Tour Operations Management: A Comprehensive Analysis of the Industry

This report delves into the intricacies of the tour operator industry, examining current trends, strategic decisions, and marketing strategies. It analyzes the stages involved in developing holiday packages, evaluates different contracting methods, and explores alternative marketing approaches beyond traditional brochures. The report also investigates the suitability of various distribution methods for selling holiday packages, using real-world examples of tour operators like Trailfinders, Thomas Cook, and Kuoni. By providing a comprehensive overview of the industry, this report aims to shed light on the complexities and challenges faced by tour operators in today's dynamic market.

TOUR OPERATIONS MANAGEMENT

Table of Contents
INTRODUCTION..........................................................................................................................2
Task 1..........................................................................................................................................3
1.1 ANALYSE THE EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON
THE TOUR OPERATORS INDUSTRY.........................................................................................3
TASK 2.........................................................................................................................................6
2.1 ASSESS THE STAGES AND TIMESCALES INVOLVED IN DEVELOPING HOLIDAYS...............6
2.2 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF CONTRACTING FOR
DIFFERENT COMPONENTS OF THE HOLIDAY AND DIFFERENT TYPES OF TOUR OPERATOR. 9
2.3 CALCULATE THE SELLING PRICE OF THE TOUR PACKAGE AND THE PRICE PER PERSON
..............................................................................................................................................10
TASK 3.......................................................................................................................................11
3.1 EVALUATE THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A SELECTED
BROCHURE...........................................................................................................................11
3.2 ASSESS THE SUITABILITY OF ALTERNATIVES TO A TRADITIONAL BROCHURE FOR
DIFFERENT TYPES OF TOUR OPERATOR...............................................................................14
3.3 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF DISTRIBUTION USED TO SELL
A HOLIDAY FOR DIFFERENT TYPES OF TOUR OPERATOR.....................................................15
TASK 4.......................................................................................................................................17
4.1 EVALUATE THE STRATEGIC DECISIONS MADE BY DIFFERENT TYPES OF TOUR
OPERATOR............................................................................................................................17
4.2 COMPARE THE TACTICAL DECISIONS THAT COULD BE TAKEN BY A SELECTED TOUR
OPERATOR IN DIFFERENT SITUATIONS................................................................................19
CONCLUSION............................................................................................................................21
REFERENCES.............................................................................................................................22
1

INTRODUCTION
Travel agency and tour operators' contribute a major role as packagers and planners of
several destinations focused and travel services. A tour operator is a business activity which
is a combination of various activities that includes the preparation of the tour packages. This
assignment will focus on the working of the tour operator business and their different types
of their products and services (Mok, et al. 2013). An understanding of the recent and
current developments in this industry will also be discussed. Also, there will be the analysis
of the tactical and strategic decisions which are required for the developing the skills of the
decision making. Further part of this assignment will focus on the contribution of the
brochures against the new techniques of the promotion of the holiday packages. At last the
assignment will throw light on the different methods of the distributions which are being
used by the tour operator for selling the holiday packages.
2

Task 1
1.1 ANALYSE THE EFFECTS OF CURRENT AND RECENT TRENDS AND
DEVELOPMENTS ON THE TOUR OPERATORS INDUSTRY
The role of the tour operator in the tourism business is to combine all the components
such as lodging, meals, tour guides, transportation etc related to travel and tourism in
order to provide a memorable experience to tourists and visitors. Trailfinders Ltd aims to
provide their customers with all the efficient travelling facilities thereby exceed the
expectations of its customers.
Fig 1 Holiday trends in Britain from 2013 to 2017
[Source: Holiday Habits Report 2017]
TYPE OF TOUR OPERATORS
Inbound tour operators: the services are offered by these operators to the foreign
visitors starting from their arrival to their departures by playing a crucial role in image
brand and revenue maximisation for the country (Frey and George, 2010).
Outbound tour operators: services are provided by these operators to local people in
foreign countries by collaborating with inbound tour operators in visiting countries.
Domestic tour operators: services are provided to the local people who visit heritage
and cultural locations within the boundary of the country thereby promoting national
integrity (Frey and George, 2010).
3

