Developing a Tour Package

This assignment content discusses the stages of developing and planning a tour package that will ultimately satisfy every tourist. It highlights key aspects such as the role of public transport in tourism, environmental supply chain management, and regional development in airlines and travel agents' relationship. Additionally, it explores various journals that focus on topics like information sources for travel decisions, adventure tourism products, and tourism marketing strategies. Furthermore, it touches upon issues related to destination safety, hotel prices, and distribution channels in the travel industry.

TOUR OPERATIONS

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Effects of current and recent trends and developments on the tour operators industry...1
TASK 2......................................................................................................................................3
2.1 Stages and timescales involved in developing holidays..................................................3
2.2 Suitability of different methods of contracting for different components of the holiday
and different types of tour operator........................................................................................5
TASK 3......................................................................................................................................6
3.1 Planning decisions taken for the design of a selected brochure.......................................6
3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour
operator..................................................................................................................................7
3.3 Suitability of different methods of distribution used to sell a holiday for different types
of tour operator.......................................................................................................................7
TASK 4......................................................................................................................................8
4.1 Strategic decisions made by different types of tour operator...........................................8
4.2 Compare the tactical decisions that could be taken by a selected tour operator..............9
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Tourism is becoming an economic booster in both developing as well as developed
countries all around the world. The tour operators organises the whole trip for their clients
including all the other elements compiled with tourism experience. They organise such
complete package at reasonable price. The tourism sector in UK accounted 4 percent growth
rate which is the most effective rate as compared to other sectors of business in UK. Here, the
report is explaining the influence that current trends and development have on tour operators.
Further, the paper inculcates various stages that are adopted by tour operators and deal set by
them with their clients to offer them different package tours. Moreover, different promotion
method are explained that can be used by company to promote tourism sector and target
customers. At last the report is summarized by describing various tactical and strategic
decisions taken by operator in operating day-to-day business.
TASK 1
1.1 Effects of current and recent trends and developments on the tour operators industry
A tour operator offer the full holiday package by providing bundled services including
transportation, accommodation and other related services. These packages offered by tour
operators are segmented according to the approach of travel and different mode of lodging
and accommodation like hotel chains integrate with tour operators and provide short breaks
and weekends in the business trip. There are number of business set by tour operators in UK
which can be grouped into following categories:
 Big market tour operators who provide and sells high volume of holidays for different
purpose such as Thomson, Thomas cook, and First choice holidays;
 Specialist tour operators who provide particular types of tour in which they are
specialized and offer holidays to specific region for adventure for example, Discover
The World, Amazon or South East Asia;
 Another category is domestic tour operators who provide holiday packages to travel
within UK such instance WA Shearing;
The various development and main trends in travel and tourism sector are as follows:
 Increase in spending power – In recent time’s power of spending of public is increasing
because of which there is increase in the growth of travel and tourism sector. People travel
to different purpose because of various reason including leisure, education, business etc.
due to which, there is also benefit to local people of country. Also, this had provided
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several opportunities to tourism sector as well as other sectors also (Bastakis, Buhalis and
Butler, 2004).
 E-commerce technological development – The development in present tourism business
depends on the E-commerce development based on technology. With the help of such
technology, information related to business can be reached to wide range of customers.
Online booking facility provided to customer has increased the growth rate of business as
customers feel comfortable while booking and cancelling any holidays while eliminating
the distance (White, 2008).
 Niche segment of tourism - The existing system of tourism business is comprised of
distinct niche market segment. For instance, the main niche segment in UK is newly
married couples. Through segmenting market into different niche market can help
company to earn more profit by concentrating more on a particular segment. In UK one
another Niche segment is Olympics. The profit increases at a tremendous speed at the time
of London Olympics. People around the world visit to UK for either participating in the
event or watching and enjoying (Budeanu, 2005).
 Tailor made package holiday – This means organising the package according to the
preferences and situation. This helps client to get customised holiday packages to explore.
In order to receive more benefits, customers select the package on their choice and acquire
maximum satisfaction.
