Thomas Cook: Strategic Decisions in Tourism

This assignment analyzes the strategic decisions made by Thomas Cook, a leading UK-based travel operator. It examines how Thomas Cook has achieved significant market share and growth through incorporating high-tech internet facilities, cost reduction measures for air travel, brand image strengthening, and enhanced service quality. The report emphasizes Thomas Cook's focus on customizing tour packages and meeting the evolving needs of customers in a competitive market.

TOUR OPERATION
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1.1 M1 Identification of recent trends and current developments in tour operations industry. 1
TASK 2............................................................................................................................................2
P2.1 M2 D1 Various stages for structuring holidays..................................................................2
P2.2 D1 Identification of different methods of contracting by tour operators............................4
P2.3 The selling price of a holiday Plan.....................................................................................5
TASK 3............................................................................................................................................6
P3.1 M3 Decision taken to design Brochure...............................................................................6
P3.2 Suitability of alternatives to a traditional brochure.............................................................7
P3.3 D2 Methods of distribution of holiday packages................................................................7
TASK 4............................................................................................................................................8
P4.1 D3 Tour Operators strategic decisions................................................................................8
P4.2 Various tactical decisions taken by Thomas Cook.............................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The tour management sector is identified as a crucial development in recent time as
holidays are an essential part of routine which needs to plan accordingly. The travel and tourism
sector includes tour operators to identify the best destination, packages and easy and enjoyable
travel experience for customers.
Every year, many travellers plan for holidays to all sides of the world with the help of
tour operators. These operators play an important role while deciding the destination and travel
package for holiday purpose so as to satisfy the over growing demand of customers. There are
different types of tour agents according to the EU package such as specialist, domestic, outbound
and incoming operators.
TASK 1
P1.1 M1 Identification of recent trends and current developments in tour operations industry.
The travel and tourism industry comprises of many segments which include planning for
lodging, transportation facilities, shopping destinations, relaxing activities such as water sports
and restaurant facilities for the travelers. The hospitality service is ever changing from recent
times as demand for holidays is growing and many people are spending for vacations to domestic
places or international destinations (Shaw, Bailey and Williams, 2011). With the advancement of
technology, communication, awareness and information flow, it has become easier for the tour
operators to widen their services overseas. Thomas Cook, a major tour operator of UK has
changed the scenario for travelers by providing the best services and operations to customers in
form of top grade destinations and travel experience. The recent development and trends are as
follows:
Globalization:
Changing conditions have forced people to travel around the world either individually or
with family, friends or spouse. In the UK, tourist arrivals from 600 in 2001 reached to 800 in
year 2005 which has enhanced foreign currency in the country to a great extent. Thomas Cook
has earned £7.8 billion revenue in the year 2016 from its tour management operations globally
and domestically (Moutinho, 2011).
Fastest booking methods:
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With the growing pace of internet, many doors have been opened to ease general public
with any information or knowledge they require. The growth of technology has helped people in
booking tickets using mobile phones, internet, call centers, etc. This implies that customers can
book tickets at any time of their convenience (Robinson, Heitmann and Dieke, 2011). These
trends have affected tour operator’s overall revenue as users are gaining more knowledge in
choosing right package for their holidays.
Diversity:
Tourism industry is one of the most diverse unit as it involves employees and customers
which is keenly interested in hospitality function. The tour operators deal with diverse groups,
religion and culture as well as provide services which suits every person.
Technology:
The emergence of technological development has provided endless opportunities to both;
travelers and tour operators. The tour management is responsible for providing excellent services
and products as the trends are changing with growing use of internet. Consumers are now
actively participating in deciding for themselves the best possible services and product designing
(Thomas, Shaw, and Page, 2011). Effective use of technology has provided travelers with all the
necessary information and enhanced decision-making for holiday planning.
Demographic changes:
Demographic changes implies the ways society work and react and it includes total
population irrespective of wealth and status. It has impacted the tourism industry as demand is
increasing with the growing technology and spending power of population. The aging of UK
population has seemingly influenced traveling so as to make use of hospitality services.
Destinations:
The tour operators now a days advertised on internet by posting images of destinations
which influence customers to travel to such destinations. Advertisement is done on a large scale
so as to attract huge population in a cost effective manner. This is done through posting of photos
of scenic places, hotel rooms, restaurant area and even massage centers.
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TASK 2
P2.1 M2 D1 Various stages for structuring holidays.
