Tour Operator Decisions and Strategies

This assignment delves into the strategic decisions made by tour operators within the travel and tourism industry. It examines the challenges faced by travel agencies, such as financial risks associated with pre-payment systems. The report highlights tactical decisions employed by tour operators like Thomson Group to navigate competition, manage occupancy, implement yield management pricing strategies, and segment their target market effectively.

Tour Operation
Management

INTRODUCTION:
At present time, the sector of travel and tourism is growing rapidly that helps to develop
economy of nation. After adopting new technology or new services, this sector has registered
itself as a highest growth rate business. In this industry, tour operation management plays an
important role because it aids in providing better quality of facilities to its users as well as helps
in satisfying the needs or wants of consumers. It makes tour holiday package by combining all
necessary components so that travellers can enjoy their leisure time. In this business, there are
five other industry which also contributes in making effective tour package and in which
included transportation sector, accommodation and hospitality facilities, food and beverage
industries, retail and many more sectors. This report will support to the coordinators in
investigations of various factors that can affect directly as well as non directly to the travel and
tourism company and its capabilities. It can helps to state the impact of current or recent trends
on tour operators as well as it explain the various steps and timescales which included in
developing holidays. Tour operator provides several kinds of facilities to the people for
satisfying their needs or wants in travels and tourism. Travel operators have to take decisions of
strategic as well as tactical decision for analysis in the industry.
TASK 1
1.1 Effects of current and recent trends on tour operations industry
There are various things which have changed after world war II like travel industry has
developed etc. At present time, tour and travelling industry is a growing sector that also
contributes in the development of nation because it is the greatest source of income by which
economy of country can be developed. This kind of business can be started by an individual
without investing huge amount of capital because there is need of good management rather than
cash. In United Kingdom, a survey is conducted in 2006 by which it came to know that this
sector almost contributed $170 billion in the development of economy of UK, USA and France.
For increasing the inflow of foreign currency, every country takes corrective action so that it can
attract the large number of visitors as well as can promote their culture. There are various current
and recent trends which influence the travel and tourism industry that are given below- Globalization- At present time, every nation has adopted globalization strategy in which
societies interact with each other at global level. It can be refereed as a process which
1

promotes the interaction level among human and travel around the globe. If country's
economic system will be integrated with global economy then it will increase the
movement of people. In short, it can be said that globalisation is process by which people
and organisations are free to move freely throughout the world. Safety and security- After introduction of globalisation, travel and tourism industry is
growing rapidly. It has also improved the quality of services as well as safety and security
of travellers. Still after this, government is facing various challenges regarding security of
travellers and is taking corrective action for providing safe and secure environment to the
tourist. Diversity- In today time, there are large number of diversified population and resources.
Every country should have diversity because it attracts the large number of visitors
towards tourist destination as they want to experience new culture and spend their leisure
time happily.
 Technology- It is the most influential factor which affects the tourism sector. If there is
any up-gradation in the technology then company should adopt it because it creates
growth opportunities for the industry. Advance air planes and communication tools have
changed the whole scenario.
TASK 2
2.1 Steps and schedules that involved in developing holidays plans
To develop the holiday plan for Chinese students, tour operators have to follow some
steps which are given below- beginning research- Before making any plans or strategies, company should conduct
enquiry which will include information about market situation and competitors policies.
With the help of this, operator can know that which goods or services should be offered
that will get positive response from consumers and what should be prices of services.
Apart from above, coordinator tries to collect large data regarding accommodation,
tourist destinations, transportation and service providers. Analysis of packaging cost- After collection of information or data, tour operators keep
those prices that can be afford by its target audience. Before setting cost of services,
needs or wants of consumers should be analyse.
2

