Travel Itinerary Cost Calculation

The assignment presents a detailed cost breakdown for a pre-planned travel itinerary that includes flights, accommodation, and sightseeing tours in Tokyo, Hong Kong, and Bangkok. It outlines the costs for each destination, followed by calculations for markup and agent's commission to determine the final selling price.

Tour Operations
Tour Operations Management
Joel Mambou Page1

Contents
Introduction:................................................................................................3
i) Identify three trends which will be important to your company when it
has to make decisions about producing and selling its own package
holidays....................................................................................................3
i) Assess the stages that would be involved in developing that type of
package and also estimate the timescales involved so that your
company will know when they can implement their new initiative..........7
ii) Evaluation of different method of contracting for individual
components of the package holiday........................................................8
iii)Calculate, as the final stage of your research, the selling price of a
package....................................................................................................9
holiday using the attached itinerary & rates............................................9
a) Evaluate the planning decisions that must be made for the design of
a Tour Brochure for your company’s new package holidays..................11
b) Assess of the Suitability of traditional brochure in comparison to E-
Brochure.................................................................................................12
B) Tactical decisions taken by my chosen mayor tour operator which is
Thomas Cook..........................................................................................17

Tour Operations
Introduction:
This report gives a detail introduction about tour operator, types of tour
operator and role of tour operator in tour industry. This report also
provides a research based analysis of trends and development of tour
industry and how tour operator plans different holiday packages and offer
them to their customers. This report will also help in understanding the
strategic and tactical decision making of tour operators. Cosmos travel
agency a leading travel agency in United Kingdom, company is also taking
sales agency for major airlines and tour operators. As a newly appointed
marketing manager in I have to make a research on recent trends in
tourism industry and on the basis of analysis of the research a business
plan will be prepare to present to the board of director of the company so
that company will decide and consider holiday packages to selling
package holidays as an agent for major tour operators.
Task 1
i) Identify three trends which will be important to your company when it has to
make decisions about producing and selling its own package holidays.
Tour and travel industry is the main contributor in United Kingdom
economy. There is tough competition available in the tour industry. To
take the competitive advantage over rival’s company have to make new
plans and strategies. Plans and strategies are based on research and
analysis of recent trends and development in tourism industry. Presently
UK’s tourism is booming because large number of domestic and
international tourists is attracted towards London.
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(Source:
http://0.s3.envato.com/files/90720290/preview/01_intro.__large_preview.p
ng)
Three major recent trends in this industry include:
 Wide product range
 All-inclusive
 Mass Marketing
The organisation functioning in travel and tourism sector have to consider
following three trends while making appropriate decisions:
 Digital advertising
 Niche marketing
 Crowd sourcing
ii) Analyse the effects of these trends and developments on the
tour operations industry in general.
Tourism industry is playing a significant role in the United Kingdom
economy. On the basis of recent trends there is huge potential for future
growth in the market. According to the analysis made of recent trends and
development in tourism industry it is found that London becomes a most
favourable tourist destination place for overseas and domestic visitors.
a) Wide product range:
Now a day’s tour operators offer wide range of services in order to
increase their sale. For example there is higher demand of package
holidays, tour operator sale tour packages with attractive prices like they
offer discount on the prices. Tour operators render different packages in
order to attract large number of tourists. Visitors or overseas consumers
attract towards those tour operators who offers wide varieties of services
with attractive offers.
b) All-inclusive:
Company can offer tour packages where it includes all types of cost
related with each item and offers unit price for the package. All cost
items include cost of air or other transport, land accommodation
expenses, cost related with meal and sightseeing etc. This kind of

