Tour Operation Management: Trends, Development, and Strategies

This report delves into the dynamic tour operation industry, exploring current trends and recent developments that shape the business landscape. It examines the stages and timescales involved in holiday development, including market research, negotiation, cost assessment, and planning. The report also analyzes different types of tour operators and the methods of contracting for various holiday components. Furthermore, it explores the planning decisions involved in designing brochures, the suitability of alternatives to traditional brochures, and effective distribution methods for selling holidays. The report concludes with a discussion of strategic and tactical decisions made by tour operators, using Adventures Aboard as a case study.

TOUR OPERATION MANAGEMENT

Table of Contents
INTRODUCTION................................................................................................................................2
TASK 1..............................................................................................................................................3
1.1 EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON THE TOUR
OPERATORS INDUSTRY................................................................................................................3
TASK 2..............................................................................................................................................6
2.1 STAGES AND TIMESCALES IN HOLIDAY DEVELOPMENT........................................................6
2.2 METHODS OF CONTRACTING FOR DIFFERENT COMPONENTS OF THE HOLIDAY AND
DIFFERENT TYPES OF TOUR OPERATOR......................................................................................8
2.3 HOLIDAY SELLING PRICE......................................................................................................10
TASK 3............................................................................................................................................12
3.1 PLANNING DECISIONS TAKEN FOR DESIGN OF A SELECTED BROCHURE............................12
3.2 SUITABILITY OF ALTERNATIVES TO A TRADITIONAL BROCHURES FOR A DIFFERENT KIND
OF TOUR OPERATOR..................................................................................................................13
3.3 THE SUITABILITY OF DIFFERENT METHODS OF DISTRIBUTION THAT CAN BE ADOPTED TO
SELL HOLIDAY.............................................................................................................................14
TASK 4............................................................................................................................................16
4.1 STRATEGIC DECISIONS MADE BY DIFFERENT TYPE OF TOUR OPERATORS.........................16
4.2 COMPARISON OF TACTICAL DECISIONS THAT COULD BE TAKEN BY ADVENTURES ABOARD
...................................................................................................................................................17
CONCLUSION.................................................................................................................................19
REFERENCES...................................................................................................................................20
1

INTRODUCTION
The tour operation industry has been attaining development and growth rapidly in the recent
time. In addition to this, the travel and tourism industry is also experiencing several changes
and enhancements in the business environment. This report will be discussing the trends and
changes that are observed in the tour operation industry. Moreover, there are several essential
areas of the tour operation industry which would be effectively understood through the report.
Further, the report discusses the stages essential in holiday development and acquiring selling
price of the tour package (Mason, 2015). There are several kinds of tour packages provided by
the company to the customer’s need and requirement which are developed by considering
several factors. Overall, the report will be helpful in acquiring the required knowledge of the
tour operation industry.
2

TASK 1
In recent time, there are various changes and trends that have been observed in the tour
operator industry. The product development team of Trailfinders Ltd. has produced a leaflet
that comprises of the trends and changes that are observed in the industry. In addition,
different sources are used for developing an effective understanding regarding essential aspects
of the industry so that potential strategies for business could be developed.
1.1 EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON THE
TOUR OPERATORS INDUSTRY
The tour operator industry is expanded in a
wide area and there are several factors
which support the business functioning
effectively. In the recent time, there are
various changes and trends that have been
observed in the tour operator industry. The
development and trends possess a huge
effect on the tour operator industry. It has
been observed that the tour operator
industry in the UK plays a major role in the
development of their economy. According
to EU Package Travel Directive, the tour
operator is known as an organization that
has brilliance in building tour packages for
the people (Novelli and Hellwig, 2011). The
tour operator industry comprises of several
kinds of tour operators like direct sales
operator, incoming operator, inbound
operator, outbound operator, and special
operators.
The trends and development in the tour
operator industry have been observed in
different areas which could be understood
as follow. There are some big names in the
tour operator industry like Cox & Kings,
Thomas Cook, Thomson, Trailfinders Ltd.,
etc. These companies provide several types
of products and services to their customers.
Currently, the Trailfinders are conducting
3

