Tour Operations Management Report

This report delves into the dynamics of tour operations management, focusing on the TUI group. It covers various aspects such as market trends, package development, pricing strategies, and the impact of technological advancements on the tourism industry. The analysis includes a detailed examination of consumer preferences, the importance of market research, and the strategic decisions necessary for successful tour package offerings. Additionally, it highlights the significance of adapting to changing travel trends and the role of effective marketing strategies in enhancing customer satisfaction.

The Tour Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1................................................................................................................................................3
1.2................................................................................................................................................4
1.3................................................................................................................................................5
TASK 2............................................................................................................................................7
2.1................................................................................................................................................7
2.2................................................................................................................................................8
2.3................................................................................................................................................8
TASK 3...........................................................................................................................................9
3.1................................................................................................................................................9
.......................................................................................................................................................10
3.2..............................................................................................................................................11
3.3..............................................................................................................................................12
TASK 4..........................................................................................................................................13
4.1..............................................................................................................................................13
4.2..............................................................................................................................................14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The tour and travel sector has been gone through a numerous technological developments
and discoveries which has resulted in improvements and enhancements in the services and
qualities of the companies (Küsel and Ras, 2010). The technological advancements and the
globalisation and modernisation has played many crucial roles in the success and growth of the
tourism sector. The traditional concept of tourism has converted and has changed into modern
tourism, it has been broadly defined and segmented in many sub-sections such as hospitality,
leisure, adventure etc. A tour operator is one who organizes package by combining different
elements and factors of a tourism experience at a pre-determined price. The present scenario is
based on the study carried out on the TUI group which is a well known name in the sector of tour
operators. The below presented report analyses the different trends which are important for the
tour operator company in decision making process for production and selling purpose and also
the impacts of the trends and developments on the tour operations industry (Negi, 2004).
TASK 1
1.1
As a tour operator TUI, should give notice relating travel trends every day. Maybe the
company is welcoming more young travellers, British tourists, or foodies on the tours at the
moment. However, this will be proven beneficial to be prepared for the future travel trends.
Some of the trends experienced by the travel and tourism industry a previously unknown location
becomes a must-see destination or a certain type of trip becomes incredibly popular. While some
trends stick around from previous years, others seem to come from nowhere, reaching critical
mass in no time. The below mentioned are some of the trends of travel and tourism worth
knowing about, as well as how to adapt the tours or activities to take advantage of them:-
Travellers wanting to unplug.
A trend has emerged in which the travellers or the tourists wants to unplug and feel
completely relaxed and away from the work and want to be on a holiday and the shift from the
“always on” traveller has begun (Gow, 2005). A very high proportion travellers from UK has
switched off in 2013 which has increased more in the upcoming time, and will be in continuity
2016.

However, this needs to be on a traveller’s own terms. Due to modernisation there hace
been many factors which are essential for te travellers such as Wi-Fi remains a key requirement
for many tourists, which creates a difficult balance to strike for hoteliers and destinations. Some
remote hotels use their lack of Wi-Fi as a selling point and this can be proven as a negative point
for the hoteliers. If someone really wants to have a digital detox, it's preferable to completely
remove all temptations, after all.
Crowd sourcing luxury hotels
Crowd sourcing has emerged as an option for financing he luxury hotel segment has been
increasingly turning away from the sources which has been used by the traditional construction
of hotels such as banks and investments. With a potentially long lead time on funding, individual
luxury hotels with unique features are finding that appealing directly to the people interested in
what they have to offer enables them to secure financing that might be denied by more traditional
routes. By the help of the concept of crowdfunding, the interested travellers and individuals will
be able to make their investments in different hotel concepts and also in the development of these
new properties (Bhatia, 2012).
Discovering untouched and unique places
Tourists are always in search of and looking for opportunities to explore the places and
destinations which are lesser-known, especially those that are untouched or unique.
 Cross something off your bucket list
 Create unforgettable memories
 Push the boundaries of your comfort zone
 Enjoy closer-to-home experiences
 Discover untouched, unique places
Adventure tourism: It is essential for the cited business organization is that to conduct market
research so that they can know the latest trends in this sector. In the present time, adventure
tourism played a prominent role in the success for the company. Because there are large number
of young generation wants to go for such places where they can feel better. In this way they
require to make their tourism products according to the youth which can leads to increase their
sales and profitability. For example, there are various adventure tourism places such as cycling,
river rafting jungle safari which can help to attract large number of customers.