Tour Operations
tour packages is suitable for professional and business personnel
who are travelling for the business purpose with their families.
b) Mass marketing
If tour operator advertises their services through mass marketing
tool, then they can increase their sale. Mass marketing help tour
operators in providing their services to every type of consumer
whether it is middle men or highly rich profile. Tour operators adopt
mass marketing tool for advertising its services and make appeal to
wide varieties of customers. It increases the overall cost that results
into high rate tour packages, they need to prepare effective
packages for every type of customers that require huge research
and information related to the demand of the customers.
If tour operator advertises their services through mass marketing
tool, then they can increase their sale. Mass marketing help tour
operators in providing their services to every type of consumer
whether it is middle men or highly rich profile .Thus the recent
trends in the tourist industry affect the whole industry in terms of
money, in terms of job and in terms of competition.
Inbound tourism
Increase in inbound tourism brings new opportunities for tour
operators and travel industry. It will help in increasing the business
of tourist operators. Increase in inbound tourism also brings job
opportunities for youth and increases their living standard, which is
the good sign of economic growth of the country. Inbound tourism
provides economic benefits to the country. If the large number of
tourist comes on the same destination to spend their holiday, then
the place creates its value and become preferable tourist
destination for future also. With development of tourism sector it
will also benefit the business of hotel industry.
Increase in inbound tourism adversely affect the need and want of
the local residents as they need to pay higher amounts to meet out
their necessities. Secondly it also impacts the environment as it
increases the air pollution, noise pollution, etc.
Domestic tourism
Domestic tourism also gives equal contribution in the development
of tourism industry. First of all, domestic industry gives its
contribution to the country’s economy. If the resident tourist
preferred the local city for their leisure time, then it will also affect
the inbound tourism. There will be growth in domestic tour industry
and it brings opportunities for tour operators. Domestic tourism also
helps in expanding the restaurant and other businesses.
There are some set of negative impact of increase in domestic
tourism is that it increases the pollution level, increase in
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exploitation of natural resources, increase in crime rates and many
more.
Digital advertising: Be it televised commercials or internet banners and
posters, digital marketing is present everywhere. Tour operators are
currently focusing on social media websites and search engine
optimisation techniques so that customers can be reached out without
any sort of inconvenience. Digital radio, e-marketing tools and brand
related websites are the basic platforms where company products and
services can be marketed.
Niche marketing: Specific set of audiences that are present in the
market are considered as niche and this niche is targeted with specialised
ads. This type of marketing is trending in areas where diversity in culture
and heritage is vast. Tour operators track customers and their needs and
requirements which automatically helps in formulating ads which are
niche specific.
Crowdsourcing: The power of customising advertisements according to
convenience of users is considered as crowdsourcing. It is the growing
trend in today's digital world. Competitions in which brand endorsement
and sponsorships are involved is the technique of outsourcing. From 2007,
this kind of advertising tool is trending and becoming popular amongst
customers.
iii) Building on i) and ii) make suggestions for the types of package my company
should develop:
For economic growth and profitability tour operators should plan and offer different
tour packages to their customer. On the basis of recent trend there are many options of
tour packages available to the company. This includes:
a) Package Tour: For overseas visitor’s company may plan for the package tour.
Package tour offers visitors two or more than two tourism services. The service
covers period of more than 24 hours or includes overnight accommodation.
A package includes:
 Transportation services through road, rail or air etc. from destination or
to destination;
 Accommodation services includes hotel, guest house or cottage
Company can give option to its customers to design their shorter tour as
per their requirement and customize their tour packages. If company
provides this kind of attractive tour packages to its visitors, then it can
bring economic benefit to the company. This package tour is suitable for a
family or visitors group.
b) Escorted tour packages: Company can hire professional tour
managers and organise escorted tour package for the visitors group.
Company will get benefit from this escorted tours that it could not
make any extra efforts to go to suppliers and other service providers
for the arrangement of other services. The whole arrangement is in

