Tourism Operations Management: A Study of Contemporary Issues and Challenges

This book is about probability and random processes

TOUR OPERATION
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
TASK 1............................................................................................................................................2
1.1 Analyzing the recent trends in the tour operation industry..............................................2
TASK 2............................................................................................................................................4
2.1 Assessing the time scale and stages involve in development of holiday.........................4
2.2 Evaluating the suitability of different methods of contacting..........................................5
2.3 Calculating the selling price of the Educational tour package.........................................7
TASK 3............................................................................................................................................7
3.1 Evaluating the planning decision to be taken for the designing of selected brochure.....7
3.2 Assessing the suitability of alternatives to the traditional brochure.................................8
3.3 Evaluating the suitability of different methods of distribution........................................9
TASK 4..........................................................................................................................................10
4.1 Evaluating the strategic decisions made by different tour operator...............................10
4.2 Comparing the tactical decision that could be taken by Thomas Cook in different type of
situation................................................................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

ILLUSTRATION INDEX
Illustration 1: Mass production to customization.............................................................................2
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INTRODUCTION
Tour operation management is a concept in which tour and travel operation is combined
in a manner due to which an effective holiday package is being prepared by the manager of
organization (Tour operation management, 2016). In other words, it can be said that travelling
consists of all the activities in which a holiday plan is formulated by the firm. In present
scenario, the given activity has gained major importance. This is because, nowadays customers
have become more selective when it comes to choose the place for leisure purpose. Thus, for the
travel and tourism firm it is necessary that they must design their tour operation in an effective
manner, so that satisfaction of buyers can be maintained.
The given report is based upon different type of case scenario. The report will give
detailed explanation regarding the stages which cited firm can adopt with an aim to develop a
holiday package for the buyers.
TASK 1
1.1 Analysing the recent trends in the tour operation industry
There are varied type of developments occurring in the tourism industry. The given
developments are affecting the operation of existing firms like Thomas Cook which has built its
distinct image in the market. In this regard, the major trends which have occurred within the
given industry is related to changing holiday package formation.
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In accordance with the given context, it is assessed that in earlier times manager of an
organization does not give any importance to the specific needs and demands of the customers.
As a result of it, they tend to produce those holiday packages which helps them in achieving the
economies of scale through their services but, this has been changed over the period of time. This
is because, nowadays there is an interactive agreements between both the firm and the customers.
Here, the present manager of Thomas Cook is giving importance to the needs and the demands
of their respective buyers while forming a holiday tour package for them (Jayawardena, 2013).
Thus, it can be said that the recent development of mass market tourism to customization have
changed whole process of delivering the services to the buyers.
In addition to this, a recent development has been seen in the range of services and
products offered. Here, during the mass production scenario, manager of firm does not offer
much variety of products to its buyers. But, in today's scenario the given thing have changed
totally. This is because, the manager of Thomas Cook has to offer range of products and services
to the buyers in order to give them more option for selection. However, if the proper and
required set of products are not offered by the firm at that time then it became very difficult for
the cited firm with regard to build the different image of its brand in market in an effectual way
(Connell, 2013).
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Illustration 1: Mass production to customization
(Source: Lam and et.al., 2014)

Furthermore, significant developments are also seen in the variety of tourism. In this
context, there are many types of tourism identified which are in trends with the present scenario.
It consists of responsible tourism and cruise market tourism etc. Here, responsible tourism is the
type of tourism practice wherein all stakeholders are associated with the travel and tourism
industry. They take the action to reduce the impact of travelling activity of tourist upon the
natural environment of country. Such type of practice forces the firm like Thomas Cook to
involve this type of tourism in its existing travelling packages. This is because, if it is not
involved in the product then the sales and profitability related condition of company will be
impacted in a negative way (Lin and et.al, 2012).
The emergence of e-commerce type of facilities have also affected the service delivery
process of Thomas Cook. Here, earlier the tour operators have to invest a lot of time in the
process of explaining the products and services being offered by the enterprises to the buyers.
However, due to the availability of e-commerce type of facilities, the whole scenario of
delivering the services to the buyers have changed significantly. For example, at present buyer
can take the information about the respective tour package on internet from their home. In
addition to this, buyer can also look the pictures and the videos of any place they would like to
go or travel. Thus, it can be considered as one of the most attractive means which have played a
very important role in terms of attracting the large number of buyers towards the services of
Thomas Cook. Due to this, overall effect is being incurred by cited firm in the form of increased
profits and sales.