their operation in the cities of the UK and
Ireland with 30 travel centres which are
operating for 47 years. Now, their
operations are conducted in New Zealand,
North & South America, Africa, Australia,
and Asia. The current trends and
requirements of the customers are
considered during the development of the
tour packages (Nunkoo and Smith, 2013). In
addition, suitable enhancements are made
in the business which results in high
profitability for tour operators. The
globalization has also strengthened the
business operations of tour operators.
Figure – Tour Operation Industry
[Source -
http://xmlwriter.net/sample_chapters/Pro
fessional_XML_Design/contents.shtml]
The changes and trends in the tour operator
industry are observed in areas like mass
tourism, holiday sites, product ranges,
responsible tourism, etc. For Trailfinders
Ltd. the mass tourism is an essential tool in
gaining the attention of a large number of
tourist because various types of tour
packages are designed for them. The tour
operator uses exotic holiday sites while
designing the tour package effectively.
Currently, Cruise tourism is the major
market trend that has been growing
speedily. In addition, suitable procedures
are conducted for responsible tourism in
providing maximum satisfaction to the
consumers.
The tour operator industry possesses
several effects like offers, budget airlines,
discount, economy, etc. The recession and
BREXIT issues possess a negative influence
on the economy of the country. Still, the
offers and discounts by the tour operators
are helpful in gaining the attention of
tourist from all over the world. Also, the
airline budget has been varying regularly.
4

There are several bodies and authorities
that are managing and handling the tour
operator industry effectively such as The
Travel Association (ABTA), Federation of
Tour Operators (FTO), UK inbound,
Association of Independent Tour Operators
(AITO), and the UK Civil Aviation Authority
(CAA). These bodies effectively fulfil their
responsibility towards the tourist so that
they could enjoy the services in an effective
manner (Nyaruwata, et al. 2016). Thus,
these elements and aspects are helpful in
attaining huge development in the tour
operator industry
.
5

TASK 2
INTRODUCTION
The important process in the tour operator industry is considered as holiday development. In
the holiday development, various stages are considered by the tour operator company. A
report has been developed that helps in gaining the adequate understanding of the stages in
holiday developments and the contracts. Further, the process is evaluated through which the
selling price of a tour package could be measured.
BODY
2.1 STAGES AND TIMESCALES IN HOLIDAY DEVELOPMENT
It has been observed that different stages are involved in the holiday development. Further, a
timescale is also designed so that every stage could be easily conducted and managed in a
suitable manner. In addition, the customer needs and requirement are also considered in the
holiday development. The major stages of the holiday development are:
1. Market Research
In the holiday development, the reason for market research is to evaluate the current
trends and changes in the tour operator industry. The aspects which need to be
considered are tourist safety, accommodation facility, destination sites, travelling, etc.
2. Negotiation
The tour operator industry is huge in which several service providers assist the tour
operator in delivering quality products and services to tourists (Papathanassis and
Knolle, 2011). Suitable negotiation is conducted by the tour operator so that they could
manage the service provider’s cost. This helps in designing suitable cost for the holiday
package.
3. Assessment of Cost
It is necessary to assess the cost that has been allocated for the holiday development
such that more cost will be required or not. It is observed that the allocated cost is used
6