Tour Operations
the charge of professional tour manager. He makes structured
programme of sightseeing, meals, transportation and
accommodation. But these tours are expensive
than package tours.
c) All-inclusive package:
All-inclusive package is a set of services offered at a fixed price by a tour operator. It
usually includes transportation, accommodation and catering (e.g. All Inclusive), but
may also include tours, excursions and other services. According to European
regulations, for a journey to be called a package, it must exceed 24 hours, be sold at an
all-inclusive price and cover at least two of the following services: transport,
accommodation, excursions, Cultural or sporting activities.
d) For encouragement in domestic tour company can offer incentive trips
for the members of business organisation or staff of an enterprise.
e) Apart from this company may offer study tours for those student
group who are coming from the other country.
f) If tourist like to come to London for a specific season company can also
offer seasonal package tours to the visitors.
Airline:
The tour operator has three choices to set up his packages in advance:
The charter of aircraft: it leases a plane for a given duration, it is a
charter flight. If the estimated demand is not large enough, it can co-
charter the aircraft with other tour operators or market dry flights only.
The share: the tour operator leases a certain number of places on
regular flights and by regular airlines, to which he can surrender the
unsold places according to the conditions fixed during the negotiation.
The firm purchase: on certain destinations or on certain dates, the
allotment is not authorized (Air France on the West Indies for example),
the only way to obtain places then the firm purchase several months at
the time, Advance; Some tour operators have their own airline.
Hotel:
The policy of firm purchase and allotment is also valid for hoteliers; The
most important tour operators also acquired hotels belonging to them.
Marketing
For a long time, the tour operators sold their packages only by the travel
agencies, to whom they paid a commission e.g. company to company on
line. This mode of distribution, although still a majority, must now face
competition from the Internet, with more and more tour operators now
selling (on-line consumer).
Task2
i) Assess the stages that would be involved in developing that type of package and
also estimate the timescales involved so that your company will know when
they can implement their new initiative.
As per the recommendation given to the board of directors. There are
multiple tour packages available to the company. Company can arrange
group tours, study tours for students, escort tours etc. for the visitors. A
family plan their holiday in London and they contacted to the company.
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Company offers them five days’ tour package. There are many stages
involve in drafting package:
Planning:
The first stage is planning for a tour package. Visitors ask for unit price of
whole package. So in that package along with accommodation and
transportation services other services like breakfast meal, events, city
night seeing are included.
Research:
For making arrangements for sightseeing. Tour operator should find out
those places and tourist destinations which are suitable with budget of
tour package. Tour operator should not choose too many places which
cannot be seen by the visitors during time period of tour. It should be
ensured that if visitors demand for any specific destination or tourist
place.
Negotiation with suppliers:
Suppliers include bus service provider, hotel or accommodation service
provider and tour guide etc. All suppliers are providing their services to
the visitors on the behalf of tour operators. While planning for package
tours company should negotiate with these suppliers and make
agreements with them.
Legal obligation:
Making all the arrangements regarding to a package company should also
ensure that it complies all the legal requirements which are applicable on
tour operator.
Budgeting:
After making all the arrangements for the package, a budget is prepared
which includes all cost like cost of search, cost incurred in making
agreements with intermediaries etc. Budgeting gives a brief idea about
the total prospective cost incurred in tour packages this will help in
controlling cost of tour package.
Timescales estimation:
Planning for the tour package take time around one month as the time
period of tour is short. Searching destinations for tour package takes time
15-20 days which are suitable for the package, negotiation with suppliers
take 15 days’ time because there are many suppliers and after that 3-4
days are required for fulfilling legal obligations so one-month time period
is required in developing the tour package. To plan whole package and
implement new initiative 2-3 months’ timescale requires.
Forecasting: The tour package which is designed by the company has to
be made in such a manner that future predictions can be made. It should
be able to forecast the probability of success or failure of the strategy.
Contracting: This stage is considered to be little crucial because it
involves certain documentation that will help in legalising the entire tour
package. The structure that is designed has to be strong so that no legal
complication is faced by the company.

