Tour Operation Management: A Comprehensive Guide to Designing and Selling Holiday Packages

This report delves into the intricacies of tour operation management, exploring the key aspects of designing and selling holiday packages. It analyzes current trends in the industry, assesses the stages involved in developing holidays, evaluates contracting methods, and calculates the selling price of a package. The report also examines brochure design, distribution methods, and strategic and tactical decisions made by tour operators. Using Trailfinders as a case study, the report provides a practical understanding of the complexities of tour operation management.

Tour Operation Management

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
1.1 Analyse the effects of current and recent trends and developments on the tour operator’s. .2
industry........................................................................................................................................2
LO2..................................................................................................................................................3
2.1 Assess the stages and timescales involved in developing holidays.......................................3
2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator [M1].......................................................................6
2.3 Calculate the selling price of a holiday from given information below................................8
LO3..................................................................................................................................................9
3.1 Evaluate the planning decisions taken for the design selected brochure..........................9
3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour
operators and recommend the most appropriate for your tour package....................................11
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of tour operator and recommend the most appropriate for your tour package.. 13
M2 select /design and apply appropriate methods/techniques..................................................15
LO4................................................................................................................................................16
4.1 Evaluate the strategic decisions made by different types of tour operator [M3].................16
4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations....................................................................................................................................18
Conclusion.....................................................................................................................................20
References......................................................................................................................................21

LIST OF FIGURE
Figure 1: Steps involved in development of holidays.....................................................................3
Figure 2: Gantt chart........................................................................................................................5
Figure 3: Methods of Contracting....................................................................................................6
Figure 4: Brochure Designing.........................................................................................................9
Figure 5: Alternatives to traditional methods................................................................................11
Figure 6: Online Boucher of Trailfinders......................................................................................12
Figure 7: Distribution methods used by tour operators.................................................................13
Figure 8: Tactical Decisions..........................................................................................................18

LIST OF TABLE
Table 1: Strategic Decisions made by tour operator......................................................................16
Table 2: Tactical Decisions...........................................................................................................18

Introduction
Tour operation Management can be defined as the study of managing and controlling of all the
activities involved in designing of holiday package. The report will focus on analysing the
current trend in tour operators industry. It will focus on assessing the stages in developing
holidays, evaluation of contracting methods as well as calculation of selling price of package.
The report will review the brochures and methods of distribution for selling of holidays. Last
task of the report will help in understanding the strategic and tactical decisions made by tour
operators. It will explain all the tasks by considering Trailfinders which is a travel organization
in UK and operates its travel centres in UK and Ireland.

LO1
1.1 Analyse the effects of current and recent trends and developments on the tour operator’s
industry.Effects of current and recent trends and developments on the tour operator’s industry
Trailfinders owns 3 travel centres in Ireland and 29 in
UK and is one of the popular travel organizations. It
provides customised travel services to its customers
majorly in Australia, South America, New Zealand,
Africa and Asia. Being the leading organization with
high level of customer satisfaction services, still it is
highly influenced by the current trends which are
explained as:
Technological Adoption: Travel and tourism is
growing at a rapid rate with the adoption of
technology. Utilisation of internet facilitates
customers to book travel packages online by
comparing several available options for prices
and facilities included in the package. Online
booking services seek the attention of customers
and also facilitate them to make cancellation of
their bookings in case of emergency.
Demands of customers: Tour operators have high
focus on providing customer satisfaction and therefore,
it provides customised products and services as per the
demand of tourists. High trend of flexibility among
tour operators is observed so that they can serve
customers in the most efficient manner. They offer tour
packages with wide range of features. Marketing: The major source of making
customers aware about its product and services is
marketing. Trailfinders have high focus on
adopting advanced marketing technique to
expand the demand and reach of its products and
services. The most common observed trend in
the tour operator’s industry is to offer discount
and other beneficial offers to attract customers.
There is high support of government in
promoting the travel industry by appointing
ambassadors.
Customer satisfaction: The effectiveness of tour
operator’s industry is measured in terms of customer
satisfaction. Demand of products and retention of
customers are the two major factors that influence the
customer satisfaction. Trailfinders for its growth in
competitive industry has high focus on improving its
products and services to provide high level of
customer satisfaction services.