Sports tourism: This is another trend which can be used by the cited business organization. There
are variety of sports such as football, cricket, and other sports which having large number of
viewers. There are various sports event are conducting each and every year such as Olympics,
football world cups etc. which can be used by the TUI group as the opportunity and make their
products accordingly.
Environmental tourism: This is one of the growing trend in the tour and travel industry. There
are large number of visitor who like such visit which is a good opportunity for the company. In
the context of given case study, they required that to make their tourism products and identify
those places which can help to attract such visitors in an appropriate manner.
1.2
The travel and tourism industry is getting affected by the daily changing trends and
factors for instance, booking on the internet, teletext and phoning call centre's to book their
holidays and also growth and expansion in UK regional airports and more people travelling alone
on holiday for example, visiting relatives (Xiao and Smith, 2007). The below is the explanation
of these trends and factors :-
Greater flexibility of booking –internet, teletext, call centres.
` The key areas such as internet, teletext and call centres are changing people’s everyday
lives and TUI should also consider the development of their own mobile offerings and to alter
the holiday offerings to different types of groups of travellers and families. By making the use of
the internet, teletext and through call centres bookings can be made possible in your own time
24hours a day, this is a more easier and quicker means of accessing the tours and travel packages
, and also a lot cheaper than if you was to book in a travel agents. As more and more people are
using the internet rather than going into travel agents in which travel agents will be losing money
and this would affect the travel and tourism industry in the future and they most probably won’t
be a lot of travel agents around (Papatheodorou, 2006).
Growth and expansion of regional airports
As little airports start off with very low prices, the growth of regional airports in the UK
has increased. For instance, to land the aircraft and for it to be parked up on the tarmac, and with
low prices airlines are more likely to use these such as easy jet as its a low cost airline this helps
the airport expand as more and more people would choose to fly from there. In Manchester
airport per day around 850 planes land and take-off which are probably mostly charter flights

which take-off on a certain day at a certain time every day or week. this will affect the travel
industry as more and more people are taking flights as there a more airports for example if there
was not an airport in Manchester fewer people would travel as they don’t want to travel far to
regional airports. With the expansion of airports more planes can land as there’s more space so
that gives us more opportunities and gives people better services as the airports have grown.
In today's world large number or people go and visit places as per their own interest. sports,
adventure and environment tourism are the most attainable tourism because number of people
attract towards these tourism. Tourism agencies are provide services as per the interest of the
customers the provide sports tourism to those who are very much attracted towards them they
provide sports tickets and promote games just to make more profit because it is also beneficial
for the country. And they provide adventure trip for the youth who love to do adventures things
and increase their profit by this and companies profit is beneficial for country also. Some
organisation provide environment tourism just to make awareness among people about the
environment the people who are interested towards the environment are attracted and the
agencies provide best environmental view for them just to create interest by this the number of
customers are attracted towards the organisation and it will help to increase the profit level of the
industry.
1.3
The following are the types of packages which the TUI group needs to develop for
offering the services to the travellers:-
 Independent tour: This concept is a package which is prepared for an individual. A
tourists is free and independent in this type of tour package to select any particulars for
the journey. TUI will put the components of the Tour together, working directly with the
vendors airlines, hotels, cruise lines, transport operators and others. The vendors usually
quote a net figure to the travel agency and allow him to mark up the price, so that it can
cover his time and expenses. In independent tour, the suppliers quote the rack rate for
individual reservation. Thus, an independent tour may be a package of transportation and
ground arrangements specifically tailored to the individual’s preferences and not
advertised in a tour brochure (Obenour, Patterson, Pedersen and Pearson, 2006).