Tour Operations
ii) Evaluation of different method of contracting for individual components of the
package holiday.
The most important think for the tour operator while planning for tour
package is negotiation and contracting with individual components of the
package.
These individual components include transportation, accommodation and
other services arranged by the tour operators.
Following are the methods of contracting:
 Commitment: The most important part of a contract is
commitment. It may be possible that individuals that are involved in
this agreement be it suppliers or tour operators, may have hidden
motives. Commitment is an attribute of honesty and this cannot be
compromised in a proper agreement. Every person that is a part of
entire tour operations has to take his/her specific responsibilities
which will be a transformation of commitment.
 Allocation: Duties and roles of individuals must be distributed by
tour operators amongst other members without compromising
company demands. Allocation when performed correctly can result
into better accommodation and execution of contract.
 Ad hoc chartering: The process in which aircraft, helicopters or jet
planes are hired over a contract basis is referred as ad hoc
chartering. The trips that are involved in this type of contracts are
one ways, round trips or even multi-leg flights.
 Time series charters: The contacting in which certain transport
medium or vehicle is booked or chartered for a fixed period of time
with fixed voyages and trips. This type of contracts are formulated
as a loading and unloading costs which will be involved when hiring
or owning a particular vehicle for fixed amount of time.
a) Fixed contract:
Positive -It is a written contract executed between tour operators
and suppliers. Suppliers or service providers agreed at a fixed rate
prices for their services for a fixed volume based capacity. Tour
operators maximize their revenue and received benefits in off
season sale shortage. For example, Thomas Cook enters into fixed
contract with suppliers. Sometimes higher discount is offered in
these kinds of contracts because of their higher demand.
Tour operator prefer fixed price contract because consumers also
prefer transparency in prices of tour packages which can only be
provided through fixed prices rather than flexible prices. Fixed price
contracts also provide budgeting for all costs.
Negative -The main negative feature of this contract is tour
operator has to pay a fixed amount whether they utilize their full
capacity or not. A risk related with unutilized capacity is involved in
this contract.
b) Sale only contract:
Positive -In this contract prices for the services provided by the suppliers are
not fixed. Prices of services offered by suppliers are flexible and keep on
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changing. Suppliers are only charge for utilized capacity. This also reduces the
risk of weak responses for any tour package designed by the tour operators.
Negative -These contracts are made very rear because they have comparatively
high and often use by the consumers.
After analysing the above two contracts fixed contract method provide more benefits
than sale by contract method. Fixed contract are adopted mostly by the tour operators
Thomas Cook and TUI group adopt fixed contract method.
Recommendations
As per my recommendations they need to go for the fixed contract method as it create
transparency within their packages as well as help them in earning higher revenues
during peak seasons.
iii)Calculate, as the final
stage of your research,
the selling price of a
package
holiday using the attached
itinerary & rates.
1. Calculations based
on itinerary: -
(Eugenio-Martin &
Inchausti-Sintes, 2016)
Particulars
Amount in
NZD
ReturnAir Fare 5,349
Tokyo
Hotel room (per person, per
night) 104.86
Sightseeing tour
5 day tour 1,418.68
Full day city tour 246.73
Transfers (Between Airport
and Hotel)
Tokyo 30.84
Hong Kong
Hotel room (per person, per
night) 77.05
Sightseeing tour
Hong Kong Island Tour 29.9
New territories 28.75
Transfers (Between Airport
and Hotel)
Hong Kong 11.5
Bangkok
Hotel room (per person, per
night) 88.2
Sightseeing tour
Floating Market tour 41.16
City and temples tour 47.04
Transfers (Between Airport
and Hotel)
Bangkok 29.4
Cost 7503.11
Agent's commission (9%) 675.28
Total Cost 8178.39
Mark - up (15%) 1226.76
Selling price 9405.15

Tour Operations
2. Calculations based on itinerary: -
(Eugenio-Martin &
Inchausti-Sintes, 2016)
Joel Mambou Page11
Particulars
Amount in
NZD
Return Air Fare 5,349
Tokyo
Hotel room (per person, per
night) 104.86
Sightseeing tour
5 day tour 1,418.68
Full day city tour 246.73
Transfers (Between Airport
and Hotel)
Tokyo 30.84
Hong Kong
Hotel room (per person, per
night) 77.05
Sightseeing tour
Hong Kong Island Tour 29.9
New territories 28.75
Transfers (Between Airport
and Hotel)
Hong Kong 11.5
Bangkok
Hotel room (per person, per
night) 88.2
Sightseeing tour
Floating Market tour 41.16
City and temples tour 47.04
Transfers (Between Airport
and Hotel)
Bangkok 29.4
Cost 7503.11
Mark - up (15%) 1125.47
Total cost 8628.58
Agent's commission (9%) 675.28
Selling price 9303.86

Task 3
a) Evaluate the planning decisions that must be made for the
design of a Tour Brochure for your company’s new package
holidays.
Brochure is marketing tool used by Tour operators for advertising their tour packages.
Brochures are in the form of small book or magazine which contains images, and
information.
(Source:
http://www.leibnizo.com/leibnizotech/images/Brochure_Design_1.jpg )
There are two types of brochure used by tour operator online or e-
brochure and offline or traditional brochure. Tour operator provides
information of their different tour packages in attractive formats. Brochure
used as informative tool it provides information to the general public.
Brochure provides identity to the company.
For designing attractive brochure structured planning is required.
Planning decisions includes:
1) Budgeting:
Positive -A budget is prepared for that will come in brochure
designing. Budget helps in controlling actual cost of budget design.
Negative -Due to fixed budgets it may be possible that brochure
didn't get designed in desired manner.
2) Identify the customers:
Positive -Design and structure of brochure is depending upon the
type of customer market. Brochure only attracts the customers if it
is designed as per the need and requirement of consumers.
Negative -Brochure contain limited set of information and get
reviewed by everyone with this fact some of the low cost customers
didn't prefer to select the organisation for their purpose as they
didn't get adequate package for their purpose.