LO2
2.1 Assess the stages and timescales involved in developing holidays.
Tour operators like Trailfinders is involved in developing holidays and therefore to design the
holiday packages in the most efficient manner it is important to follow the sages and timescales
so that development of holiday packages is beneficial for both customers and as well as travel
organization. Below explained are the major steps that must be followed by Trailfinders while
developing holidays:
Figure 1: Steps involved in development of holidays
(Source: Author)
Market Research: The most important stage in development of holidays is to conduct the market
research to study and analyse the market conditions to identify the demands of customers. It is
important to know about the destination for which travel package is to be designed (Wu
MARKET RESEARCH
PROPER PLANNING AND TOUR
SCHEDULING
CONTRACTING
COST IDENTIFICATION
MAKING THE BROHURE

et.al.2016). The demand of customers in the market and their choices of destinations can be
identified by using PESTEL analysis.
Planning and Scheduling: Planning and scheduling of the package is done as per the needs and
demands of customers. The current tour package is to be designed for 42 students for the period
of 5 days and therefore planning for all the facilities must be done for appropriate number of
members and scheduling must be such that all the activities are completed within the given
constraint of time.
Contracting: It is important to provide cost effective services to the customers by maintaining
own profit margins. This can be achieved by making prior contracts with service provides that
are responsible for providing accommodation, transportation, food and many other facilities.
Prior contracting not only saves money but at the same time it also saves lot of time which will
provide higher satisfaction to customers.
Cost Identification: Overall cost of the package is dependent on the prices involved in each stage
of development of holidays (Chan et.al.2015). Tour operators must identify the cost by
estimating the maximum of rates for each of the service and stage involved in the package. This
will support in maximising the profit.
Designing of Brochure: To promote tour package, Trailfinders must focus on designing
attractive brochures to attract more number of customers. Designing of brochure highly impact
the decision making of customers in a positive manner.
Entire development of holiday with the implementation and execution of all the above explained
stages can be accomplished in 4 month of time period.
Events/
timescale
(2018)
1st Month 2nd Month 3rd Month 4th Month
Research
Planning and
scheduling

Contracting
Brochure
Designing
Figure 2: Gantt chart
(Source: Author)

2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator [M1].
There exist various methods of contracting to make contract with various service providers that
provide food, transportation, guide and accommodation services. Contraction is mainly
categorised as fixed and variable type of contract (Kunreuther and Michel-Kerjan, 2015). For
various components, tour operators utilise different methods of contracting which are explained
as follows:
Figure 3: Methods of Contracting
(Source: Author)
Accommodation: The contract is made with hoteliers to provide stay facilities to its customers.
The current tour package will provide accommodation facilities to 42 students for 5 days and
therefore contract must be made by making sure that they choose they get best stay facilities in
return of their money. Variable contract is used for contracting with hoteliers as it will reduce the
risk in case if number of tourist denies visiting at the end moment. Under this contract, tour
operator is liable to pay only for the number of occupied rooms but with no discount.
Methods of
Contracting
Fixed
Contract
Variable
Contract

Transportation: The facilities include booking of cab as well as coach facilities to serve
customers and facilitate them to visit the local places of the destination in a comfortable manner.
For booking of coach, Trailfinders focus on making fixed contract with the coach service
provider (Shi and Feng, 2016.). The risk factor is high and but is cost effective as compared to
variable cost but at the same time it includes large discounts and offers.
Food: Trailfinders does not make any fix or variable contract with restaurant as different
students have different likes and preferences of food. Therefore, the contract is based on the
basis of ordering of food as per the taste of customers. Therefore, it is requested to managers of
restaurant to not the orders and to make payment accordingly.
Guide Facilities: Fixed contract is made with the guide who takes payment as a whole
irrespective of number of tourists. Guide is responsible for making students aware about
historical importance of various destinations. They are also responsible for communicating
information about new destination and the purpose of visit and therefore, tour operator must
focus on contracting with the person who is a good orator and is experienced in communicating
in different languages.

2.3 Calculate the selling price of a holiday from given information below
The current tour package designed by Trailfinders is from London to Belgium for 42 students for
5 nights. To calculate the overall selling price of the holiday package, tour operator will consider
transportation, accommodation, guide facilities and food facilities.
Current exchange rate for 1 Pound = 1.12 Euros therefore, 1 Euro= 0.892 Pounds
Accommodation will be on twin sharing basis and cost for 1 person is 92 Euros
Therefore, Cost for rooms for 5 days = 42* 5*92*.892 = 17233.44 Pounds
Cost of coach = 7350 Pounds
Cost of guide = 1020 Pounds
Cost of Visitor attraction for 42 students= €52 per person= 52*42*0.892= 19,481 Pounds
Components involved in the package Cost in Pounds
Accommodation Cost 17233.44
Cost of Coach 7350
Cost of tourist guide 1020
Cost of visitor attraction 19481
Overall Cost 45084.44
Mark up cost of 25% 11271.11
Selling Price Of the package 56355.55
Total selling price for 42 students = 56355.55 Pounds and therefore cost of the package per
student is 56355.55/42= 1341.79881 Pounds

