Tour Operators' Role in Travel and Tourism Industry

The assignment discusses the importance of tour operators in the travel and tourism industry. It highlights various trends such as the use of technology to sustain profits, different stages involved in planning a holiday (research, planning, forecasting, budgeting), and effective promotion through brochures, websites, direct sales, and agencies. The document also touches on strategic and tactical decisions made by tour operators to achieve competitive advantages.

TOUR OPERATIONAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
LO1 UNDERSTANDING TOUR OPERATORS INDUSTRY.....................................................1
1.1 Recent trends in Tour operators’ industry (Leaflet)..............................................................1
LO2 STAGES IN HOLIDAY CREATION....................................................................................3
2.1 Stages and timescales involved.............................................................................................3
2.2 Different methods of contracting..........................................................................................4
2.3 Estimated selling price..........................................................................................................4
LO3 BROCHURES AND DISTRIBUTION METHODS..............................................................5
3.1 Decisions regarding brochure's design..................................................................................5
3.2 Alternatives to traditional brochures.....................................................................................6
3.3 Methods of distribution.........................................................................................................7
LO4 STRATEGIC AND TACTICAL DECISION MAKING........................................................8
4.1 Tour operators' strategic decisions........................................................................................8
4.2 Tactical decisions taken by Tour operator............................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Tour operational management have an important role in Tourism and travel industry.
Tour operators are liable to provide new products or travel packages to visitors or travellers.
Through offering number of new tourism products to customers, they attracted towards popular
destinations. Emerging trends, various stages and different contracting methods used involved in
creating holiday packages is been explained in this study. Tour operator selected for studying
this report is Trailfinders. It is a UK based Travel company, with around 29 travel destinations
within country. Organization focuses on various promotional and distribution strategies, that
includes both traditional and modern methods. Finally, various strategical and tactical decisions
that are taken by tour operators.
LO1 UNDERSTANDING TOUR OPERATORS INDUSTRY
1.1 Recent trends in Tour operators’ industry (Leaflet)
Tour operators are one who
create a package or combines
travel process on the basis of
customers' requirements or
desires. To promote their tour
and holiday package, they
advertise and design brochures
(Kerzner and Kerzner, 2017).
Different types of Tour
Operators:
 Inbound Tour
Operator: They
directly handles or
deals with inbound
foreign tourists on their
arrival and departure,
Tour Operators
Associations:
 Association of British
Travel Agents
(ABTA): By providing
guidance on issues
related to safety and
health of travellers, on
raising standards for
industry etc. are the
main functions of
ABTA. They also,
provides financial
protection to tourists
while travelling from
place to place.
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to provide services
such as transportation,
accommodation,
currency exchange,
sightseeing, etc.
 Outbound Tour
Operators: These have
an expertise in
designing and
promoting international
tours. They provide
holiday package on
pre-decided period to
person or groups of
their own nation to
other country/s.
 Domestic Tour
Operators: They
operate and provide
various individual or
groups travellers needs
within boundaries of
home country (Cetin
and Yarcan, 2017).
 Association of
Independent Tour
Operators: Around
120 independent and
specialist tour operators
are members of this
association, who
operates in about 170
countries (Holland and
Leslie, 2018).
Consumer protection is
placed fully by tour
operators for becoming
its members.
Recent Trends in Tour
Operator industry:
 Mass market tourism
to customisation:
Travellers know prefer
to travel unexplored
places instead of
visiting popular
destinations.
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 All inclusive holiday:
Tourists wants to have
a complete holiday
package, inclusive of
accommodation,
transportation, food,
etc.
 Use of technology:
Tour operators have
now using advanced
technologies for
effective promotions
and operations.
Effects of current trends and
development on tour
operators:
 Travellers have become
independent; they
prefer to travel alone
instead of group.
 Flexible booking
options are available
through online, which
have saved a lot of time
and money.
 Destination marketing:
Marketing of various
holiday packages have
been done on basis of
destination's features
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(Medlik, 2016).
LO2 STAGES IN HOLIDAY CREATION
2.1 Stages and timescales involved
Following are various stages involved in developing holiday plan:
 Market Research: Key elements associated with specific tourist destination or market
are analysed and understood in research regarding tour packaging (Deresky, 2017).
Various characteristics of Brussels and Brugges are identified by Trailfinders, so that it
could be offered to travellers.