Tour Operations
3) Objectives: Brochure should be designed as per the purpose or
objectives of the company. Company should ensure that brochure
should contain all the information related with tour packages.
4) Collecting sample: For getting basic idea company should collect
some sample designs of the brochure. These samples give the brief
idea about formats used by competitors for attracting customers.
5) Consider form and presentation: As per the collected sample
company will decide format of brochure which includes colour
schemes, information and images use to show tour packages to the
general public. Presentation of brochure should be different from other
competitors.
6) Including stages of production: Once the content and print
instructions are provided by the company, there are stages of
production which need to be passed for acquiring best outcomes.
Copywriting, proofing, creating briefs, colour proofing, etc. are some
functions which are to be implemented right after format and
presentation is complete.
7) Decide colour scheme:
Positive -An attractive colour scheme should be decided for the
brochure. Always use a good combination of light and dark colour.
Colour scheme should not affect the typed information.
Negative - It may increase the cost of designing as well as become
an time consuming process as designer need to develop the
brochure attractive and for this purpose they require time as well as
money.
8) Decide time period: A time period should be decided so that
designing process of brochure completed on time.
So, these points should be considering while designing brochure. A
brochure should provide all the information to its reader. An attractive
brochure design will help the company in attracting customers.
b) Assess of the Suitability of traditional brochure in
comparison to E- Brochure
Thomas Cook and TUI group both is used traditional brochure in paper
form as their marketing tool but now with update of technology the tour
operators adopt E- brochure for advertising their tour packages.
E- Brochure is cost effective and time saving tool in comparison to
traditional brochure. E- Brochure and traditional brochure both have their
advantages and disadvantages.
1) Traditional brochure is available in paper form so there is no
need of search engine or internet but e- brochure is requiring
internet service and it can be downloaded and available for offline
reading.
2) There is wastage of paper and ink in printing of traditional
brochure which is also not good for environment but E- brochure are
in electronic format and there is no need to print this so it saves
environment.
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3) Traditional brochure is very costly rather than e- brochure.
4) Marketing personals are required to appoint for the
distribution of traditional brochure but there is no such need for e-
brochure.
5) Effective pictures and graphic designs are easily used in e-
brochure but it is not possible to use 3D diagrams and graphics in
traditional brochure.
6) Traditional brochures are time consuming it take more time in
printing and distribution but E- brochures are easily send to general
public through e-mails and social media.
7) E- Brochures approached many persons like potential
consumer, investors and funders at a single point of time but this
cannot possible with printed brochures.
8) Designs and graphics are easy to change in E-brochure but it
is difficult in case of traditional brochures.
9) Traditional brochures are useful only for those customers who
take lesser or no use of internet.
10) If company advertises its packages in the form of E- brochure,
then it can attract more consumers.
11) E- brochures help in increasing market of tour operator.
Recommendation:
The above comparison shows that e- brochure enjoy more benefits than traditional
brochures. Tour operator can use e- brochure of different type and styles at a time but
this cannot be possible with offline brochures .I do recommend my company to use e-
brochure.
E- Brochure appeal many people at a time but those who are unable to use internet
services and they think that e- brochure is waste for them.
The alternatives to paper brochures are as follows:
 Internet channels: Emails and newsletters are the current alternatives for paper
brochures. These are also present on the social networking sites and the pay per
click advertising links.
 Televised commercials are also popular form of brochures which are publicised
using different marketing techniques.
 Digital media can be used as an alternative to paper brochures.
c) Evaluation of the methods of distribution use when selling my company's new
package holidays.
Distribution methods are those ways used by the seller of product or services for selling
to ultimate consumers in travel and tourism. There are many distribution methods
available for the distribution of services, many of them are used by competitors of
Cosmos travel agency. Distribution methods are as follows:
1) Appointments of sales executives:
Positive
Tour operators appoint sales executives to sale its services. These sales executive
interact with customers face to face and offer them different tour packages. Sales
executive resolve the quarries arises by the customers. Sales through sales
executives also help tour operator to identify the demand of the customers so
that it can plan other tour packages for future.
Negative