Different steps should be undertaken by Thomas Cook while planning for holiday
package for UK people:
Research:
Main objective while planning for holiday is to make an analysis about the destination
and its major attributes (Moutinho, 2011). Thomas Cook has identified various crucial points to
be undertaken while deciding for a destination holiday from London, UK to Italy, Rome for
sight-seeing and shopping purpose. The company examined:
 Various political, economic and cultural stability which might affect the tourist plans,
 Extensive research about the market for tourism purposes,
 Identify major tourist spots and analyze its climatic conditions, Analyze availability of vendors or suppliers for meeting the needs of customers in terms
of hospitality.
Capacity planning:
This step involves creation of overall itinerary for the journey. It involves looking for
accommodation in respectable hotels with minimum cost, different restaurants and cuisines for
customers. It focuses on deciding essential ingredients such as departure point, assembling point,
duration of vacation, etc. Thomas cook is providing traveling services for many years now and
knows hoe to deal with different aspects and situations (Conrady and Buck, 2011).
Financial evaluation:
This is a crucial step where tour packages rates are determined and finalized. It involves
planning for total cost of package while determining exchange rate by tour operators. Since
Thomas Cook has identified tour package few months ago to Italy, the company might face some
risks of changes in exchange prices, payments made to hotels, airplane agencies and various
other destinations. The company takes into consideration either market based pricing strategy
such as backward, penetrating, differential and skimming or cost based pricing strategy which
includes rate of return, mark-up, product cost and total cost (Buckley, 2011).
Marketing:
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Thomas Cook has undertaken marketing of its leaflets, brochures through advertising and
promotion based on internet websites which has images of different destination, hotels, massage
corners, restaurants with pricing strategy to influence consumers. The company target users and
market its product efficiently so as to provide better selling experience. The company focuses on
identifying needs of customers and then plan the services tailored accordingly.
Administration:
The company needs to recruit staff during vacation season to assist in promotion services
and attracting consumers to design their tour from them. The responsibility of additional staff is
defined and roles and duties are given for carrying out administrative work. The company has
done proper reservation for airlines, buses etc so as to have an amazing experience for people
traveling to Italy (Conrady and Buck, 2011). Documentation and accounting work is also done
by the staff personnel.
Tour management:
Lastly management of overall tour is done by the customer care people by continuously
updating customers about departure time and their duties. The tour operator needs to identify the
market conditions prior to traveling to Italy.
Time Scale
Purpose of Tour: For Sightseeing Location of Tour: Italy, Rome
Departure Date: 10.12.2018 Duration: 1 week
Places to visit: Colosseum, Leaning tower of Pisa, Amalfi Coast, Roman Forum, Trevi
Fountain, Pantheon, San Marco, Florence Cathedral, Uffizi Gallery.
Total Cost: £2770 includes hotels, restaurants, bus and airplane expenses, food and sightseeing.
P2.2 D1 Identification of different methods of contracting by tour operators.
The tour operators cannot mange everything from planning to its execution. It needs help
from other sources to aid in package planning. Thomas Cook goes into contract with various
suppliers and agents who provide services to company in form of airlines traveling, contracting
with local suppliers at Italy for sightseeing purposes (Buckley, 2011). The comp-any provides
all facilities to its customers whether traveling internationally or domestically or to foreign
tourist visiting country.
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Inbound Operators:
The company provide inland services to foreign tourist in form of their accommodation,
traveling places, exchange of currency facilities, entertainment points and sightseeing
destinations (Shaw, Bailey and Williams, 2011). Thomas Cook provides these facilities to
foreign tourists with additional insurance and information amenities thereby safeguarding their
culture and interest. It usually displays the itinerary on its websites for users perusal.
Outbound Operators:
Thomas Cook have specialized in preparing tour packages for foreign travelers and
selling and advertising the packages on their official websites for customer reviewing. These
services includes planning each essential ingredients for customers going to Italy, their residence,
food availability, sightseeing facilities, departure and arrival time etc. The company plan
specifically for customers in tour package including all details and cost of travel and contact
information of agents and suppliers in the native town with whom the company is working.
 Bed contracts: The tour management team at times of vacations usually buys beds for
their guests at a particular hotel or any other place on a return basis after the specified
time period. Only average hotels do such a contract with tour operators which is a
bargaining process. The hotel management is now responsible for taking care of tour
operators guests with proper services and cleanliness checked by the housekeeping
department. Contracting transportation: This involves making contracts with transportation
agencies such as aircraft, buses etc. during seasonal times by hotel management team. It
also involves booking of specific flights which will take into consideration tour operators
guests only. It can also be done by buying a block of seats for the guests travelling
through a particular tour operator.