IMPACT OF CURRENT DEVELOPMENTS AND TRENDS ON THE TOUR OPERATORS IN
TOURISM BUSINESS
Customisation: in past, the tour operators in tourism business used to design the tour
packages in the standardised format (Baddeley and Font, 2011). However, due to recent
changes in technology and desires and preferences of the customers, different tour
operators such as Trailfinders Ltd have opted to customise their services considering the
preferences of the customers by making modifications in their tour packages.
Horizontal Integration: horizontal integration in tourism business is referred to the
merging and acquisitions made by the tour operating companies such as Trailfinders in
the same industry to eliminate competition (Baddeley and Font, 2011).
Vertical Integration: vertical integration in tourism business is referred to collaboration
or investment in the different assorted business at different levels. Tour operators such
as Trailfinders collaborate with transport companies or hostel chains to make backward
vertical integration and invest to procure or acquire travel agencies to make forward
vertical integration.
Responsible Tourism: this is the new concept in the tourism business as every
stakeholder in the tourism industry has the responsibility to minimise the negative
effects of social, economic and environments impacts on the tourism business thereby
enhancing the well-being of the host community (Baddeley and Font, 2011).
Fig 2 Online Booking Devices & Mobile Phone Bookings By Age
[Source: Holiday Habits Report, 2017]
ROLE OF TRADE BODIES IN TOURISM INDUSTRY
4

ABTA: ABTA is an acronym for Association of British Travel Agents which is the largest
travel association in the UK that provides their advice or expertise to the tour operators
for designing their tour packages. They provide their assistance in resolving the issues to
tour operators in the tourism business.
FTO: Federation of Tour Operators work on improving and making changes to the areas
in order to impact overseas holidays and be the point of contact for a destination on the
issues of UK outbound tour operators for destination governments (Mak, 2011). It was
merged with ABTA in 2008.
UK CAA: the civil aviation authority of the UK is a statutory corporation that overseas as
well as regulates all the related aspects of civil aviation by supervising civil aviation flying
unit, maintaining and training Air Traffic Engineers at CAA Colleges of
telecommunications and engineering, managing security standards at Directorate of
aviation Security and overseeing the national protection scheme for customers abroad
for ATOL license of Travel companies in UK (Mak, 2011).
AITO: association of independent tour operators is an umbrella organization for 122 best
independent operators of Britain. These members are specialized in providing
personalised advice by concentrating on choice, service and quality to provide high
customer satisfaction (Mak, 2011).
5

TASK 2
2.1 ASSESS THE STAGES AND TIMESCALES INVOLVED IN DEVELOPING
HOLIDAYS
The stages of developing the holidays by Trailfinders are given below:
Exploration of Market and Destination: in order to develop educational tours of adult
students, Trailfinders Ltd needs to explore and search for the educational locations and sites
at Brussels and Brugge in Belgium.
Tour Itinerary Development: proper planning and scheduling are to be done by the
members of Trailfinders Ltd in order to successfully operate, manage and complete the
educational tour designed for adults students for 5 days. It represents sequential tour
ingredients that include essential information such as assembling point, departure date,
tour duration, departure point, legal requirements, meals and other activities and so on
(KhairatP0F and Maher, 2012).
Negotiation with Intermediaries: competitive pricing is to be derived by Trailfinders Ltd
while negotiating with the suppliers and mediators who provide different services resulting
in satisfactory quality-price ratio.
Financial Evaluation, Pricing and Costing of Tour Package: cost sheet is to be designed by
Trailfinders Ltd to determine the cost of holiday package and also consider the pricing
approach such as cost-oriented or market-oriented in order to shape the individual needs
and also fix profit margin (KhairatP0F and Maher, 2012). It also needs to focus on financial
risks such as exchange rates, estimated future selling prices, pricing strategist of competitor
etc.
Administrative Staff: staffing in tourism business highly depends on the season. Tour
operators such as Trailfinders Ltd appoint resort staff; sales representative, international
agents and so on based on part-time or full-time to effectively perform their activities and
responsibilities.
Tour Market Plan Development for Marketing Tour Package: the demand among the adult
students regarding the educational tour packages can be effectively developed by using
different marketing strategies by tour specialists at Trailfinders Ltd. Marketing strategies, as
6