 Demographic changes – In this sector, novel horizon to be opened are supported by
changes in customer’s demographic manner. Based on the condition of demography of
customers, packages are designed and offered accordingly (Alamdari, 2002).
 Market research – Market research conducted by company helps management to know
about demands and needs of customer. On the basis of research, strategies are designed
and adopted to provide maximum satisfaction to customers (Swarbrooke and Page, 2012).
 PESTLE factors – The one another factor that influence the business of travel and tourism
business are PESTLE which includes political, economic, technological, legal, and
environmental. Among these political, economic, and technology affect the most. For
instance, people will not prefer to travel to those areas with political instability as they feel
unsafe such as Syria. Also, this sector is influenced by the currency prices of region,
inflation, deflation, and other related economic factors (Ingold, Yeoman and McMahon-
Beattie, 2000).
 Focus on satisfaction of customers – According to this factor, management rather than
providing different services should focus on proving high value of money spend by
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customers which will increase their revisit. It is also important to gain competitive
advantage by increasing the level of satisfaction by offering them high value services. The
main aim of tour operator is to attract customers and increase their loyalty towards
company. This will benefit company to retain their customers and provide them best of
company’s services.
 Role of government and related organisation – Government of UK also provide support in
the growth of travel and tourism business of UK. This support has been provided in
regards to flexible VISA formalities, decreasing taxation norms on tourist activities and
providing money for the development of this sector. The government and some private
companies also helps local who stay near the tourist destination. There are other bodies
like Association of Independent Tour Operator (AITO) that helps this sector to grow in
various ways (Ritchie and Ritchie, 2002).
 Tourism marketing – Marketing under this sector includes spreading the knowledge about
new explored tourist attractiveness spot and about different packages offered by company
at reasonable prices. This also includes marketing about various facilities and services
provided by tour operator.
 Focusing conversation – In addition to just focus on increasing revenue of company, tour
operator also give emphasis on conserving the tourist destination for the long period of
time so that more tourist visit and revisit such place. Government and non-governmental
organisations also play a vital role in conserving such tourist destination so that the locals
residing near to such area can also take benefits from different tourist activities taking
place at such region (Klemm and Parkinson, 2001).
 Economic function – Travel and tourism business contribute a lot in increasing the GDP of
UK and overall economy. Moreover, tourism business also supports and give further
opportunity to increase employment rate in UK (Kerzner, 2013).
TASK 2
2.1 Stages and timescales involved in developing holidays
Planning and designing a tour package is a critical activity which includes various
factors to be considered by tour operator. Generally, timescale involved in planning and
developing a holiday is around 12-14 months. The stages involved in developing are as
follows:
 Research about destination and market – In order to develop a holiday package, it is
essential to conduct market and destination research. This would require around 2-3
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months of tour operator to undertake this procedure. Such process of research includes the
following steps:
- Identification of various external factors that influence the present as well as future
development of tour including political, legal, economic etc.
- Identify the target market, tour operator will obtain large percentage if the target
market is small and vice versa.
- Identification of main destination and comparative study about alternative spot.
- Deciding various policies for development (Martinich, 2008).
 Tour Itinerary development – This stages involves deciding the itinerary once the
destination is decided. This includes various other related services that are provided other
than transportation like accommodation, various spots to visit, food facility, local
transportation etc. This will take around 1 month to develop (Adriana, 2009).
 Negotiation – The time requirement under this step is around 2 months. This includes
negotiating or bargaining about the prices received from supplier and vendor about the
services provided by them on behalf of tour operators. This is required under various
services like food, accommodation, local transportation and other related services.
 Evaluating cost of a package – Once the negotiation is completed, tour operator is in a
position to calculate all the direct and indirect cost incurred or to be incurred while
providing complete package to tourists. This is one of the critical step which requires
proper evaluation hence it takes around 2-3 months of tour operator so that exact costing is
analysed (Cavlek, 2002).