TASK 2
2.1 Assessing the time scale and stages involve in development of holiday
The students of HND TTM are planning to spend their summer holidays in Europe. In
this regard, an educational tour package is being produced for the respective students. However,
with an aim to produce this education package, manager of Thomas Cook must develop such
holiday package for its buyers which satisfies the actual needs and the demands of its customers
in an effective manner. The detailed explanation about the same are depicted below: Market research: The process for the development of holiday package begins with the
market research. In this step, the Thomas Cook manager will perform the detailed
analysis of the country where they are arranging an educational tour for the HND TTM
students. In this section, the firm will collect the information about number of other
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factors (Pawitra, 2003). For example, number of budgeted hotels in Europe, name of
different famous educational destinations in Europe and information will be collected
about the conditions which have being prevailing in country. Here, in order to collect all
such information, manager of cited firm will take help from different marketing research
tools and techniques (Techniques of conducting market research, 2016). Thus, with an
aim to complete all the research related work will be needed by manager. Planning and scheduling: After conducting the market research, in the given step
manager of Thomas Cook will prepare detailed plan regarding the educational tour which
it is organising for the students. Here, in the given section manager of Thomas Cook will
take decision about number of activities which are associated with the given tour. For
example, here manager will make the decision about the different type of transportation
medium which is being used by the firm. The decision with respect to the same will
totally depend number of travellers who are coming in give tour. In addition to this, it is
this section only road map of whole holiday plan will be prepared (Lumsdon, 2010).
Moreover, the scheduling work related to the time at which the students will depart from
the respective place will also be taken into consideration in the given section only. Thus,
in order to do all the given task 5 month time will be needed by Thomas Cook manager. Forecasting: After gathering all the essential information about the respective tour, here
in this part manager will perform forecasting related activity in which it will forecast the
overall cost of the educational tour package. Here, on the basis of given cost only
appropriate prices will be set by the Thomas Cook for the tour. For this activity, 2 month
time is sufficient (Moutinho, 2011).
 Contracting: Finally, in the last step Thomas Cook will make contact with different
suppliers who operate in Europe. In this regard, firm will make contract with hotel and
airline companies. Thus, an agreement will be signed between both Thomas Cook and its
selected supplier. Here, for the given activity around 1 month time will be require
(Potgieter, de Jager and van Heerden, 2012).
2.2 Evaluating the suitability of different methods of contacting
The suitability of varied methods of contracting is being evaluated for the different
components of holiday as well as the type of tour operator. In accordance with the given context,
there are two basic type of contacting methods identified. It comprises sale only and fixed
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contract. The benefits of such contract can be gained by tour operators such as Flight centres and
Airtours. However, the in-depth explanation about the same is depicted in below: Sale only contract: The tour operator such as Flight centres uses this contract for
developing or designing the holiday package for the respective customers. With the help
of this contract, the buyers who belong to the upper or middle income range can be
targeted by the corporation in an effective manner (Tricoire, Graf and Gutjahr, 2012). The
main reason behind selecting the given target base is to recover the expenditure which is
being incurred by the firm. In addition to this, “sale only contract” will provide benefit to
the enterprise with regard to charge or set the high prices upon the products and services
which is being formulated by them for the buyers. The benefit of given form of contract
occur during the lean season. It is the season in which the service which is being given by
the enterprise is not that much in demand. Thus, by using the given contract cited firm
can reduce the risk of weak response of the buyers with regard to the framed holiday
package (You, 2012).
 Fixed only contract: It is being consider as another way of contracting which manager of
Thomas Cook can use (Fixed only contract, 2016). The need of forming such contract
arises when manager of firm will have to make the volume based capacity decision. This
contract will prove as beneficial during the seasonal period when the services of travel
and tourism companies are highly in demand. Thus, due to this method the corporation
will get the advantage in the form of increased profits and sales in an effectual way. The
company such as Airtours uses the given form of contract. For example, Airtours has
come into contract with some transportation firm in which it has made the commitment
that it will book total capacity of transportation services. But, it will make payment of
utilized seats only. Here, the risk of non-utilization of capacity is being incur by the tour
operator such as Airtours. Thus, for the tour operator it is necessary that it must consider
the given thing while designing its holiday tour package. This is because, through pre
planning only cited firm can reduce its chances of incurring the loss due to the non-
utilization of capacity in an effective manner (Naji-Azimi and et.al., 2012). However,
with the help of this contract mean benefit can be gained by the firm in the form of giving
discounts to the firm.