well as budgets, are to be identified by Trailfinders Ltd by adopting s properly structured
and systematic tour marketing plan in order to enhance the returns (KhairatP0F and Maher,
2012).
Marketing Inbound and Outbound Tours: as international tour marketing is difficult and
complex activities, various inbound and outbound tours need to be directly market or sell
them to the travel agencies.
Brochures of Tour Operators: comprehensive information regarding the tour packages such
as educational tour for adult students should be contained in the brochure in order to
persuade or motivate potential students to purchase the educational tour packages
(KhairatP0F and Maher, 2012).
Operation and Execution of Tour: tour manual and guidelines are to be followed by the
staff of tour operators such as Trailfinders Ltd to effectively operate and handle tour by
concerting promises into realities.
Post Trip Management: several reports are to be prepared by the tour operator such as
Trailfinders Ltd to evaluate the success through comparative analysis of the perceived goals
along with other statistical tools to obtain the accurate result (KhairatP0F and Maher, 2012).
7

TIME SCALE- GANTT CHART
Particulars Time scale
2
weeks
4
weeks
6
week
s
8
weeks
10
weeks
12
weeks
14
weeks
16
weeks
18
weeks
Exploration of
Market and
Destination
Tour Itinerary
Development
Negotiation
with
Intermediaries
Financial
Evaluation,
Pricing and
Costing of Tour
Package
Administrative
Staff
Tour Market
Plan
Development
for Marketing
Tour Package
Marketing
Inbound and
Outbound Tours
Brochures of
Tour Operators
Operation and
Execution of
Tour
Post Trip
Management
8

2.2 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF
CONTRACTING FOR DIFFERENT COMPONENTS OF THE HOLIDAY AND
DIFFERENT TYPES OF TOUR OPERATOR
Trailfinders Ltd needs to evaluate the suitability of different contracting methods for various
components of tour operators:
TRANSPORTATION: the existence of tourism industry is based on transport. It is essential for
the tour operators such as Trailfinders to adopt fixed contract method for contracting with
airline companies and other travel agencies. As the tour operator is planning for an
educational tour at Brussels and Brugge in Belgium, fixed contracting would be beneficial for
the company in order to get maximum discounts and class facilities at reasonable prices
(Cole and Morgan, 2010). Hence Trailfinders need to sign an agreement for a fixed contract
with the local transport services considering all the cost related to parking, driver, fuel and
toll charges and so on.
ATTRACTIONS: fixed contracts are to be made with the tourist guides in various locations in
various countries to explore the sceneries and sights. Payment for the tour guides is to be
fixed by paying lump sum amount irrespective of the education sites visited by the students
(Duffield, 2014). If the tour operators do not decide in advance about the locations to be
visited then fixed contract method will not be suitable for the guide as the guide will be
unwilling to take students to more places.
HOTELS: variable contracts such as sale only contracts are the suitable contract method
which is based on the occupancy of students. The stay of the students will not be limited to
one location as the students will travel to other locations as well (Mowforth and Munt,
2015). Separate contracts are to be made with different hotels in Brussels and Brugge.
Similarly, for meal facility, variable contracts are to be signed by Trailfinders for food supply
by different vendors in different locations of Brussels and Brugge.
9

2.3 CALCULATE THE SELLING PRICE OF THE TOUR PACKAGE AND THE
PRICE PER PERSON
Selling price of tour package is calculated below for an educational tour designed by
Trailfinders Ltd that includes 40 adult students along with 2 drivers and 1 tour manager
from London, UK to Brussels and Brugge, Belgium in August 2019:
The exchange rate of the room for 1 individual (€1.15= £1) = €90 / €1.15
The exchange rate of the room for 1 individual = £78.26 (as the assumed cost of the room
for 1 night)
Cost of Local tour guide= €920/ €1.15 = £800
Particulars Cost Cost for 43 members
(including 40
students, 2 drivers
and 1 tour manager)
for 5 nights (£)
Cost per person (£)
Hotel Cost £78.26 per person
twin sharing
(43*78.26*5)
16,825.9
(78.26*5)
391.3
Cost of Luxury
Coach
- 7,400 172.09
Cost of Local Tour
Guide
- 800 18.60
Total Tour Cost - 25,025.9 581.99
Margin of Profit
(30%)
- 7,507.77 174.59
Actual Selling Price - 32,533.67 756.58
Hence the cost of tour package for 43 members (including 40 adult students, 2 drivers and 1
tour manager) = £25,025.9 and for 1 person = £581.99
Profit margin for tour (30 Per cent) = £7,507.77 and for 1 person = £174.59
10