 Negotiation with service provider- Tour coordinator offers that types of facilities to the
people by which experience of visitors make good. To provide good quality of services
to the customers, Thomson group need to identify about service providers in Netherlands,
Amsterdam who can support to provide facilities to the travellers. Fulfil the all legal requirements- Government hold various types of legal legislations
which have to followed by every organisation otherwise it will not be able to carry out
business activities smoothly. So for getting best result, company should follow all rules
and regulations.
 Promotional strategies- This strategy is very important for an organisation because with
the help of this, company creates awareness about its products and sales. It is last stage of
developing holiday plan by which company can generate profits as well as can get
attention of large number of people. Thomson Group can does advertisement about their
products through various ways such as social media, hoardings, newspaper, television
etc.
Gantt chart will help in understanding the timescale of each and every step that are given
below-
Activities/ Days 1 2 3 4 5 6 7
beginning research
Analysis of packaging cost
negotiation with service provider
Fulfil the all legal requirements
Promotional strategies
It hence proved from the above study, that tour operator needs sufficient time at least one
year to make effective and attractive package for developing holiday plan.
2.2 there are some different methods to contract for various components of the holiday
If Thomson Group wants to set high prices of their services then it has to provide good
accommodation facilities to them because if hotel will be good then traveller will be ready to pay
3

high amount. So company should select that guest house which will have good quality of goods
or services. While booking hotel, firm should consider some factor which are given below- Quality and safety- If consumers are paying high amount then they expect that they will
get better quality of services. So in this situation, operator has main responsibility to
provides facilities according to the expectation of people so that their needs or wants can
be satisfied easily. Apart from better quality of services, coordinator should also take care
of safety and security of travellers (Dodds and Kuehnel, 2010). Price- It is very important aspect because with the help of this, company will be able to
achieve competitive advantages over its rivals. If tour operator wants to set high prices of
his services then he should focus on the quality of hotel because if guest house will be
good then travellers will be ready to pay higher amount for holiday package and vice
versa. So while setting cost of holiday plan, company should focus on hotel facilities.
 Proper accommodation facilities for travellers- Every person has different needs or
wants regarding hotels as well as good facility for staying. So the responsibility of tour
operator is to ensure that everyone is staying at hotel according to their expectation. So
while booking guest house, company should evaluate the requirement of target market.
For example- In given case study, target market is student so while booking a hotel,
operator should check that there should be garden, sports ground etc.
There are several kinds of contracts that must be done according to the requirement of
people and nature which are as follows:- Fixed term contract- According to this contract, company has main purpose to generate
more revenues or profit in closing time when large number of travellers come for visiting
tourist destinations. This contract is done on the basis of volume capacity which has main
objective to utilize maximum capacity. This agreement has also some disadvantages such
as firm has to face financial losses at that time when there are coming less number of
travellers (Evans, Stonehouse and Campbell, 2012).
 Sale only contract- It is very beneficial at that time of off season. Then in this situation,
company focuses on niche market that helps to provides services to small number of
people.
4

 Rack rate- it is public price that is paid for accommodation. In this tour operators do not
keep contacts for relationships but they depends on the number of bookings which has
done for the accommodation.
 Ad hoc rate- in the Ad hoc rate, operator tries to complete their project on that price
which are written in the contract. There is no contract relationship of tour operator but he
is dependent on the number of booking done for accommodation.
After discussion of all types of contract, it is recommended that company should select
agreement after analysing all pros and cons of it and then should choose that agreement which
will helps in generating income as well as assist to survive in the market (Filby, Stockin and
Scarpaci, 2015).
2.3 Calculating cost of holiday
Holiday package for Chinese student are made by Thomson group and its cost is as
follows-
On the basis of information or data, sales price of 3-star WestCord Art Hotel is calculated
which based in Amsterdam. Selling price calculation is as follows-
Value Price in Euro and Pounds
Price per room 84 euro for two sitter
One individual's cost 42 euro
Per person cost of breakfast 11.5 euros of one person
Total 53.5 euros
Total number of students 46
Total value for 46 students 2862.25
Exchange rate €1.15 per £1
5

Rate according to exchange rate 2488.91
Number of days of holidays 7
Total sum for 7 days 17422.39
Fare of 50 seater bus 10800 pounds
Guide charges 1200 pounds
Total Sum of money 12000 pounds
Overall tour cost includes fare charges 29422.39 pounds
Profit margin of organisation 7355.5975 pounds
Total cost consists profit firm 36777.99 pounds
Cost of one student £799.52
TASK 3
3.1 Planning for making decisions to design of brochure
In Travel and tourism industry, organisation use several types of methods to promote
their products and services. Among from various media, brochure is the best method for doing
advertisement. Tour operator can use online as well as offline methods for doing [promotion of
their products or facilities. With the help of this channel, company presents their merchandise to
get attention of large number of people in an attractive way so it can helps to attain its desired
goals and objectives. (Gass and Harris, 2012). If 3- Star Arty hotel wants to achieve its specified
outcome then it must to design brochure in an attractive manner because it will helps in getting
6