 Planning and Scheduling: After research is conducted regarding target market and
destination, for effective tour guide, developmental process is involved. Tour guidelines
are prepared for providing vital information to travellers such as Brussels' assembling
point, duration of tour, features, legal requirements, date of departure, etc.
 Forecasting and Costing tour package: Monetary value for tour package is determined
in this stage. Future sales are estimated in this process, to predict short and long-term
performance. It gives perception on how company manage its resources, cash-flow and
workforce. Cost involved for shaping individual components into a tour package are
considered for costing of tour package. Accommodation cost, air travel cost, marketing
cost, etc. are involved as determinants of cost.
 Financial Evaluation and Pricing: Tour operator has to determine estimated future
prices for selling, rates of exchange and finalizing prices for tour to Brussels and
Brugges, after costing for package tour is been made (Long and Shi, 2017).
 Marketing: Marketing plan is developed for tour package. As key manipulators of
tourism industry, various elements are combined into standardised and affordable tour
package. Marketing plays an important role for determining flow of tourist in Brussels
and Brugges.
 Operation and Execution of Tour: Promises are converted into realities in this stage,
whatever promises are made to tourists are been taken utmost care and been fulfilled.
Managing tours helps to establish reputation and standards for tour company.
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 Post Tour management: In this stage evaluation of tour program and several reports are
made for determining success of tour, by assessing financial gains, satisfaction level of
tourists, etc. Feedbacks and suggestions are taken from them for knowing effectiveness of
Brussels and Brugges tour package (Kim and Kang, 2015).
Timescale:
Activity/
Timescale
1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month
Market
Research
Planning and
Scheduling
Forecasting
and Costing
tour package
Financial
Evaluation and
Pricing
Marketing
Operation and
Execution of
Tour
Post Tour
management
2.2 Different methods of contracting
Contracting refers to entering of two or more individuals or parties under an agreement or
common decision. Contracting is done to avail products or services on agreed value or price.
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 Commitment contract: Commitment contract are signed at time of making agreement.
(Backer and King, eds., 2015). Based on previous experiences and market researches,
Trailfinders purchases services that are strictly linked to demand of customer's
expectations. The risk of inclusive unsold tour packages is been supported by tour
operators, due to which agreeable discounts can be obtained from suppliers. Old
destination for holidays are been mentioned through commitment contracts because of
this reason. This contract is usually used by big operators for traditional destinations and
charter flights on high demand market.
 Allotment contract: This contract has been made at the time of negotiation on expected
price. Risk related to unsold products are reduced, as there are no conditions that binds
tour operators to purchase services (Robinson, Fallon and Crotts, eds., 2016). Trailfinders
books specific number of hotel rooms or facilities, that can be used at given date, before
few days from arrival of tourists. This contracting is used to increase demand of
customers in non-seasons. Tourists can be benefited from this as they can get tour
packages for low price.
 Time series Charter: It's a contracting with aviation services for dedicated chartered
aircraft for operating inclusive tour packages for tour operators. Full range of flight
services are been availed for entire seasons for accommodating extra capacity without
considering how high the demand is.
These contracts are suitable for providing different components of holiday to their
customers. Using commitment contracting tour operators suggests old destinations to tourists.
Travellers can get discounted prices for their transportation and accommodation.
Allotment contracting helps travellers to get packages at low prices, as they negotiate
with tour operators and fix a price according to their expectations. Operators books hotels or
rooms even before tourists arrives.
When demand for travel are high operators' comes in contracting with flights services for
dedicated charter aviation services throughout the season. Which benefit them to avail aircraft, at
low prices.
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2.3 Estimated selling price
Trailfinders Tours
S.no. Particulars Cost per
person
Total Amount
(for 42 students)
Rooms at Grand Casselbergh in Bruges 92 Euros 3,864 Euros
Local tour guide's charge 8,232 Euros *
Visitor attractions fee 52 Euros 2,184 Euros
Luxury Coach: 45-Seater (other charges and taxes
included)
Total cost 15,300 Euros
Add: Profit @ 25% 3,825 Euros
Sales Price 19,125 Euros
*Rates of Spot exchange is 1.12 Euros per 1 Pound (7,350 Pounds’ X 1.12 = 8,232 Euros)
LO3 BROCHURES AND DISTRIBUTION METHODS
3.1 Decisions regarding brochure's design
Brochures are an effective tool for marketing business and their products or services.
They are used for highlighting benefits, products or services of a company to their customers
(Kerzner and Kerzner, 2017). Through using brochures, Trailfinders market or advertise their
holiday or tour packages for attracting tourists or travellers. They provide various details
regarding different destinations or tour packages.