 Escorted tour: This type of tour package can also be known as Conducted Tour. A tour
escort is provided from the starting point back to the point of return to accompany the
tour members. On behalf of main tour operator this types of tour is generally arranged by
ground operators. Some tours will have both a local escort and a professional escort
sharing the responsibilities involved throughout the entire journey. In many cases tour
operators use the services of a different escort/tour leader according to nature of each
destination visited. Receiving tour members at the airport, assist them through custom
clearance and other formalities and then perform the same duties at the time of their
departure are the principal duties of tour escorts. The tour escort is also responsible for
providing other facilities during their stay at a particular destination. Due to step by step
guiding and escorting, these tours are also referred as ‘Hosted Tours’. Professionally,
escorted tours are planned/organized for the first-time travellers (Benckendorff and
Moscardo, 2010).
 Business tours: The nature of business tour is significantly different in many ways from
that of other tour packages i.e. holiday. However, the pleasure element can not be
separated from the business tours. Because business persons travel for a variety of
reasons destinations are not chosen by them but predetermined and more often attractions
are added to make business tours more effective and attractive. Conference Package and
Special Events Package are the two forms of business tours have received a special
attention from the tour operators. Organization of business tours has become a profitable
venture for many tour operators. Venues for business meetings/conferences,
accommodation, transportation, secretarial services, conference equipments, local
sightseeing and other facilities are the wide range of activities. More recently, incentive
tours, and special interest tours have appeared in the shape of incentive travel at the tour
operation market. The incentive tours, one of the largest and growing segment, offered by
a business organization to its employees and their spouses as reward for some special
endeavour or as a spur to achievement. These packages have been found to have greater
motivating power than cash reward and other incentives given 10 the employees. Special
interest tour is another form of tour package, which is also gaining weight in the tour
operator industry (Rego, Gamboa, Glover, and Osterman, 2011). These tours are

designed and arranged for those interested in eco tourism, farm tourism, ethnic studies,
safaris, skiing, beaches, adventures, deserts, cultural events, and pilgrimage etc.
Travel and tourism sector is one of the attractive industry which can increase the competition
level in the United Kingdom market which can leads to reducing the market share and
profitability of the cited company. In order to maintain their sales revenue, they required to
make their products attractive which can help to fulfil their customer needs. For this TUI
group can conduct market research so that they can know their changing needs of its
customer. The most important thing is that they are required to use customization for their
customers. For example, they can offer them a package which can satisfy their needs in an
effective manner. Apart from that they can also use such pricing strategies which can provide
competitive advantage in the market.
TASK 2
2.1
When we are operating a tour operating company it is important that we are develop a
tour development stages. In this stage we identifying are tour destination, target market, tour
package, communicating with our dealer etc. there are following stages for developing a tour
package:
Research: In the tour developing stage research of the destination and market is most
important think. In the destination research first we identifying potential tourists, their budget,
their destination, accommodation and other services. Target market is another important think
where we try to meet the need of the customers, and also try to approach similar destination.
Planning: This is played a vital role in the tour development. If the planning is effective
so that tour development will successful. In this stage TUI can planned all things relating to a
tour. For example we negotiate our vendors and hotels in advance and make a contract with
them. Because in peak time services can not available. At the time of tour development it is
important for TUI that they have substitute plan if the current plan may failed (Xiao, 2006).
Make a budget: Financial planning is also important for any tour operating company. In this
stage there are two things which is too important first is costing of the package tour of the
company. In this stage we make a tour package considering all cost which are involving in a tour
package. Cost involving in a tour package are travelling cost, accommodation cost, food cost,

research cost, advertising cost etc. There are various financial risks are involved in a tour
package like exchange risk, credit risk and other risks. For making a risk free tour package for
tour operator company they considered all risks and make ideal tour package for the customers.
Marketing of a tour package: Marketing of a tour package is also an important task for
the company (Bethapudi, 2013). The manager of TUI making their all marketing strategies
should be focused on target customers. In the marketing strategies the tour product is played a
vital role. Tour product or package should be designed according to the customer requirements.
In a package tour or product the services which is essential should be effective and attractive.
Services like hotels, transportation and destination should be attractive. In the marketing
strategies which is used for advertising truism booklets of the company should be attractive and
try to make all information regarding a tour package.
Tour Boucher planning process:
Stages Description Time scale
Resea
rch
This is the first stage which is related with the conducting
market research for the proposed tourism package development.
It is essential for the cited business organization is to analyses
their external and internal environmental which can help to
overcome the proposed risk which is associated with the tour
package. Apart from that they also required that to identify the
changing needs of the customers so that they can design their
products accordingly. For example, there are various customers
which required customization in the tour package which can
help to increase sales and profitability of the business unit.
3 Months
Negoti
ations
This is next stage in the tour and travel development where the
cited company is required to negotiate with different parties and
suppliers which played a prominent role in the travel and
tourism industry. These suppliers such as air line companies,
lodging business units, transport agencies, car and vehicle
operators and others. The manager of the business entity has an
option to negotiate with the air transporters so that they can
1 Month