pre specified goals. While designing of brochure, company has to follow some stages that are
given below- Conduct a research for planning- It is first stage that are very important for developing
a brochure for holiday package. In this step, investigator collects information about
consumers like their buying behaviour, lifestyle etc. so that brochure can be developed
according to the requirement of users and company can get attention of them.
Organisation can see its past records that will show different types of design regarding
advertisements because it helps to provide an idea of developing new packages. Writing content- In this, company writes matters that will be deliver to target market so
that they will be attracted towards company. It is advisable to the firm that it must write
that matter that can be understand by everyone easily and accurately. Written
information should contain all relevant data regarding products or services such as
features and benefits of offers etc. so that large number of visitors can attract towards it.
All information should be in bullets points and should also use heading and subheadings
clearly so that reader will not be confused while reading this (Guo and He, 2012). Write the heading- After writing contents, heading is written down but sometimes
designer does mistake by writing the name and logo of business in brochure at the top of
advertisement. It may not be a right way because everyone wants to know about offer
while purchasing goods or services. Supplier negotiation- negotiation is done by company with their supplier for providing
necessary material at reasonable prices and on time. Admin- While designing brochure design, admin roles is to ensures the effectiveness of
design of brochure or prospectus. To evaluate the content in brochure is main purpose of
this unit to remove incorrect data that may create negative perception in the mind of
target audience.
 Marketing- This department also plays an important because with the help of this,
advertisement is deliver to the consumers by which company attains its desired goals
and objectives. Team member use different ways to promote their products or services
such as billboards, electronic-brochures, print media, posters, hoardings etc. (Jaafar and
Maideen, 2012)
7

3.2 Suitability of alternatives for traditional brochure
3 Star Westcord Art hotel is using conventional brochures from long period of time.
There are two methods by which company can advertise their products which are offline and
online media. At ancient time, mostly company used offline channel in which written papers are
distributed as well as products are publicly displayed so that it helps people to know about the
company or existence of firm. But at present, now a days mostly companies are using E-brochure
for doing advertisement of their holidays package.
In today competitive environment, online method is best because it is flexible in nature
by which large number of people can attracted towards company. Its content will be decided by
operator which will be as per requirement of consumers (Kerzner, 2013). Matter should be short
so that everyone can understand it easily and accurately and will not ignore this advertisement.
This technique has various benefits which are given below-
 This media saves time as well as money of company and also presents information in
more attractive manner.
 With the help of this channel, large number of customers can be attracted because it is
circulated several media as well as social media and other online platforms which will
provide benefits to the company because at present time, everyone uses tablet,
smartphones, laptop, pc, internet and social media.
 It is eco-friendly media because it save paper which protect the environment of society.
 If in the matter of advertisement, any mistake occurs then that can be improved
spontaneously.
There are several kinds of ways that can help to prepare brochures such as Bifold, Trifold etc.
Apart from these ways more alternatives are available that can be used instead of brochure but
those are outdated and still used by companies which are as follows-
 CD-DVD's
 Canvassing
 Paper leaflets
 Television advertisement
3.3 Different methods of distribution used to sell a holiday for sustainability
There are various ways by which 3 Star Westcord Art hotel can distribute its services that
are followings-
8

 Direct sales- In this, company sells its products or services directly to the consumers that
means there is no role of intermediary such as mail order or online, conducting visits etc.
(Medlik, 2016) If firm wants to change their marketing environment then it can take
feedback from customers and accordingly can alter it which will aid the company in
achieving desired result. Hiring agents- In this, company sells their products or services with the help of that
person who has knowledge about tourist destinations and their desired places. He gets
commission from company and consumers in exchange of their services. He provides full
support to the company in serving services easily and effectively. Partners- When two or more person are working together for achieving same results and
outcomes. tour operators have partnership with hotel, transportation and famous tourist
destination as well as any organisation who involved in tour and travels sector. which
aids the company in providing best quality of facilities to its customers. Online sale services- as in the online sale services, internet plays an important role
because company sells their products or services with the help of browser. It includes
hotel, visiting destinations, e-booking of tickets etc. It helps the company to provide
services in receiving reservation (Moutinho, 2011). This media has various benefit to the
consumers as well as to the company like it saves time and money of both parties.
 Opaque distribution- it is an important and famous medium of distribution of tour
package. it refers to the process of selling the services and tour packages that includes all
the benefits that caters to the low pricing services which provided by the sellers. In this
distribution, customers get full benefit but actual marketer is not known.
9