Following are some planning decisions for designing an effective brochure:
 Establish purpose: Trailfinders define the purpose of designing a brochure. It final
audience are determined, what are its need, etc. It helps to have a goal or objective for
brochure.
 Define elements and contents: Tour operator plans for various elements and contents
they want to convey in brochure. Appropriate and meaningful contents are to be used
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(Cetin and Yarcan, 2017). After content is been designed or gathered, a proper structure
or style is been given or designed for making its contents look attractive. For example, if
the product is of luxury, targeted for high range persons and have a huge budget, then its
contents and structures must be appropriate and attractive.
 Plan brochure: Company's existing personality must be reflected through brochure,
instead of making it look pretty. It must be planned in such manner that it reflects
Trailfinders' ideals and communicate effectively.
 Budget determining: For designing more effective and attractive brochure, budgets are
made. Higher budget set would result in better and effective brochure design.
 Choose right paper: After designing brochure, it is proofed and approved before
printing. It has influence on customer by the paper in which brochure is printed. There
are different options for paper choice such as, soft touch, uncoated, matte finished or high
gloss, etc (Holland and Leslie, 2018).
 Delivery: After printing process is finished it is decided how the brochures are delivered
to its final users. It can be delivered through mail or can be hand delivered.
3.2 Alternatives to traditional brochures
Apart from traditional brochures, tour operators focus on promotion of their products and
services through adopting different ways of communicating and marketing their business to their
customers.
Below listed are some alternatives to traditional brochures:
 E-Brochures: These are online form of traditional brochures, which can be sent to wider
audience with other additional functionalities. It's a go green approach and saves paper
and money on printing (Medlik, 2016).
 Websites: Sites of tour operators can also act as an alternative for traditional brochure. It
provides with enough information required with appropriate contents. They are accessible
at any time and are cost effective.
 Print media: It includes like newspapers and magazines can be used to promote and
advertise their tour packages to a wider audience. They are the cheapest and effective
method of marketing products and services offered by tour operators (Deresky, 2017).
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 Television: It can be an attractive form of promoting and advertising tour or holiday
packages. Creative visuals or videos are used to attract different travellers. Celebrities are
also used for promoting various tour products. Social media: This have become one of the most effective mediums for marketing and
advertising of business and their products or services. Various platforms such as
Facebook, Twitter, Instagram, etc can be used to maintain a relationship with travellers or
clients (Long and Shi, 2017).
For selling luxury holiday packages, Trailfinders can use E brochures, websites or
magazines as the most effective as high end customers can be focused through these mediums
for selling of luxury tours. They prefer these for getting information about tour packages instead
of using traditional brochures. They have a wider reach to audiences and more attractive than
traditional brochures. They are more effective and saves a lot of costs. Using websites or social
media they can track their customers and can have interaction with them.
3.3 Methods of distribution
Below given are some of the distribution methods for holiday packages:
 Direct Sell: They can use direct sell distribution method for dealing or selling of tour
packages. This method can be used by domestic and also by out bound tour operators.
Using this, travellers or tourist directly visits operators’ office for booking facilities (Kim
and Kang, 2015). Trailfinders can use this distribution method for providing tour
facilities to home country's travellers.
 Agencies: Through different agencies company's tours or activities are listed with them.
They promote tour operators’ business in a good light. They sell and administers tour
packages of different tour operators (Kim and Kang, 2015).
 Call Centres: Using call centres, tour operators try to distribute their tour packages by
promoting it with help of telephonic conversation. Segmented customers are called for
selling holiday packages to them.
 Internet: Internet have enabled to access various product or service through mails or
websites of different tour operators. With online usage, tour operators can offer different
tours or holiday packages to their clients (Backer and King, 2015). Customers are able to
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avail those products or services, conveniently and with ease, by just sitting comfortably at
home. By websites and emails, Trailfinders have sustained their clients and effectively
distribute their tours.
The most recommended and appropriate method of distribution Trailfinders have been
using direct sales method and internet. As they are effective methods for distributing tour
packages to customers or travellers. Internet can be the most appropriate for distributing various
packages and customers can choose according to their desire or budget and on other basis.