Ground Operators:
It includes all those individuals who handle services at the point of destination. It mainly
comprises of locals and residents of the tourist destination. It includes the different vendors
company is working with to provide details and arrangements for accommodation, hospitality
service, buses, rental cars or bikes and restaurant facilities (Thomas Cook Group, 2013).
Domestic Operators:
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All those tour operators who work only domestically providing tour facilities to residents
of a particular country are known as domestic tour operators. The company provides local and
domestic tour facilities as well thereby assisting customers right destination and tour cost and
package.
P2.3 The selling price of a holiday Plan.
The selling price is calculated by adding all the costs that will incurred while traveling. It
mainly includes traveling expenses in form of exchange rate, market imbalances in future,
natural calamities, discounts and financial risks. The airline company charges as well as vendor
charges are also added in total cost of package (Tourism Management, 2014). The pricing of the
package is a very crucial step as it involves deciding on various factors and price fluctuations in
future. Thomas Cook has decided the trip to Italy which includes 20 members comprising of
individuals, family and friends for sightseeing purpose. The different components essential for
planning a trip includes
flight reservation charges, hotel arrangements and accommodation, food and beverages and
rental vehicles.
Sr. No. Package details Price per Person (in Lira) Total Cost
1 Aircraft Charges 70 1400
2 Transportation Charges 1050 21000
3 Hotel Charges (6 days) 750 15000
4 Food and beverages 350 7000
5 Sightseeing Charges 500 10000
6 Miscellaneous Charges 50 1000
7 Total Cost 2770 55400
The total cost to company will be = 55400 British pounds
add: 15% profit margin = +8310
Total Selling price = 63710 pounds
The company has earned clearly 15 % profit on the overall tour package which has leveraged its
position in the market.
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TASK 3Tourism Management. 2014.
P3.1 M3 Decision taken to design Brochure.
With the growing technology tour companies are emphasizing on exclusive designing of
their brochures as it plays a vital role for marketing for tourism companies. Thomas Cook is
taking decisions for enhancing its brochure structure and design to influence customers. The
brochures helps to indicate the companies quality services and products offered to travelers. It
helps in depicting various points about the holiday destinations, their images, posts and photos of
travelers visited through the company etc. All the strategic decisions of tour operators should be
underlined in the brochure. The usage of brochures is to make the potential travelers aware of
various options provided by the operator. It is helpful in exhibiting, persuading and encouraging
the customers to opt for the holiday packages provided by company (Thomas Cook Group,
2013). Thomas Cook brochure includes all relevant information essential for travelers such as
Name and address of the company.
Contact Information of company- Mobile no of person associated with the brochure
Details of travel destinations – Description of trip destination and various places of stop.
Traveling duration and plan – No of days journey details as well as traveling days.
Mode of Transportation – The mode to be used in the city and to the destination.
Accommodation plan – Name and information of the hotel and information about meals and
cuisines .
Cost of Package – Overall cost of package with including taxes.
The brochure should be divided into sections and provide all the above essential and authenticate
information with contact information and address (Romero and Tejada, 2011).
P3.2 Suitability of alternatives to a traditional brochure.
Thomas Cook uses a wide variety of alternatives to promote its holiday packages using
brochures in magazines as well as on its official website. The traditional method of sending
brochures to companies, offices, newspapers and magazines has now changed with development
of technology. Now companies promote their products and services using advertisements ,
campaigns and word of mouth selling. The growing need of technology changes focus of the
company to internet based promotions and advertisements which influences customers to plan
for holidays which has modified traditional ways of promotion to new and modern methods of
advertising (Thomas, Shaw and Page,2011). The company has designed its website free from any
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jargon's, detailed structure of every information is clearly given. The new methods for promotion
by Thomas Cook includes-
E-Brochures/Online Brochures:
Internet has become an integral part of every human being and business. Due to an
increase of web portals tour operators are becoming more and more tech savvy by marketing and
promoting their products on Net rather than using the traditional sources (Mowforth and Munt,
2015). The tour operators are now focusing on ways of promotion through E-brochures
displaying on tourism websites thereby reducing the cost and wastage of papers used in
traditional ways of brochure selling.
Audio-Visual Brochures:
Another form of modern method of advertising includes visual display of brochure which
gives all details about the travel destination, price, duration, name of trip operators etc. This
helps in creating an image in the minds of customers about the quality of products and services
tour officials are selling. The video with all details recorded helps reduce time of reading which
enhances the influence of customers thinking to plan holidays (Robinson Heitmann and Dieke,
2011).