TASK 4
4.1 Evaluating strategic decisions made by different types of tour operator
3-Star Westcord hotel is the big company in travel and tourism industry which provides
lots of variety range of goods or services. Decisions regarding strategies are those by which firms
increases its capabilities that aids it in achieving desired result or outcome. With the help of this,
firm attains price efficiency and maintains quality in competitive atmosphere. Thomson group
also made some strategic plan that are given below- Estimation of demand- It is very important aspect that should be considered by company
before making products or services. Enterprise should forecast demand to fulfil the
supply gaps as well as supply services whenever its demand in the market. to check the
gap that can occur before company's demand and supply so it needs proper planing
decision made by this group (Nakayama and Bucks, 2012). Segmentation, targeting and positioning analysis- Segmentation is a process in which
heterogeneous market is divided into homogeneous so that everyone needs can be
fulfilled. After selection of target market, tour package is made according to their
requirements so that they can enjoy their trip.
10
Source 1: Multi channel marketing, 2017

 Discount pricing strategy- It is one of the most important tactic by which consumers
become committed towards company. Thomson group adopts this strategy in non-peak
time so that it can attract visitors towards it and can generate desired result. effective
strategies can increase the number of consumers according to demands of customers. to
reach maximum number of people these discount pricing needs to be advertised
(Stolletz, 2010).
 Risk regulatory framework- For evaluating threats and risk, company should have this
framework which will help in attaining specified result. when customers do not show up
at the last time so there can be monetary loses to travel agencies as all payments are done
before hand. So company can ask for some advance payments to avoid monetary loses.
To bear the risks these framework can help.
4.2 Tactical decisions that selected by tour operator in different situations
Tactical decision is most important for an organization because it helps in making
effective operation of enterprise. These judgments are taken by company after considering
internal factors like company's strategy, employees etc. These decisions are very helpful while
taking any action regarding day to day regular activities as well as for short term problems arsing
in business strategy. This tactic is very beneficial for a company because it has various
advantages like-
 It aids in maintaining better relation with consumers as well as with other stakeholders.
 It maintains efficiency and effectiveness of company by keeping flexibility in operation.
There are some decisions which are taken by 3-Star WestCord Art Hotel that are given
below- Decision for meeting competition- Thomson group has taken some judgment by which it
can maintain competition in the market as well as can sustain competitive environment.
This decision are taken by company after analyzing strategy of competitors. Yield management- It is pricing strategy that are made after analyzing consumers
demand which has main motive to generate profit or revenues. Pricing plays an important
role in travel and tourism industry because if tour package will have lower price then
more visitors will be attracted towards it (Page, 2014). Fluid pricing- This strategy is used in travel and tourism industry in which they can
change prices up as well as down to fill the capacity at the pace that they are expecting.
11

 Increase occupancy of contracted beds- Thomson has to manage all those extra beds.
Because in certain period of time it can be high in number.
 Segmentation and positioning- Company should segment their market so that it can
make travel plans according to them. For example- Thomson group has segment their
market on the basis of demographic, psycho graphic factor (Ronen, Pliskin and Pass,
2012).
CONCLUSION
Travel and tourism industry plays vital role to develop the country because with the help
of this, financial resources increases that is invested for improving the living of standard of
society. From this report, it is concluded that from many years, this sector is growing rapidly
because now everyone wants to go at tourist destinations for spending their leisure time where
they can learn about culture. This assignment has also stated that to develop a holiday package,
tour operators have to follow some stages or processes that starts from beginning research in
which information about consumers is collected. There are various types of contracts like fixed,
sale only agreement that are decided by company according to the situation.
12

REFERENCES
Book and Journals
13

14