in major areas for delivering quality services to the customers. The major areas are
known as travelling expenses, service provider cost, research cost, etc.
4. Planning and Scheduling
During the holiday development, it is necessary to suitably plan and schedule the
process for holidays. It helps in accomplishing the required objectives for a certain
period of time. Here, the holiday package of 5 nights is developed of Belgium for 42
students.
5. Managerial Workforce
It is necessary for the tour operator to recruit candidates that possess required skills
and talent so that they could provide quality services to tourists (Potgieter, et al. 2013).
The candidates are selected in the tour operator company on the basis of their
knowledge regarding destination sites, resource utilization, customer requirement, etc.
6. Analyses and Evaluation
Further, the tour operator company scrutinizes the whole holiday development process
effectively for identifying the weak areas so that appropriate measure could be made.
In addition, the customers are approached for their feedback regarding the holiday
package. The holiday development will require 6 months of time and for understanding
the timescale a Gantt chart has been developed.
TIME SCALE I MONTH II MONTH III MONTH IV MONTH V MONTH VI MONTH
Market
Research
Negotiation
Cost
Assessment
Planning
and
7

Scheduling
Managerial
Workforce
Analyses
and
Evaluation
2.2 METHODS OF CONTRACTING FOR DIFFERENT COMPONENTS OF THE
HOLIDAY AND DIFFERENT TYPES OF TOUR OPERATOR
The meaning of the contract is a specific deal which occurs between two or more parties under
a legal agreement. The tour operator industry provides the legitimate products and services to
the consumers as per the contract. There are several kinds of contract that are utilized in
holiday development. The holiday development comprises of several aspects like destination
sites, travelling, accommodation, etc. There are some tour contracts which could be utilized by
the tour operator such as:
 Ad Hoc Contract
During the holiday development, the available resources are utilized in an optimal
manner under this contract. The services available in the holiday package as per the
contract could be attained by the consumer on hourly or daily price basis (QUARSHIE,
2010). This contract could be utilized by Trailfinders Ltd. in maintaining their financials
and also attaining confirmation from customers through emails.
8

 Fixed Contract
This contract is available for the certain period of time and then it expires. It is highly
used in the tour operator industry for gaining huge sale of the products and services
because the tour operator booked the services in advance due to cost-effectiveness.
 Sale Only Contract
Under this contract, the tour packages are sold to customers at high prices in
comparison to fixed contract (Slivar and Pavlović, 2012). The contract is developed
during the requirement and need of the consumers.
The tour operator effectively chooses the appropriate contract in order to develop the suitable
holiday package for the customers. Further, the company assists the customers in choosing the
appropriate holiday package so that their need and requirement could be fulfilled. There are
various kinds of the tour operator that are available in the tour operator industry like:
 Domestic Tour Operator
The tour operator works at the domestic level like providing the tour packages to the
customers in the host country. Also, they provide the required assistance to them in
visiting the sites in the host country.
 Ground Operator
The ground operator is also called service provider in the tour operator industry as they
manage the accommodation, travelling, booking, etc. of the customers (Swarbrooke and
Page, 2012). They also provide the required assistance to the tour operator in terms of
services.
 Inbound Tour Operator
The inbound tour operator is directly linked with the tourists such that they provide the
required services to them from their arrival at the site to their departure.
 Outbound Tour Operator
There are various products and services that are provided by the outbound tour
operator to the local as well as the international tourist in the country.
9

2.3 HOLIDAY SELLING PRICE
The Grand Casselbergh of Bruges has been proposing a tour package to Trailfinders Ltd. as they
are conducting the tour for 42 students. The hotel is charging for two individuals in a single for
a day align with a breakfast by 96 euros. A luxury coach of 48 seat capacity will be provided
with two drivers in £11,200 that also included taxes, fuel, tour manager, and other expenses
(Tsiotsou and Ratten, 2010). Also, a local guide will be provided for the tour under £945. The
Trailfinders Ltd. has considered the offer and they are asking for the markup of 33% on the
entire deal. The selling price of the tour package for a single student has been provided as
follows:
Various Facilities Calculation Cost
Cost of Rooms and Breakfast 42*96*5 € 20,160.00
Overall cost € 20,160.00
1 euro = 0.892 pounds
Cost in pounds 20,160.00*0.892 £ 17,942.72
Cost of guide £ 945.00
Cost of bus £ 11,200.00
The total cost of the tour package is £30,087.72
After making the markup of 33% for the cost of tour package is £10,029.24
The final cost of the tour package is £40,116.96
There are 42 students for the tour and the cost of tour package for the single student could be
determined by £40,116.96/42 = £955.16
10