make their plan and save the price which is related terms and
conditions.
Costin
g of
tour
packa
ge
The concept of “tour cost” is the focal to understanding the tour
management which can help to analysing the monetary value of
a tour package. The manager of the cited business organization
is to make their proposed budget by using various tools and
techniques which can help to make their tour successful.
1.5 months
Broch
ures
design
ing
Marketing having a great significant for each and every business
organization. In the context of the given case study, TUI group
required that to use marketing tools is its tour brochure which
provide the comprehensive information which can help to
motivate its potential customers. It present the product and
provide the idea of total tourism product. The brochures helps to
create the expectation of quality, value for money, product and
service image, and firm status. It also contains the variety of
information such as transport mode, destination details, travel
time frame, duration of tour, types of accommodation etc. For
example, TUI group can make their brochures in an appropriate
manner which can help to attract large number of customers so
that they can attain their desired goals and objectives.
15 days
Opera
tion
and
Execu
tion
This is the final stage of the tour planning process where the
business unit is required to implement their tour development
plan and execute by using various tools and techniques in an
effective manner. For example, they can make marketing
strategies for their proposed tourism products which can help to
provide competitive advantage.
2 Months

2.2
Different methods of contract for individual components of a holiday package:
There are two types of components are involved in the contracting. First is the contract
between tour operator and the vendor. A vendor is a service provider for the company. There are
two types of contracts which is used in tour package design (Jaafar and Maideen, 2012).
Fixed contracts: A contract which is commonly used in the tour package. In this contract
the vendor is charged accordance with the volume of the customers. The reason for this kind of
contract that is vendors try to cover up off-seasonal sale and wants to increase their revenues.
There is some risk involved in it. Because the tour company have to pay the amount according to
the contract but sometimes if customers is not that much company may faces loss. In the fixed
contract package tour highly discounted and company try to make high number of customer.
Advance booking facilities can provided to the customer.
Sale only contracts: In tour operation sale of the products is depends of the session. In
UK truism peak time is in summer. So that in winter there is off-season. n this kind contract are
made for off-seasonal time for the company. According to this contract the company have no
concern over the volume of customer. Theses kind of contract are made according to the
potential customer needs (Crick, 2011). Theses kind of contracts are competitively high. These
types of contracts are made for target customers.
Second is the contract between the company and the customers. There are following
contracts which is commonly used in tour operating company. In this contract the company
should be disclosed of all information regarding the tour package. It involves the destination with
descriptions, price, payment condition, health and safety issues, food, duration of the tour (Day
and Night), transportation information, terms and condition regarding the tours, facilities
provided to the customer like special services for senior citizens and also repayment conditions if
the tour will be cancelled.
 Supplier group contract: This contract is refers to already decided requirements by the
customers or visitors to the company. According to the requirements have to provide all
facilities and services to visitors in the systematic manner. TUI hotel's supplier and
customers between make a contract according to that contra suppliers are responsible for
full fill requirements of customers and provide them better facilities and services to them
if they will not get that much satisfaction towards their services and facilities so visitors

are legally able to sue against suppliers. In the other hand, according to this contract
suppliers are liable to provide better and have to full fill visitors requirements in the
systematic manner.
 Client group contract: Client group contract is refers to sometimes company is not able to
provide services those are wants by the visitors because some facilities and services are
already sold to other visitors. This kind of agreements are help to provide better services
and advanced booking services to all visitors in which visitors have right to book services
and facilities by the company. TUI Hotel through provide various services like room,
cabins, places and so more all these are sometimes booked by the visitors so company is
not legally able to break contract for other visitors.
 Meeting and incentive group contract: This kind of contract refers to agency or company
and visitors between already mention all detail and information about their services and
facilities those are provide to the customers or visitors so in the meeting provide all kind
of informations to all visitors if they are not working according to the meeting so they
legally able to sue case against company. TUI hotel in before made the contract conduct
meeting between visitors and company's employees. In this contact employees are liable
to work according to the provide information and rules for visitors and should try to
provide better satisfaction to them.
2.3
Selling price of a package holiday:
As we know that pricing of the product is too important for any company. It should be
realistic and incurred all cost and profit margins. There are various cost involved in a package
tour like transportation cost (Flight charges and Cab charges), accommodation (Hotel rent and
Food), cost of side scene and other cost. These cost can be fixed and variable in nature.
Transportation cost: In a holiday package there are various cost involved in it.
Transpiration cost is one of them. There are various type of transportation cost involved like
flight/bus/train fare, cab charges from hotel to side scene etc. (Knowles, Teixeira, and Egan,
2003).
Accommodation cost: Another cost involved in a holiday package is accommodation
charges. In accommodation involves cost like hotel rent, phone bills, food and meals charges etc.