LO4 STRATEGIC AND TACTICAL DECISION MAKING
4.1 Tour operators' strategic decisions
Strategic decision making in an organisation is important in an uncertain and dynamic
environment. This can help a manager to take systematic and effective decisions by considering
external environment, minimising weaknesses through focusing on their strengths and by
identifying this can have a competitive advantage (Robinson, Fallon and Crotts, 2016). Various
strategic decisions are made by Trailfinders, regarding their tour packages and operations.
Comparison between two different tour operators' strategic decisions of Thomas Cook and
Trailfinders are follows:
BASIS THOMAS COOK TRAILFINDERS
Choice of Product Multiple choices of product
are offered to customers on the
basis of their budgets,
destinations, packages, etc. as
per tourists interest.
Various options to travelers are
offered to choose from
different packages already
designed by operators.
Positioning and Branding Different medium of
promotion and distributions
are used.
Use of brochures, websites or
social media.
Pricing Strategy Disguised pricing strategy is
been adopted by Thomas Cook
Visible pricing strategy are
been used by Trailfinders
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Decision regarding
distribution
Direct distribution through
websites, client referral, etc.
Direct and indirect distribution
through online, travel agency,
etc.
Surcharge policies There are some surcharges,
which tourist have fewer
objections.
No or less hidden surcharges,
every charges are shown to
customers.
4.2 Tactical decisions taken by Tour operators
Tactical decisions are decisions that are taken by management of tour operators for
effective operations in a short term. One of the main objectives of this are effective utilization of
resources for achieving various organisational goals (Kerzner and Kerzner, 2017).
Following are various Tactical decisions taken by Trailfinders:
Factors Decision
Price wars Various factors that affects prices of tour packages such as
competitors pricing policies, etc. are evaluated for making tactical
decisions regarding price decisions. Trailfinders makes tactical
decisions for pricing of their products to sustain their position in
market.
Competitions Through appropriate market researches and study, for
determining competition level in market and competitors’
strategies for taking counter actions to survive and sustain their
business (Cetin and Yarcan, 2017).
Tactical marketing Trailfinders regularly makes changes in their existing marketing
plans or policies for increasing their sales of their products or tour
packages. Tactical decisions are made after studying and
observing marketing or promotional strategies and their effects.
Yield management Various aspects that impacts on profit yielding of the tour
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operator are identified and tactical decisions, such as re-
investment, etc. are been made (Holland and Leslie, 2018).
Tactical decisions are made regarding other factors also which would affect the tour operators
such as fuel price of transportation or flights, growth or decline of economy, fluctuations in
exchange rates, environmental issues, etc.
CONCLUSION
From the above report, it can be concluded that tour operators play an important role in
travel and tourism industry. There are various trends that have emerged in travel sector such as
use of technology like internet, etc., help them to sustain and earn higher profits. There are
different stages involved in for planning a holiday. Such as Research, Planning, forcasting,
budgeting, etc. For effective promotion or advertisement of their products or packages, brochures
are designed properly and with appropriate or attractive contents. There are various distribution
methods such as websites, direct sale, agency, etc used by tour operators. Appropriate method is
to be selected by tour operators for better promotions and effective distribution of their products.
Further strategical and tactical decisions are made by company to attain competitive advantages.
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REFERENCES
Books and Journals
Backer, E. and King, B. eds., 2015. VFR travel research: international perspectives (Vol. 69).
Channel View Publications.
Cetin, G. and Yarcan, S., 2017. The professional relationship between tour guides and tour
operators. Scandinavian Journal of Hospitality and Tourism, 17(4), pp.345-357.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Holland, J. and Leslie, D., 2018. Tour operators and key travel regulations (with David
Grant). Tour operators and operations: development, management and responsibility,
pp.146-165.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Kim, K.H. and Kang, S.J., 2015. A Qualitative Study on Responsible Tour Operators' Perception
and Operation Status. Journal of Agricultural Extension & Community
Development, 22(1), pp.15-24.
Long, Y. and Shi, P., 2017. Pricing strategies of tour operator and online travel agency based on
cooperation to achieve O2O model. Tourism Management, 62, pp.302-311.
Medlik, S. ed., 2016. Managing tourism. Elsevier.
Robinson, P., Fallon, P., Cameron, H. and Crotts, J.C., 2016. Operations management in the
travel industry. CABI.
Online
Association of British Travel Agents, 2017. [Online]. Available through:
<https://www.justsardinia.co.uk/pages/travel-associations/>
Package holidays, 2016. [Online]. Available through:
<https://www.independent.co.uk/travel/europe/the-complete-guide-to-package-holidays-
561863.html>
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