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2.3 Calculating the selling price of the Educational tour package
Following table will depict about the selling price of the respective holiday. This is
prepared on the basis of given case scenario:
Services Selling price for per
student
(in £)
Selling price for per Adult Guest
with 40% extra charges
(in £)
Ticket for airline 170 238
Price for the hotel services 60 84
Dinner and breakfast 30 42
Surface transportation 30 42
Fare to get entry in different
tourist destination of London
40 56
TOTAL 330 462
TASK 3
3.1 Evaluating the planning decision to be taken for the designing of selected brochure
Brochure can be consider as small book which has pictures and information about the
products and services which have being offered by the firm (Meaning of Brochure, 2016). For
the firms which are associated with the travel and tourism industry, the brochure plays a very
significant role. It is due to the fact that the given document, helps the firm with regard to attract
the large number of buyers towards the corporation in an effectual manner. Thus, it helps in
influencing the purchasing behaviour of the buyers (Law and Xiang, 2013).
Hence, it raises the firm probability of attaining the sales and profits from different type
of tour packages which is being designed by them. In accordance with the given context,
different elements of brochure are assessed which the manager of Thomas Cook should consider
while making the decision about designing the brochure for the educational tour. The explanation
about the elements are depicted below:
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 Format of brochure: It can be referred as the first the element of brochure which manager
of cited firm must consider. It involves varied aspect such as colour to be used, pictures
to be added and font size of different information or content etc. Here, for the manager it
is essential that it must always use eye caching colours and pictures in the brochure.
Thus, with respect to educational tour package it is being required by the manager of
Thomas Cook that it must use lively and vibrant colours. With this, teacher will be able to
influence the students towards the respective course. As a result of it significant
increment in the demand, Thomas Cook services will be carried out. In addition to this, it
is also required by the company manager to use relevant pictures in its brochure. For
example, with respect to the educational tour firm must involve picture of some famous
educational destination of Europe (Barker, 2014). In addition to this, the brochure must
proceed in a sequential format. For instance, it should give information about the
different educational tourist destination. Thus, in the second page information about
different hotels must be given where the customers would stay. Finally, in the last phase
overall prices of the respective package must be written. On considering all these points
in mind an effective brochure will be designed by the manager of Thomas Cook. Budget and target market: For the given tour the targeted customers are the students who
do not have much purchasing capacity. Thus, for Thomas Cook, it is essential that they
should set low prices for the educational tour package. Moreover, by adopting the given
tactic only large number of buyers can be lure by the firm (Carmody, 2013).
 Production stage: The activities such as colouring and printing tend to come under the
given phase (KhairatP0F and Maher, 2012).
3.2 Assessing the suitability of alternatives to the traditional brochure
The suitability of alternatives to the traditional brochure are assessed by the different type
of tour operators. Traditional brochure is the type of document which gives very precise
information about the specific holiday package. Furthermore, the traditional brochure is very
economic in nature as here firm will not have to make much investment like it need to do in
other type of brochure. The given form of brochure seems to be more suitable for the inbound
tour operator who organizes tours for the domestic tourists only. In this regard, there are different
alternative type of brochure assessed which manager of Thomas Cook could use in order to
develop the brochure for the educational holiday trip (Cheng and et.al., 2011).
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E-brochure is being regarded as an alternative to the traditional form of brochure. It is an
effective form of brochure as it present the content of the specific tour in a very attractive
manner (E-brochure, 2016). In addition to this, the given type of brochure will also provide
opportunities to the firm to add some 3D effect in the pictures as well as contents. When it comes
to suitability aspect at that time it can be said that traditional form of brochure are costlier than
the given one. This is because, while framing traditional brochure, Thomas Cook will have to
make investment in the activities such as printing and bindings etc. But, the given cost can be
saved with the use of E-brochure. This form of brochure seems more suitable for the outbound
tour operators who organises tours for both foreign and domestic tourists. This is because, by
using the given method, an effective presentation with regards to tour package can be offered by
the corporation (Page, 2014).
In addition to this, another form of brochure is video brochure. In this type of brochure,
customers can visually see the places where they will go to stay and perform the travel and
tourism activity. In addition to this, by adding audio element to this brochure the effectiveness of
the same can be enhanced. Thus, given characteristics can be consider as plus point of video
brochure which makes is more effective than the traditional one.
Besides this, it is recommended to the Thomas Cook that it must use video brochure for
the educational holiday package. This is because, with the help of this information about the
respective holiday can be spread by it among large number of HND TTM teachers. As a result of
it, significant improvement can be carried out in the demand of Thomas Cook services.
