppliers like as
activities, airlines, cruise line, hotels, railway, travel insurance and package tours. Aer Lingus
can perform such services publicly and privately. It also gives more services and good
environment to customers such as cruise line, airline, railway, travel insurance and reasonable
tour packages (Muturi, Ho and et. al., 2015).
The roles of travel agent are defined as:
Make plans: Travel agent make plans for booking holiday and what products and
services can be provide to customers. It introduce from new services which helps to attracts more
people. Such as travel agent of Aer Lingus make planning for its customers and provide them
attractive services.
Choose and arrange holidays: The travel agent of Aer Lingus arranges holiday to visit
good places and also arranges facilities for its customers.
6

Set the budget and implement: In Aer Lingus, travel agent set budgets and works accordingly
that helps to make profits and increase productivity by overcoming extra costs.
Focus on customer demand destination: Travel agent play an important role of
analysing customer's demand. In Aer Lingus, travel agent prefer customer's demand as they
wants which destination and provide travelling services accordingly.
Advice and opinions: Another role is plays by travel agent that is advice and opinions
that influences interested person and make decision quickly in order to increase productivity and
profitability. It also make feel good to customers by giving advise and opinions. They advise and
opinions to people on where to go and local tourist attractions, events and customs (Williams,
2017).
4. b) Different types of travel agency and relationships that exist within travel agency
There are different type of travel agency which are defined as:
Retail travel agency: This means retail agency sells tourists products directly to the
public on behalf of products suppliers for the purpose of getting returns. In this agency some
packages are sold on the basis of commission and mark up price (Types of Travel agency, 2019).
Whole travel agency: This means when company package tours which are marketed to
the customers tourists through network of retail agency and sell directly to clients. A wholesale
travel agency purchases tourists products in bulk and design tour packages (Stuart, Howell and
Wilson, 2016).
Aer Lingus is consider as Whole travel agency that provides travelling services in bulk to
its customers and maintain the productivity within organization.
Product and services provided
This means an organization provides different types of products and services for the
purpose of attracting customers and making profits. The main purpose is to increase productivity
as well as profitability of company by giving good products and services. Such as Aer Lingus
provides various products and services as it operates holiday tour, couple tour, family tour,
special event tour in products. It gives attractive services like best hotel, food facility according
to customers, transportation services from which transport they want to go, travelling packages at
affordable prices etc. that influences customers. Aer Lingus's manager can make planning to
increase their products and services by running their business (Whyte and Lohmann, 2016).
7

The relationship that exist within travel agency
The travel agency that is made up with relationship between variety of suppliers,
destination marketing products. Tourism products, travel agent and tour operators who
understand where passenger want to visit and give them satisfactions in order to meet with goals
and objectives.
There should be relations among travel agency that helps to influence people and
maintain the productivity and profitability. The relations which exist as:
Vertical Integrations: This means relationship among employees in unequal status in
which superior level communicates in a straight line. It does not maintain relations among other
department (Tsai, 2017).
Horizontal Integrations: This is a process of an organization that increases production
of good s and services at the same part of supply chain. Aer Lingus can maintain horizontal
integrations among employees in which they listens problems and provide solutions.
Aer Lingus is focusing Horizontal integrations that helps to share problems and provide
solutions of such problems. In this integration tour operator make plans and provides attractive
services for the purpose of influencing customers (Wu, 2016).
CONCLUSION
From the report it can be concluded that organizations provides travel and tourism
services to its customers in order to gain competitive advantages by providing attractive services.
Porter generic strategy are used by companies according to their size that helps to gain
competitive advantages. Different types of tour operators operate tours and maintain the
productivity of organization. Travel agent plays different role within organization such as
preparing plans, setting budget, focus on customer destination, advice and opinions etc.
8

REFERENCE
Books and Journal
Camilleri, M. A., 2018. Travel marketing, tourism economics and the airline product. An
introduction to theory and practice. Springer.
Robinson, P., and et.al., 2016. Operations management in the travel industry. Cabi.
Papatheodorou, A., 2016. Airlines and tourism: interrelations and trends. In Air Transport in the
21st Century (pp. 247-260). Routledge.
Medlik, S. ed., 2016. Managing tourism. Elsevier.
Papatheodorou, A., 2016. The impact of civil aviation regimes on leisure travel. In Aviation and
Tourism (pp. 79-88). Routledge.
Bandara, R. I. and Silva, D. A. C., 2016. E-tourism and roles of travel agencies: a case study of
promoting Japanese inbound tourism in Sri Lanka.
Tkachenko, T. and Kovalska, L., 2017. E-tourism, as display of dominant criterion of modern
tourism-operating: relevant provisions, tools, use. Часопис соціально-економічної
географії. 23(2). pp.19-22.
Yeh, C. C., Ku, E. C. and Ho, C. H., 2016. Collaborating pivotal suppliers: Complementarities,
flexibility, and standard communication between airline companies and travel
agencies. Journal of Air Transport Management. 55. pp.92-101.
Horner, S. and Swarbrooke, J., 2016. Consumer behaviour in tourism. Routledge.
Holden, A., 2016. Environment and tourism. Routledge.
Yin, C. Y. and Poon, P., 2016. The impact of other group members on tourists’ travel
experiences: A study of domestic package tours in China. International Journal of
Contemporary Hospitality Management. 28(3). pp.640-658.
Muturi, D., Ho, S., Douglas, A. and et. Al., 2015. Travel agencies’ perception of ISO 9001
certification. The TQM Journal.
Williams, G., 2017. Airline competition: deregulation's mixed legacy. Taylor & Francis.
Stuart, J., Howell, K. and Wilson, R., 2016. Application of multi-agent coordination methods to
the design of space debris mitigation tours. Advances in Space Research. 57(8).
pp.1680-1697.
Whyte, R. and Lohmann, G., 2016. Airline business models. Air Transport Management: An
International Perspective; Budd, L., Ison, S., Eds, pp.107-121.
Tsai, Y. H., 2017. Travel agency managers' perceptions of tourism industry employability.
Journal of hospitality, leisure, sport & tourism education. 20. pp.122-133.
Wu, C. L., 2016. Airline operations and delay management: insights from airline economics,
networks and strategic schedule planning. Routledge.
Online
Types of Travel agency. 2019. [Online]. Available thorugh:
<https://tourismnotes.com/travel-agency/>