 Financial evaluation and pricing – While evaluating all the cost of a package, it is also
essential for tour operator to evaluate all the financial risk in a holiday package which
requires 1 month like currency fluctuation, change in taxation rates, and changes in other
rates of accommodation, food etc. (Jones and Lockwood, 2002) Further, pricing is a
complex decision because there is no any generalised tour pricing evaluation formula that
can be used by all tour operators. In this context, following pricing approaches can be used
such as:
- Cost- oriented tour pricing like mark-up cost, product cost, rate of return, total cost
etc.
- Market- oriented cost that involves various formula like skimming pricing,
penetration pricing, differential pricing etc.
 Marketing – Once a pricing policy is decided, almost more than half process is completed
of development of package holiday. Now tour operator is required to conduct marketing
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process of the package decided to be offered to tourist. There are various ways that can be
adopted to market a package including marketing through television, brochure, internet,
social marketing etc. This requires 1-2 months to deliver the information about the
package designed by tour operator (Molina and Esteban, 2006).
 Development of a tour – This is a final stage under developing a package by conveying all
the features of a holiday package to tourist and promote the package to global customers
base. This particular step will take around 2 months (Sanoff, 2000).
2.2 Suitability of different methods of contracting for different components of the holiday and
different types of tour operator
There are mainly two methods that can be adopted by tour operators to design tour
packages. These two methods are sale only contract and fixed contract. Here, in the task two
different tour operators selected are Discover The World Ltd. and Thomas Cook. They will
compare in terms of different kinds of services provided. These services include
accommodation, transportation and many other services provided by the tour operator. The
given two contracting methods are discussed here under in regards to selected tour operators.
 Fixed contract: In the fixed contract, the companies make sure about the use of volume-
based capacity to maximize their revenue collection during the period of off seasons.
Moreover, Discover The World Ltd. has made all arrangement through fixed contract and
these arrangements depend on customer expectations. The specific operator will book total
capacity by making payment according to the capacity utilized (Richer, 2010). Therefore,
the particular tour operator Discover The World Ltd. has designed the packages keeping in
mind the fact that summer is the peak time for the tourist visit and there are very little
probability of non-utilization of capacity. The fixed contract will offer high discounts as
the number of the people that take advantage of the tour packages seems high. Therefore,
by the fixed contract the tour operator has selected its tour package because it believes that
high number of individuals will come to acquire benefits of discounted tour packages
(O'Mahony and McMurray, 2008).
 Sale only contract: The sale only contract has been select by Thomas Cook for designing
their tour packages in South America .Such type of contract are designed at the period of
lean session and are more expensive comparatively. Moreover, these contracts are made
by keeping in mind the requirements of potential customer. Under this contract, the tour
operator will pay only for those services, which are used by the individuals. They do not
bother about the non-utilization of capacity. This contract gives special attention to their
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target customers. It also gives different type of facilities to them with high cost (Lyall,
2005).
After discussing above two contracts, it can said that both contract have their own
merits and demerits. While fixed contract method offers advance booking of facilities, high
discount, pre-decided levels of profit for the organization, etc. On other hand, the sale only
contracts reduces the wastage of funds by non- payment of un-utilized capacity and pay
attention on target customers (Verma, 2016).
2.3 Calculating the selling price of the holiday package
Services Selling price for 15 students
(£)
Accommodation in St Michelle 47.67x8= 381.36
Supplement for BB 7.95x15= 119.25
Transportation by luxury coach 1000
Local Guide 200
TOTAL 1700.61
Margin of 10 percent 170.61
Selling price 1870
Here, the value of Euro can be changed into Pound for effective calculation of Cost
 10 euro=7.95
 60 euro=47.67 pound
TASK 3
3.1 Planning decisions taken for the design of a selected brochure
Brochure is way of conveying information to customers and sell package holidays
through both online as well as offline mode. Discover the World ltd. will receive benefits or
reaching wide network of customers through low cost brochure distribution. The designing of
brochure requires planning, research, organising, and implementation of current package
developed by tour operator. The decision related to planning in the context of designing of
brochure for current package holiday are as follows:
Recognition of issue related to planning – In order to effectively develop a brochure for
promotion of current project of package holiday, there are certain factors that are to be taken
under consideration by tour operators. These factors include various problems like basic
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objective behind developing a brochure, format and timescale in which it will be designed
(Bendito and Ramírez, 2011).