3.3 Evaluating the suitability of different methods of distribution
In order to sell the formulated educational tour package, manager of the Thomas Cook
will have to make the selection of suitable distribution mean (Chaumont and Yor, 2012). Thus,
before doing that suitability of different distribution, method is evaluated. In this context,
distribution can be done either through direct selling or from internet. Here, direct selling can be
consider as one of the most suitable approach for the Thomas Cook. This is because, in this
method Thomas Cook will carry out the recruitment of an individual who will give information
about the respective tour in a detailed manner. In addition to this, by appointing such individual
all the doubts which have being confronted by customers can be resolved. However, the
effectiveness of this method thoroughly depends upon the skill of recruited individual (Naji-
Azimi and et.al., 2012). For example, if Thomas Cook has carry out an appointment of such
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individual who himself does not have any knowledge regarding the respective tour. Then in the
given circumstance it will become difficult for him to resolve all the doubts which are being put
up by the manager.
Furthermore, internet is another method of distribution. Here, with an aim to sell the
framed tour package, Thomas Cook’s manager can take help from the famous social networking
sites such as Facebook and Twitter. Here, with the help of the detailed information regarding the
respective tour can be provided by the cited firm to their respective buyers in an effective
manner. Thus, here benefits can be gained by the enterprise in the form of increased profits and
sales. Among given two mean, it is suggested to the manager of Thomas Cook that they should
use internet as a means for distributing it’s the product (educational tour package) to the buyers.
This is because, the given mean puts more influential impact upon the customers as compared to
other (Law and Xiang, 2013). Due to this, the benefits can be gained by the enterprise in the
form of increased profits and sales.
TASK 4
4.1 Evaluating the strategic decisions made by different tour operator
The tour operators have to make different type of strategic decisions. This is due to the
fact that, through this way they will be able to carry out their efforts to perform the operation of
their firm in a smother manner. In accordance with the given context, an evaluation is being
carried out with regard to the strategic decision which is being made by the tour operator like
Thomas Cook. In this context, on the basis of analysis it is assessed that tour operators have to
make a decision regarding the pricing strategies (Barker, 2014). While taking the decision,
manager of firm will have to look after the number of other factors such as economic condition
of nation and purchasing capacity of customers etc. However, lack of consideration of the same
will lead to the direct impact upon the demand of the services which is being offered by the firm.
Thus, for the firm it is very necessary that it must give considerable importance to these factor.
In addition to this, the manager of Thomas Cook will also have to make the strategic
decision regarding the type of distribution tactic which needs to be used by them. It is important
for the firm that they may make the decision about the same on the basis of its target customer.
For example, in the given scenario the enterprise is organising tour for the students. Thus, with
an aim to attract them towards the services of Thomas Cook, they should employ the mean such
as internet in order to give them the information about the tour package (Carmody, 2013).
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However, it has been evaluated that while making the decision about the distribution channel,
tour operator must consider the factors such as target customers and cost associated with each
tour. This is because, through this type of activity an effective strategic decision can be taken by
the manager of Thomas Cook (Cheng and et.al., 2011).
4.2 Comparing the tactical decision that could be taken by Thomas Cook in different type of
situation
A manager can be consider effective if he possesses an ability to transform his decision
as per the situation which is being faced by them. In accordance with the given context, there are
different type of situations identified in which manager of Thomas Cook can make different type
of decisions (Nahmias and Olsen, 2005). For example, there is a situation in which Thomas
Cook’s manager faces intense competition from its competitors. Thus, the given situation can be
dealt by the manager by tactical decision making related to the pricing tactic. In this regard, it is
recommended that the firm must reduce the prices of its services. Furthermore, firm can also
make an efforts to give some additional services along with the holiday tour packages. Thus, by
complying with the given type of activity only, manager of Thomas Cook will be able to direct
its efforts in terms of attracting large number of buyers towards its services. Thus, through this
way it can attain competitive edges. Thereby, it can perform significant improvement in its
market share also. In the similar way, the economic condition of a country also affects the
tactical decision making of the firm (Levene and Loizou, 2012). For example, with an aim to
deal with recession type of situation, manager of firm will have to make efforts to reduce the
prices of the services which are being charged by it. This is because, if this is not taken then for
the manager it will become difficult to raise the demand of its services.
CONCLUSION
From the above report, it can be depicted that the recent trends as well as developments
which has been occurring in the travel and tourism industry are causing major impact upon all
the firms which are related to this business. In addition to this, for the manager it is very essential
that while coming up with the holiday plan for the respective buyers they must follow the
number of steps which are associated with the same. This is because, it is by complying with the
needs of customer only Thomas Cook can enhance as well as maintain the satisfaction level of
their buyers. Hence, it can improve their probability of gaining high profits and sales.
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REFERENCES
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Tourism: Practice, Care, and Politics in Contemporary Travel Culture (Vol. 26).
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Moutinho, L., 2011. Strategic management in tourism. CABI.
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