CONCLUSION
The report helps in depicting the effectiveness of the major areas in the tour operator industry
effectively. The major areas are hostages in the holiday development, contracts, and types of
the tour operator. Moreover, the report helps in understanding the process of determining the
selling price of a tour package.
11

TASK 3
EXECUTIVE SUMMARY
In tour operation industry, brochures play an important role in attracting the tourists which
reflect significantly and positively on the sales and profitability of the company, therefore, it is
imperative for a company to focus on the development of effective brochures. This task
demonstrates planning decisions which can be taken for the design of a brochure. It also
elaborates various alternatives to traditional brochures which can be adapted to attract the
tourists. It further explains various methods of distribution which can be adopted by a company
to sell holiday. This task adopts the case study of ‘Kuoni Travel’ to make a deep understanding
of the topic.
3.1 PLANNING DECISIONS TAKEN FOR DESIGN OF A SELECTED BROCHURE
A tour operator should focus on making effective planning regarding the design of brochures as
it plays an important role in attracting the tourists. There are different factors which should be
considered by a tour operator to design attractive and effective brochures. Kuoni should
consider all the elements associated with the design of brochures in order to make effective
decisions. There are different stages or factors involved in the design of a brochure
(Andergassen, et al. 2017).
The stages or factors which should be considered for the design of a selected brochure are:
Research, strategy or feasibility- A tour operator conducts the research to collect the
important and relevant information to design brochures. A brochure should include all the
important information so that client can get an idea of that service or facilities are provided by
the company (Brito and Pratas, 2016).
Design concept- It is crucial for a tour operator to design an attractive brochure as it attracts
the clients. The factors which should be considered to design an attractive brochure are the
colour combination, paper quality, size, font style, keywords etc.
12

Budget and target market- it is important for a tour operator to design brochure by considering
the budget. Effective planning is done to design effective and attractive brochures to attract the
customers. Kuoni can take the advantage of economies of scale to take develop cost-effective
brochures. A company should consider its target market and should develop a brochure which
can attract them.
Distribution- A Company make the effective planning and decisions regarding the distribution
of the brochures. There are different factors which should be considered by a tour operator to
make its distribution channel strong. There are different methods which can be adopted by a
company to distribute the brochures and to reach to customers.
Kuoni should consider all the above-mentioned factors in order to develop effective strategies
for the effective designing of brochures.
3.2 SUITABILITY OF ALTERNATIVES TO A TRADITIONAL BROCHURES FOR A
DIFFERENT KIND OF TOUR OPERATOR
A brochure reflects significantly on the buying behaviour of the tourists, therefore, it is
important for a tour operator to develop attractive brochures in order to attract the customer.
There are few limitations of the traditional brochures which can influence its effectiveness in
attracting the large volume of the tourists. There are various alternatives to traditional
brochures which can be adapted to attract the tourists. The key alternative to traditional
brochures includes e-brochures, CD, Video brochures etc. Kuoni can adopt all these alternatives
in order to reach to its target customers (Moldovan and Moldovan, 2015).
In modern scenery, E-brochure is one of the most effective tools to attract the tourist. E-
brochure is an innovative technique that allows a company to recreate the experience of
traditional brochures online. It does not need costly print or re-printing. It is an effective
medium to reach to the potential customers in a cost-effective manner. It is a good alternative
to traditional method which can be used by different types of tour operates including domestic,
outbound, incoming, direct sell and specialist tour operators. Since it is a paperless brochure,
13