Format – Format of brochure plays a vital role as it is the first sight to attract the customers in
taking initiative to read the informations given on brochure. Format selected should be
attractive and easy to understand. It also requires tour operators focus towards pre-deciding
the format as well as matching it with the desired segment (Bennett and Strydom, 2001).
Target market and budget – Discover the World ltd. will target their customers on the basis
of particular segment selected as niche market, mass market, and speciality market. Once the
target market is selected, company needs to plan a budget for their business. This is an
important aspect as through budgeting, spending power of customers will also be analysed by
the company. This will helps business to plan other different both current as well as future
factors (Ujma, 2001).
While designing brochure, stages and timescale required – The time period required for the
completed designing of a brochure will also be mentioned in the planning decision of
brochure. Not only timescale but also the stages that are involved in designing will be
mentioned in brochure planning decision (Lubbe, 2000).
3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour
operator
Alternatives and Substitutions of traditional methods are used by Discover the World
ltd. and Thomas Cook in order to improve the current brochure quality so that more
customers are attracted towards the information provided in brochure of company. Earlier
brochure was already used to convey the information and data about the packages designed.
But, modern techniques of brochure help tour operator to adopt some other mediums also in
order to provide information and marketing of package tour designed. The new modern ways
to design a brochure for company is e-brochure (Hudson, Snaith, Miller and Hudson, 2001).
This electronic brochure has reach a mass population which was not possible under
traditional way of distributing physical brochure to public. The total cost including designing
and develop e-brochure is comparatively very less than physical brochure (McCabe, 2010).
In addition to this, other visual medium brochure can a possible alternative for the
above mentioned two tour operator. This have high impact on the customers and attract them
towards the package offered by tour operators. The visual beauty on the destination and other
related vital information can be provided to mass clients through the use of visual brochure.
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Further, it will help tour operators in increasing sales of package holiday designed by
operators. Moreover, video brochures can be used to provide information and to promote by
combining it with other tools of social media like Facebook, YouTube etc. (Evans, 2009).
After the proper analysis of above mentioned e-brochure various aspect, it can be
suggested to Discover The World Ltd. and Thomas Cook that they should develop a cohesive
brochure including video brochure, e-brochure, and online campaign of marketing. These are
both designed as well as linked to each other effectively (Pyo, 2015).
3.3 Suitability of different methods of distribution used to sell a holiday for different types of
tour operator
Brochure has been taken as a best approach for selling a package tour as designed by
tour operator now and even from past years. But as the technology increase with the time,
designing and developing system of a brochure changes. In the present business scenario,
designing of a brochure is highly technology oriented in the travel and tourism sector. Hence,
Discover The World Ltd. also adopt highly technological base for designing its brochure for
marketing and selling different packages (Pechlaner and Innerhofer, 2016). The various
approaches that be adopted by company for selling the packages includes different channels
such as direct selling, telephonic sales, online sales, call centres, messaging etc.
For online selling of brochure, direct sale method will be beneficial for tour operator as
the company will be able to target a wide network of population through online marketing, In
addition to this, information can be provided easily to all the customers through online
sources like social media, internet ads etc. Also to target customers, tour operators can take
use of e-mail marketing which is an effective marketing tool in present business scenario plus
it is being widely used by many business associations especially in travel and tourism sector
(Bieger and Laesser, 2004). Hence, with the help of above analysis of different method of
selling holiday packages, it can be suggested that both direct selling as well as online
marketing is beneficial for Discover The World Ltd. for selling different packages designed
from time to time (Devashish, 2011).
TASK 4
4.1 Strategic decisions made by different types of tour operator
There are a number of elements included under flexibility in a system of travel
business. These elements support businesses in increasing their profit by various ways.
Several decisions are taken by tour operator in day to day business. Strategic decisions
includes different competitive strategy, pricing policy and targeting customer that would
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create a different segment for tour operator. The strategic planning is essential for business as
it is a base for future course of actions (Tkaczynski, Rundle-Thiele and Beaumont, 2009).