Tour Operations
It increases the overall cost or the expenditures of the tour operators as they
need to pay them salaries, arrange training and development sessions in order to
enhance their skills.
2) Online sale of services:
Positive
Tour operator also provides their services with the help of internet.
With the use of E-mail operator offers tour packages to the
customers. It is a simplest way of direct sale. Tour operator cannot
do any extra efforts for selling its tour packages and customers also
ask their quarries directly from the tour operators.
Negative
It reduces the face to face interaction due to which influencing
power get reduced. It cut down the employee’s number as they
didn't require much sales executives because they get bookings
from their online portal.
3) Hiring Agents:
Positive
Tour operator can also hire agents for distributing its services.
Agents are helping tour operator in expanding the market and
increase in the potential customers. Agents charge certain
percentage of commission in consideration of their services. They
offer tour packages on the behalf of tour operator.
Negative
The overall cost of tour operators gets increased significantly as
they need to pay them salaries or commissions.
4) Partnership with related business:
Positive
Tour operator can also offer its services in association with other
business. Tour operator may enter into partnership agreement with
related business. For example: tour operator doing business in
partnership with hotel or accommodation service provider.
Negative
Tour operator only provides limited services or tour packages to
customers in this channel. It may increase the discrepancies among
the partnership over services and the cost charges.
5) Business to business channel:
Positive
Under this channel tour operator may hire services from other
service distributors. These service distributors offer tour packages to
ultimate consumer and the consumer could not about the original
service provider. This channel is also called opaque distribution
channel.
Negative
The prices of tour packages get increased as service distributors
add up some commission in it. Tour operators didn't keep in touch
with customers directly.
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Thomas Cook and TUI group are the major competitor of Cosmos travel
agency. They adopt direct as well as indirect distribution channel for
selling their tour packages. So, the company should adopt strategies like
direct sale through online and offline for offering tour packages to its
customer. If company uses technology and provide online services, then
customer will also attract towards the company and they take more
interest in availing services of tour operator.
The different methods of distribution of brochures are:
 Direct selling: Companies like Thomas Cook and TUI group are
focused towards selling their products and services directly to the
customers. It can be performed at the retail stores and company
outlets or on official websites.
 Sales through agencies: Different agencies of travel and tour
sector that operate on a small scale can be approached and given
the responsibility of distributing company brochures and products
to the customers. It is a kind of indirect sales.
 Call centres: Information and technology giants that outsource
business operations can be considered as a distribution channel.
Thomas Cook and TUI group can sell their package holidays and
other products through call centres that personally assist
customers over queries and complaints related to the same.
 Teletext: System generated text messages are also a form of
distribution channel which is used by TUI group for selling and
promoting products and services of the company across the nation.
This method is cost effective and doesn't involve any sort of
complication.
Task4
A) Your company will have many strategic decisions to make during the
development phase of its own package holidays so you carry out some research to
help with those decisions. What you then do is evaluate decisions made by two
different tour operators considering:
Strategic decision making is a process where ideas are developed and
putting into action for the future development of organisation. So,
strategic decision making is very important because it is related with
future.
Strategic decisions are related with every function or activities of the
organisation. Operational and day to day decisions are based on strategic
decisions. Tour operators formulate strategies regarding pricing, volume
and surcharge policy of tour packages with an objective of earning
revenue from them according to seasonality. Tour operator makes
following strategic decisions:
i) Volume
According to Passengers Carried Under Largest Air Travel
Organisers’ Licences table given on Sharepoint, so looking at both tour
operators change percentages i.e. Thomson Holidays Ltd14% of change and
Unijet Travel Ltd 16% of change I can conclude that:
Positive -The tour operator takes strategic decisions on the basis of
their business volume in a particular season. Like Thomson Holidays