therefore, it does not harm the environment. Kuoni adopts this method to attract the large
volume of the tourists in a cost-effective manner.
CD and video brochures are the effective alternative to traditional brochures. These different
tools can also help in a tour operator to reach to its target customers. A tourist can get the idea
of the facilities provided by a tours operator as well as the offers provided by them. A company
can also share the pictures of different facilities such as transportation and dining facility.
The above-mentioned alternatives are suitable for the domestic, outbound, incoming, direct
sell and specialist tour operators. E-brochures is most effective method suitable for all the
different types of operator particularly for the outbound and incoming operators. It is most
suitable for the tour package of Kuoni. Kuoni should focus on all these alternatives to reach to
its target customers (Lozano, 2016).
3.3 THE SUITABILITY OF DIFFERENT METHODS OF DISTRIBUTION THAT CAN
BE ADOPTED TO SELL HOLIDAY
Distribution is one of the important elements to reach to the large volume of the target
customers. There are various methods of distribution which can be adopted by a company to
sell holiday.
The important method of distribution to sell holiday are:
 Internet
 Direct sell
 Agencies
 Telephone or Teletext
 Call centre
Internet – In the modern world, the internet is one of the fastest and effective ways to reach to
its people. A tour operator can use this method to sell holiday. It can be used by used by
domestic, outbound, incoming, direct sell and specialist tour operators. It is adopted by Kuoni
to sell its holiday.
14

Direct sell – It is also an effective method in which a tour operator directly communicates with
the customers to sell the holiday. In this technique, the company provide leaflet or brochures to
its customers as well other additional information to the customers. In this method, tourists
bargain with the company to buy a holiday. It is most suitable for the domestic tour operators.
Agencies- There are many agencies which can help tour operator in selling their holiday. A tour
operator hires the services of the travel and tourism agencies for the enhancement of the sales
of its holidays.
Telephone or Teletext – In this method, a company call to customers and inform them about
their services. A company call its target customers and provide them attractive offers and
discounts to appeal them.
Call centre- In this method also company communicate the customers through different tools.
A tour operator provides information to the customer and answers their problem and queries.
All these distributions methods are effective in enhancing the sales of the company. Different
methods are suitable for the different types of tour operators. For example, the Internet is
most suitable for the outbound and incoming tour operator whereas direct sell is an effective
method for domestic and special tour operators. Telephone or Teletext and call centre are the
effective method for all the type of tour operators such as domestic, outbound, incoming,
direct sell and specialist tour operators.
CONCLUSION
It is important for a company to develop attractive and effective brochures to attract the
tourists. There are different factors which should be considered by a tour operator to design
attractive and effective brochures. There are various alternatives to traditional brochures which
can be adapted to attract the tourists. The key alternative to traditional brochures includes e-
brochures, CD, Video brochures etc. There are various methods of distribution such as the
internet, call centre, agencies which can be adopted by a Kuoni Travel to attract the tourists.
15

TASK 4
EXECUTIVE SUMMARY
This task deals with the different strategies and tactics decisions which can be made by
different tour operators in order to achieve significant progress. The case study of Adventures
Aboard is adopted in this report to make a deep understanding of various technics.
4.1 STRATEGIC DECISIONS MADE BY DIFFERENT TYPE OF TOUR OPERATORS
It is vital for a tour operator to develop effective strategic decisions in order to achieve
significant business growth. Different types of the tour operator make the different strategic
decisions in order to achieve significant business growth (Robinson, et al. 2016).
Figure1: Adventures Abroad logo
[Source: Soft Adventure Travel, 2018]
Adventures Aboard is a mass market tour operator. It is one of the fastest growing tour
operated which provide service in various tourist destinations majorly UK and US. McKinlay
Kidd is one of the leading niche/ specialist tour operators. It is an award-winning holiday in
Scotland, Ireland and England. It is recently awarded by Telegraph travel award. One of the
reasons behind the success of McKinlay Kidd is it's effective strategic and tactic decisions. It can
improve its strategies to achieve better results. The strategies which can be adopted by a
company are:
16