The strategic planning that is required includes the following:
 Segmentation, targeting and positioning – It is an strategic planning which requires
segmenting the whole market into sub units, targeting the customer and area to reach, and
positioning means finalisation by tour operator. They make their final decisions after
analysing all the aspects completely based on their competency and likely customers that
are targeted by them (Evans, Stonehouse and Campbell, 2012). For instance, market
segment of Discover The World Ltd. is adventurous trip and they target tourist of
youngsters between the ages of 18-30 year. The positioning strategy adopted by tour
operator includes marinating the brand image by including all the other offerings in the
package (Espinet, Saez, Coenders and Fluvià, 2003).
 Competitive pricing – In order to create dominant position in the market, company should
adopt a pricing policy which creates competitive advantage to a company. This would help
company to attract leading customers and create a network of loyal customers even in the
highly competitive market. For instance, in off season tour operator offers a discount to
their customers to create a yield in a company. In such time period, customers would get
more value of their money by spending less through discounts which will make there stand
strong in the market against competitors (Buckley, 2007).
 Strategy for promotion – The creativeness of tour operators will support business in
promoting their packages. Under this strategy, tour operators are required to select the
promotional tools and methods to be utilised for promotion. It is a strategic decision which
require creativity and innovations that add value to the business (Doswell, 2009).
4.2 Compare the tactical decisions that could be taken by a selected tour operator
Decisions taken for handling daily business operations and designing various package
holiday by Discover The World Ltd. as a selected tour operator are tactical decisions. These
decisions are significant for business in order to ensure smooth functioning. Some of the
decisions include organising accommodation, negotiation with service suppliers, and
integrating with other suppliers to provide other related services required for designing a
complete package (Buckley, 2011).
One another tactical decision required to be taken by Discover The World Ltd. includes
making tie up with other service providers. It is essential for company to follow corporate and
personal selling tools in order to make such tactical decision. This would involves organising
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meeting with different suppliers and then integrating with particular service provider
according to the requirements of customers.
Consideration of customer’s satisfaction and increasing their level of satisfaction is
another tactical decision. In this various methods and tools are used to calculate the
satisfaction received by customers by package holidays offered to them. In order to calculate
customer’s satisfaction, information is collected from customers. It also includes analysing
various problems faced by customers and tour operators and try to fulfil them as early as
possible. After identifying the issue, remedial actions are taken by management which
improves customer’s level of satisfaction and improve customer experience.
Deciding effective pricing policy is another significant factor for tour operators. By
utilising fixed price contract, the tour operators can provide their customers with good price
discount. This would support business to attract more customers towards the package holiday
offered by tour operator. Further, this will help company to gain competitive advantage in the
market and beat their competitors (Buckley, 2000).
There are different seasons based on which packages differs including a range of prices
for which packages are offered. The season may vary from lean to peak or say off to high.
Also, pricing is chosen on the basis of season. For example, in peak seasons prices are high
and vice versa. Discover The World Ltd. can increase their business profitability by adopting
effective and sophisticated pricing approach for their services provided by using yield
management and dynamic pricing (Lubbe, 2000). In order to yield management, seasonal
pricing is generally adopted by company in order to receive high profits. On the basis of past
records, company can differ their prices in low and high season in order to receive more
profits out from the market by attracting customers through offering different prices. Other
examples of yield management through which revenue of the company is increased are
urgent pricing and peak pricing (Pender and Sharpley, 2004).
CONCLUSION
The above report explains several aspects of tourism business in relation to Discover
The World Ltd. and Thomas Cook. The different tour operators are required to offer
customized package holiday based on flexible strategy related to pricing. It will increase the
number of selling packages. The operations of tourism business includes planning,
organising, marketing, promoting, negotiating, and selling different package holidays that
provide positive results to the business. In addition to this, e-brochure is an effective tool
used by many of the tour operators in order to reach mass population in low cost. This also
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includes direct selling of packages to their customers and hence increasing customer
experience. Further, many strategic and tactical decisions are required to be taken by tour
operators in their daily business to increase the quality of their offerings and achieve more
profit and objective of the business.
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