Tour Operations
Ltd. launch new products as well as make product development that
helps in increasing by 14% change of their sales. They prepare tour
packages as per the demand made by customers.
For example, during summer holidays international visitors
demands for package holidays for their family and friends increase
because of introduction of another supplements. On the other hand,
Unijet Travels Ltd. offers them children discount or senior citizen
discount with attractive tour packages to increase in their sales
ratio. They also make offer flexible tour packages where they can
change their items in that package as per demand made by
consumers.
Negative -By making product development or introducing new
product results into increase in overall costs for Thomson Holiday
ltd. On the other hand, by offering discounts and flexible tour
packages Unijet Travels Ltd. get lower profits.
The volume of trade or amount of demand which is being
experienced by the company in current target markets helps in
making strategic choices effectively. Thomson Holidays doesn't
consider this aspect as an important one while on the other hand,
Unijet Travels considers volume of demand and supply to customers
as a significant component in strategic decision making.
ii) Pricing Strategies:
Both the tour operators Thomson Holiday Limited and Uni jet travel
Limited Decided their tour package prices on the basis of season
ability, demand of consumers and competitive prices strategies.
Positive -Thomson Holiday Ltd revise their prices and set some
reasonable prices that attract the number of customers which
results into increase their sales by 14%. On the other hand, Unijet
Travel Ltd. lower down their prices (even if the demand is higher) by
giving heavy discounts to their customers during peak season that
help them in increase their sales by 16%. Both tour operators
provide online payment facilities to their customers.
Changes in the percentage of passengers with the change in
prices of both the tour operators in the year 1998 and 1997.
Negative -Thomson Holiday Ltd as well as Unijet Travel Ltd enter
into competition, lower down their prices in order to attract number
of customers due to which they earn lower profits and after
deducting their overall costs they remain with lower ratio of profits.
But Thomson Holiday Ltd. Provides services with the help of
wholesaler and retailers and Unijet Travel Ltd. Uses International
Joel Mambou Page17
Twelve Months To September 1998 1997 % change
Tour operators
Thomson Holidays
Limited
4,254,571 3,732,398 14
Unijet Travel Limited 933,440 807,564 16

tour operators as wholesalers and provide services to overseas
customers which increase cost price of tour packages and affect
their final profits.
From the above negative and positive aspects of pricing strategies,
it can be inferred that Thomson Holidays has an efficient strategic
decision making system as compared to Unijet because of its their
correct distribution systems with branding policies that helps in
maintaining good relations with customers in the long run.
iii) Surcharge policy:
Surcharge fees along with the charges of tour packages. It is an
additional fee occurs due to the currency fluctuations. When
customers booked their tour holiday in advance and any changes
occurs in currencies then tour operator may ask customer to pay
surcharge on the tour packages.
Positive -Thomson Holidays Ltd. and Unijet Travel Ltd. get benefit
with this policy as it helps in reducing the uncertainties losses as
they recover their funds with the help of this policy. Both tour
operators charge additional fees if any fluctuations in prices occur
but they can change their package prices if any policy or action will
take by the government. Tour operators follow the commands
prescribed by ABTA and CAA.
Negative -This policy put adverse impact over Thomson Holidays Ltd. and Unijet
Travel Ltd. as they increase the prices due to currency fluctuations that increase
the dissatisfaction among the customers and lead towards a doubt of
discrepancies. Thomson Holiday Limited shows its surcharge fees in
its brochure to make aware the customer about this but Unijet
Travel Limited does not make full disclosures about the policy. in this
situation Association of British Travel Agents (ABTA)and Civil Aviation
Authority (CAA) must be informed.
The amount of surcharge fees or the extent up to which Thomson
holidays has been implementing surplus pricing is quite high as
compared to Unijet. These companies have developed their surcharge
policies in such a way that maximum profits are grabbed without
affecting market share. Moreover, it is evaluated that stronger brand
image is considered only when pricing is high. This is visible in the case
of Thomson Holidays.
Competitive Strategy:
Positive -There is cut throat competition among Thomson Holiday Ltd. and
Unijet Travel Ltd. because both of them provides adequate level of services. So,
both of them formulate competitive strategies related with prices and type of
services offered. In the environment of competition both of them offers attractive
tour packages at reasonable price to the visitors helps in remaining within
market in the future market. Both of the tour operators make close relationship
with suppliers so that they offer more holiday packages for sale and increase
their market share unless competitors reduce their market share by cutting their
capacity.