P3.3 D2 Methods of distribution of holiday packages.
The creation of brochures should next be accompanied with sending of brochures to
different persons, companies or uploading on official websites, social media etc. Distribution of
tour operators brochure is a crucial task undertaken either through selling directly or by
employing others for the purpose of distribution. Thomas Cook uses the Omni channel for
distribution of its brochures to retail store, call centres, websites and others. TUI travels do direct
selling of its brochures which has minimal cost as compared to other channels of distribution. At
times these tour operators employ various agencies for distribution of brochures to different
variants (Moutinho, 2011). These agents then mail the company brochures to all related
prospects which is being maintained by the agencies. The use of call centres is another method of
distribution of brochures done by both the tour operators.
Amongst both tour operators, I would recommend Thomas Cook since it is using
traditional forms as well such as retail store along with internet facilities for distribution of
holiday packages to customers. The company send newsletters and brochures to its previous
customers as well which may promote by word of mouth publicity. Using of online marketing is
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of utmost importance to the company because it has minimum cost thereby producing maximum
benefit for trip advisers. The e-brochures provide facility of tailoring brochures according to
needs, religion and culture of customers which gives an essence of personalize.
TASK 4
P4.1 D3 Tour Operators strategic decisions.
Every tour operator rather Thomas Cook or TUI travels need to make many strategic
decision for efficient and effective working. They need to consider economic and other factors
while deciding its price strategy, company size and scope and its operations. Both operators
consider various aspects while determining strategic decisions.
Segmenting, Targeting and Positioning:
Tour operators identify the market segment they want to focus, determine the target
customers they are emphasizing on in an efficient manner which will help in positioning its
product likewise (Buckley, 2011). Thomas Cook segments its market based on geographic and
demographic aspects by evaluating the lifestyle of consumers and their spending power.
Tour packages:
Trip advisers packages differ from season to season and from consumer to consumers
depending upon their luxuries and desires. Thomas Cook devise varied types of plans and
procedures for different customers satisfying their needs and desires (Conrady and Buck, 2011).
Competitive pricing strategy:
Tour operators needs to implement strategies for pricing of products based on fulfilling
the desires as well as making profit for the company. Thomas Cook uses differentiating pricing
policy which is identified by evaluating customers and competitors virtue. Such strategies makes
firm earn competitive advantage over others.
Sales promotion using innovation:
Promotion plays an important role for tour operators whether TUI travels or Thomas
Cook. Advertising exclusively and innovatively boost up the sales ratio of these companies as
they attract many customers both new and previously traveled. Thomas Cook is engaged in
extensive promotions using internet e-brochures, retail store, call centres, print and electronic
media (Moutinho, 2011).
Price negotiation:
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Customers usually believe in discounting of prices with tour operators and fixed prices
are never aim of tour operators. It is considered to be a major factor for influencing customers by
offering discounts or negotiating of tour packages.
P4.2 Various tactical decisions taken by Thomas Cook.
Thomas Cook is involved in making tactical decisions for company so as to maintain
competitive advantage in the market. For smooth and flexible working tour operators make
decisions such as negotiation with vendors, transportation arrangement and facilities as well as
hotel and motel accommodations (Tourism Management, 2014). The traveling operators has a
huge market which is increasing in today's time posing threats for companies to design plans and
operations that are budget friendly and best suits the needs and desires of different people.
Thomas cook has evolved a lot in these years thereby creating a position in market through
designing its brochure creatively and by using various channels of distribution different from
traditional methods to forming tactical decisions for company has given it a large market share
and tremendous growth.
Thomas Cook has identified various areas so as to enhance its productivity which
requires making tactical decisions such as incorporating high-tech internet facility, lowering cost
of air travel, strengthening brand image, enhancing service quality to its customers. The
company provide facilities to different people around the world which brings in foreign
exchange for the company. It needs to set profit margin so as to keep abreast amongst
competitors by developing strategic decisions for pricing of tour packages (Tourism
Management, 2014).
CONCLUSION
The report shows the growing demand of tour industry thereby bringing huge benefits for
society and economy. Tour operators are using highly technically devices and modern marketing
strategies for promotion of their business. Thomas Cook leading trip operator of UK has evolved
its services by using internet based operating system for designing and distribution of brochures
and planning effectively by meeting growing needs of customers. They are working on many
areas to provide better facilities and services to customers. The company focuses on creating a
unique time scale by focusing on various stages and enhancing the price package by customizing
it according to customers.
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