LO3
3.1 Evaluate the planning decisions taken for the design selected brochure
Marketing and promotion of products plays an important role in the growth of their own business
and at the same it highly influences the decision making of customers. Therefore Trailfinders has
high focus on designing of brochures for attracting large number of customers (Huertas‐Garcia
et.al.2014). Brochures are chosen by large number of tour operators as it contains all the detailed
information about the packages necessary for customers to know about. Trailfinders is currently
planning an educational tour and therefore brochure must be designed to attract large number of
students. For designing of brochure, tour operators and their marketing and designing team must
focus on various aspects such as:
Figure 4: Brochure Designing
(Source: Author)
Formatting: The most essential stage in brochure designing is its formatting. Format of the
brochure must be in such a way so as to attract more number of customers. It must include
attractive images and colours related to the destination that it puts positive impression on
Elements for
brochure designing
Formatti
ng
Content
Paper
Qulaity
Selection
of Colors

customers. It must include all the information of the trip such as description of destination,
transportation, food, contact details and all the other inclusions.
Content: Content in the brochure must be easy to understand. It must be strictly related to the
package and must include all the necessary details to attract customers to buy the package.
Management team must focus on avoiding any of the complex information that creates confusion
and puts negative impact on decision making of customers (Moldovan and Moldovan, 2015).
Paper Quality: The quality of paper used in designing of brochure reflects the brand name and
image of the tour organization. Higher quality of paper used in brochure will definitely put
positive impact on decision making of customers.
Selection of Colours: It is known fact that bright colours attract human beings and therefore,
Tour operators like Trailfinders must focus on using attractive and bright colours in their
brochure. Along with the entire details, brochure must be designed by using attractive colours to
enhance the positiveness of the package.

3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour
operators and recommend the most appropriate for your tour package.
Trailfinders focus on using traditional brochure which is less effective as compared to the other
methods of promoting packages (Andrews, 2017). New technologies and the growth of
digitalisation have replaced traditional brochures and are very effective in attracting customers.
Alternative methods help to increase the demand of products and services. Various alternatives
to traditional methods are as follows:
Figure 5: Alternatives to traditional methods
(Source: Author)
E Brochures: These can also be referred to as online brochures which are considered as the best
alternative to traditional brochures. It not only enhances the reach of customers but at the same
time it is highly cost effective and less time consuming. E brochures can be sent through to the
customers through e mail which will include all the necessary details and offers about the current
package. Inbound tour operators utilise such method to promote their products.
Alternatives
to tradional
Brochures
E
Brochures
Visual
Brochures
Travel
Agents
Website

Website: The most influential technique to make customers aware about their products and
services is the displaying of information on website. Trailfinders along with digitalisation n have
high focus on uploading brochures on its own website to increase the demand of its products and
services. The major advantage of using website is easy accessibility to all with no charges.
Customers can access the website using internet connection from any corner of the globe. Both
inbound and outbound tour operators rely on website.
Figure 6: Online Boucher of Trailfinders
(Source: Trailfinders, 2018)
Visual Brochure: This is considered as an effective way to communicate to customers about the
current offerings (Hsu and Song, 2014). This alternative method increases the productivity as
demand of the product is increased. Visual brochures include videos as well as pictures that help
in seeking the attention of customers to buy the packages. Inbound operators have high focus on
Visual brochures.
Travel Agents: These operate as intermediaries for tour operators and plays an important role in
maintain the balance between supply and demand in tourism industry with context to products
and services. Domestic and ground Level tour operators hire travel agents.

For the current tour package to be promoted, the most suitable alternative as compared to
traditional method is E brochures and website which are highly cost effective and less time
consuming.

3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for different
types of tour operator and recommend the most appropriate for your tour package.
Various organizations utilises different methods of distribution to sell holiday packages to
maintain equilibrium between supply and demand. There are various methods used by various
tour operators which are explained below:
Figure 7: Distribution methods used by tour operators
(Source: Author)
Direct Selling: This can be referred to as direct interacting to customers for selling of packages.
Interaction can be done either with the help of email, telephone or face to face interaction. The
technique is cost effective and saves lot of time (Masiero et.al.2015). Thos is highly effective in
attracting and influencing customers in the positive manner. Direct selling method for brochure
distribution is utilised by Ground Level as well as Domestic Tour operators
Internet: With the emerging trend of globalisation, the usage of interne by tour operators is also
increased. Tour operators have high focus on utilising you tube for visual brochures as well as
can also use online banner, social media platforms like Facebook as well as blogs to display the
Methods of
Distrbution
Direct
Selling
Internet
Call
Centres
Agents