Tour Operations
Negative -With the effect of competition Thomson Holiday Ltd.
lower down their prices whereas Unijet Travel Ltd. offers higher
discounts to their customers. These strategies impact adversely as
it lower down the actual earnings.
Marketing Strategy: In order to increase market, share and enjoy
higher profits tour operators should take decisions regarding their
marketing strategies. Marketing strategies includes decisions for
promotions and distribution channel of services. Tour operator should
promote their services with the help of different advertisement tools like
brochure and setting up different distribution channel for selling the tour
packages to ultimate consumer.
B) Tactical decisions taken by my chosen mayor tour operator which is Thomas
Cook
Tour operator takes tactical decisions in order to meet their action plans
with their strategies. Tactical decisions are short term decision and
narrowly focused. When the tactical decisions meet with the strategic
decisions then they will improve the capacity of the organisation to
survive and thrive. Tactical decision is made depending upon the long
term planning of the organisation. "Thomas Cook" takes many tactical
decisions.
(Source:http://1.bp.blogspot.com/-50fx_7OdqS4/VUbHL1q8pEI/
AAAAAAAABJo/ZGc2UZn3BVc/s1600/Planning.PNG )
Tactical decisions include:
a) Thomas Cook can formulate short term pricing strategy. If they
found that there is boom in tourism industry they change their
pricing strategy in order to sale their services maximum. They
offer discounts on early booking of holiday tours to attract more
customers. It will reduce prices and commission on the tour
packages.
Joel Mambou Page19

b) Providing facilities like car hire, airport parking and currency
exchange at comfort level of the customers. This will increase
customer’s loyalty and faith towards Thomas Cook.
c) Try to connect with his customers by using telephone text
facilities, call centres, e-mail etc. This will help him to know the
requirement and demand of customers and he can sale his
services directly to consumers.
d) Tour operator must ensure that the packages and tours are
different and unique from others and customers have full
information about product of the company it will help in creating
the brand image.
e) Thomas Cook contacted with many suppliers like hoteliers and
airlines so that he can offer tour holidays at an economic cost
and bulk sale of services helping them in earning margin profit.
f) Thomas Cook uses cost effective advertisement tools in order to
advertise his product. E-brochure, e-mail advertisement etc. are
the cost effective promotional tools.
g) Thomas Cook creates websites and provide online services to
customer. Website is not only use for selling the products but also
help customers to collect information about the quality of services
provided by tour operators.
Comparison of tactical decisions to make in different situations
Thus, these are some tactical decisions taken by Thomas Cook in order to run the
business in smooth and easy way and earn higher profit with competitive advantage.
Tactical decisions are taken on the basis of realistic situation in order to meet strategic
goal.
Enter into contract with many agents who provide services on the behalf of tour
operators. Adopting wrong tactics will wrongly affect tour operator and organisation’s
future. A right tactical decision ensures the success of organisation.
The different situations in which Thomas Cook has to take tactical decisions are:
 Increasing competition: Competition is the most dominant factor that leads to
tactical decision making. Thomas Cook group when is addressing severe
competition from other brand holders or new entries then, decisions are based
entirely on competition analysis.
1. Price wars: Majority of tour operators have tour packages that are common in
destination and other facilities. This implies that buyers will make choices only
according to prices. Hence, price war between such tour companies occurs.
Thomas Cook has to make tactical decisions regarding prices of their tour
packages for sustaining competition.
 Maximising accommodation occupancy: Contracting is usually accommodation
of aircraft seats, coaches, beds in hotels, etc. The situation in which companies
are fighting their best to occupy maximum number in every possible field has led
to tactical decision making. Thomas Cook needs to make decisions in such a way
that competitors are not aware of any of their strategies.
Conclusion
The report explains the role of tour operators in the travel and tourism
industry of UK. This report explains the recent trends prevailing in tour
industry and their effect on the business of tour operators. Different type
of holiday tours is available in the market and the role of marketing and

Tour Operations
promotional tools in the advertising of these holiday packages is also
describes in the report. This report also explains that e- brochure is more
effective and beneficiary advertisement tool than traditional brochure
used by tour operators. Tour operators adopt various distribution channels
to provide services to their customers. Tour operators have to take
strategic decisions for the future business and tactic decisions in order to
meet goal and objectives.
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