Segmentation target and positioning- It is imperative for a tour operator to segment the
market and to identify its target and potential customers in order to achieve better results.
Adventures Abroad can segment its market on the basis of four different factors which includes
demographic, geographic, psychographic and behavioural. The company can target the people
on the basis of lifestyle, education and occupation, interest, region, country etc. The target
customers of adventure board are people belong to the high-income group. The target
customer of the company is travel enthusiasts who like to travel frequently (Brown, et al. 2013).
Pricing strategy- The travellers or tourists concern about the price of the holiday, therefore, it is
crucial for a tour operator to develop effective pricing strategy in order to enhance the sales
and profitability (Mariani, et al. 2016).Adventures Abroad considers the different factors such
as pricing of customers, the demand of the customer, number of customers and other such
factors. It also provides attractive discounts and offers to its customers.
Distribution decisions- It is imperative for a tour operator company to focus on the
improvement of its distribution channels. Adventures Aboard adopt the different distribution
methods to reach to its target customers. Different distribution methods adopted by
Adventures Aboard are the internet, customer care, external agencies, call texts etc. All these
methods help in providing information, solving the problem as well attracting the customers.
All these strategies can be applied by a tour operator in attracting the customers. Adventures
Aboard make strategic decisions by considering all the different factors in order to make
effective decisions. There are various factors which can be should be considered by a mass
market and a specialist tour operator to develop effective strategies to achieve the significant
growth and development (Robinson, et al. 2016).
4.2 COMPARISON OF TACTICAL DECISIONS THAT COULD BE TAKEN BY
ADVENTURES ABOARD
A company should develop effective tactical decisions in order to enhance its sales and
profitability. The tactical decision helps in ensuring the efficient, flexible and smooth operation
17

of an organization. There are different factors which should be considered by an organization in
order to make the tactical decision for the benefit of the company (Page, 2014).
Adventures Aboard make different tactical decisions by considering all the different factors
which can influence its business operations. One of the main factors which are considered by
Adventures Aboard is competition. Tour operation industry is one of the most lucrative
industry, therefore, may local and global companies are attracting towards it which give rise to
completion. Adventures Aboard applies different pricing tactics to beat the completion. The
company provides holiday at the best price to its customers. It also provides different offers and
discounts such as seasonal discount and group discount.
Adventures Aboard applies different marketing tactics to enhance its sales and profitability. The
company focuses on the developing tactics on the basis of the various elements of marketing
mix which include price, products, promotion, people, process, place and physical evidence.
The company focuses on the effective promotion of its services to reach to them and to attract
them through quality service and attractive pricing strategies. It put efforts all the different
elements of marketing mix so that it can provide satisfaction to the customers. The company
also concerns with providing the best facilities to its customers at best price. It concerns with
the continuous improvement in the yield management, maximising occupancy and comfortable
transportation facilities.
There are different strengths and weakness of the different tactic, therefore, it is imperative for
an Adventures Aboard to focus all the merits and demerits of tactic in order to achieve better
results (Argüelles, et al. 2017).
CONCLUSION
It is vital for a tour operator to develop effective strategic decisions in order to achieve
significant business growth. The strategies or factors which can be considered by Adventurous
Abroad are pricing strategies, distribution strategy and segmentation target and positioning.
There are different factors which can be considered by an organization to make effective
18

tactical decisions. Adventures Aboard should on focus all the merits and demerits associated
with different strategies and tactics in order to achieve better results.
19

CONCLUSION
It may be concluded that a tour operator can make a desirable growth by considering all the
different factors associated with the tour operator industry. A tour operator should consider
the current and recent trend of development and different stages involved in creating holidays.
Brochures play an important role in attracting the clients, therefore, it is important for a
company to focus on the designing of the brochures. There are various alternatives such as E-
brochure, video and CD to traditional brochures which can be adapted to attract the tourists.
There are various methods of distribution such as the internet, call centre, agencies which can
be adopted by a company. A tour operator should develop effective strategies and tactics to
achieve significant progress.
20

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