information related to current offerings. This type is mostly used by inbound as well as outbound
tour operators.
Call Centres: This type of technique not only support selling of product and services but it also
support customers and tour operators to provide after and before selling services to provide high
level of customers satisfaction (Axtell and Holman, 2017). Every organization must set up
separate unit to serve customers by resolving their concerns and issues related to the holiday
packages.
Agents: Agents are the mediators and sells product on behalf of the tour operators across the
globe. Selling and buying of packages from travel agents is expansive and time consuming at the
same time. The process becomes complex in the case if customers are unable to contact the
agents for any of their query.
From the above discussion, it is recommended for Trailfinders to utilise internet to increase the
demand of products and services and is cost effective at the same time.

M2 select /design and apply appropriate methods/techniques.
Trailfinders operates as a leading organization and have high focus on using brochures for
promoting its products and services for attracting customers. Brochure is one of the most
important techniques to gain the attention of customers. There are various technologies that are
implemented by Trailfinders to design brochures. Trailfinders successfully target all customers
by using internet sources with a major emphasize on social media platforms. Internet is
considered as the most influential tool to increase the reach of customers and relevant demand of
products and services. Email and direct selling are also considered as important methods for
distribution of packages to generate large amount of revenue.

LO4
4.1 Evaluate the strategic decisions made by different types of tour operator [M3].
Strategic decisions made by tour operators to achieve their goals by increasing the productivity.
Decisions are made by analysing the current situations and available options.
Table 1: Strategic Decisions made by tour operator
PARAMETERS DESCRIPTION
Distribution Tour operators must focus on strategies for effective distribution of
their products and services to attract large number of customers. They
must identify the needs of customers before designing the distribution
strategy.
Segmentation, Targeting,
Positioning (STP)
Customers are segmented by their diversified demands and features.
Therefore tour operators must focus on designing the packages by
considering the demands of customers. It is important for tour
operators to analyse the market segment to target and position the
customers. They must consider all the factors like budget, spending
power, etc.
Marketing
Marketing is an essential tool to make customers about their offerings.
They must utilise and implement most effective tool for promotion
which help tour operator to enhance their product reach (Nagle and
Müller, 2017.
Customer relationship Strategic decisions highly influence the customer relationship and
therefore tour operators must focus on selling products at affordable
prices so that maximum customers can avail the products and tour
operators can generate more revenue.
Cost Strategy The pricing strategy must be altered as per the demand of customers to
gain high profit margins. Tour operators must adopt different strategies
for pricing of holiday packages without compromising the quality of
product. Various strategies include:
 Skimming Price

 Cost Plus Pricing
 Penetration Pricing

4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations.
Tactical decisions are known as short term tactics adopted by tour operators for executions of
activities. These decisions are taken by negotiating with various service providers.
Figure 8: Tactical Decisions
(Source: Author)
Below are some tactical decisions:
Table 2: Tactical Decisions
PARAMETERS DESCRIPTION
Pricing Strategy Tour operators must adopt discount strategy by identifying the demand
of customers. Short term pricing strategies will provide high profit
margin to the business of tour operators.
External Factors  Currency Rates: International tour operators rely on
exchange rate for the growth of their business. Therefore
tour operators must develop strategies to meet the
fluctuation in currency rate in an effective manner.
 Economic Growth: The decline and enhancement in
Tactical
Decisions
Pricing
Strategy
External
Factors
Competition

economic growth highly influence the tactical decision of
tour operators in both positive and negative manner
(Buckley and Mossaz, 2016). Disposable income of
customers also influence tactical decisions in negative or
positive manner
Competition Customers as per the current trend of competition have several choices
to choose the holiday package by comparing the offerings and prices
of different tour operators. Therefore, tour operators must focus on
taking decisions to alter the services, promotional strategies, pricing
strategies, etc after analysing needs of customers and position of
business in the market.

Conclusion
From the above study it has been concluded that recent trend in the tour operators industry highly
influence its growth. Different aspects of tour operators help to evaluate the role of tour operators
in the industry. Trailfinders have adopted various methods of promoting and selling of product to
maximise the demand of its products and services and therefore, it has been identified that tour
operators must choose the most appropriate option from all the available options with the help of
developing effective strategic and tactical strategies. Different types of tour operators use
different types of contracting methods as per the demand of customers and their business
position in the market.

References
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