The actual selling prices of the tour package = £32,533.67 and selling price per person =
£756.58.
TASK 3
INTRODUCTION
The aim of this management report is to review the brochure and assess the alternatives to
methods to the traditional brochure to recommend the appropriate methods for an
educational tour. It also evaluates the different methods of distribution that is both
conventional and non-conventional methods in order to identify the most appropriate
method of distribution.
3.1 EVALUATE THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A
SELECTED BROCHURE
Various methods are adopted by the tour operators to market or advertise their tour
packages. Among them is brochure which is one of the efficient marketing tools used by the
tour operators for promoting their holiday packages (Ashworth and Page, 2011). Following
issues are to be considered to design the brochure for education tour in August 2019:
COST: the expenses such as printing, distribution media, paper use, designing and so on is to
be considered while determining the cost or budget for a brochure by the tour operator
(Giaoutzi, 2017).
FORMATTING AND STRUCTURING: systematic formatting of the brochure helps in including
all the relevant information regarding educational tour and company. The size of the
brochure should be convenient to represent all the touring related information. The style of
the brochure should be such that a large number of adult students is attracted by its design
and specifications (Giaoutzi, 2017). Colour, content, font size and theme are to be
considered while designing the brochure. The folds of the brochure should be an orderly
format. Appropriate selection is to be done for paper and its quality in order to complement
the message to be conveyed through the brochure.
11

TARGET MARKET AND BUDGET: the target market is to be set and budget is to be
determined to produce the brochure (Butler, 2014). For example for an educational tour of
Trailfinders Ltd, the target market is adult students in high school and above.
PRINT SPECIFICATION: print specification determines the quality of printing, print run, and
colour combinations, graphical design layouts, file formats and other specification.
TIME AND STAGE OF PRODUCTION: the stage of production can be helpful in determining
the type of brochure (Butler, 2014). New tour operating organizations need to develop
attractive brochure however existing business needs to introduce brochure with all the
related information.
Fig 3 Brochure
[Source: https://www.leger.co.uk/content/our-brochures]
12

Fig 4 Brochure
[Source: https://www.amawaterways.com/river-cruise-brochures]
13

3.2 ASSESS THE SUITABILITY OF ALTERNATIVES TO A TRADITIONAL
BROCHURE FOR DIFFERENT TYPES OF TOUR OPERATOR
Trailfinders Ltd can also identify the alternative to a traditional format that has been
developed because of the development of technology. Some of the non-traditional
alternatives are given below:
VIDEO: videos can be made and uploaded on the social media platforms such as Facebook,
Twitter, Instagram and so on which can be helpful in advertising and promoting the tour
packages such as educational tours offered by Trailfinders Ltd. The websites of the tour
operators such as Trailfinders attract a large number of customers by persuading them to
watch the video and select tour package (Akoumianakis, 2014).
INTERNET: e-brochures and email are some of the commonly used tools by tour operators
to advertise and promote the tour package information (Irwana Omar, et al. 2014). The
mobile application is the new method to promote its holiday tours.
INTRANET: intranet helps the employees to make their travel arrangements by accessing
their private networks with special passwords provided by the tour operators such as
Trailfinders Ltd.
CD: all the information along with image or graphics are recorded in the CD and distributed
to potential customers. Customers can watch the content of CD and make a decision
regarding their selection of tour packages (George, et al. 2010). It also includes the detailed
information including contact numbers and email id about all the branches of tour
operators.
TELEVISION: television is the most common form to advertise the tour packages that can be
accessed by the potential travellers for information as it allows the opportunity to target a
large number of customers (George, et al. 2010).
14

3.3 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF
DISTRIBUTION USED TO SELL A HOLIDAY FOR DIFFERENT TYPES OF TOUR
OPERATOR
Trailfinders limited need to evaluate the suitability of different distribution methods given
below, which can be used by them to sell the tour package by a different type of operators:
CALL CENTRES: the customers and potential travellers are contacted by the call centre by
asking their requirements and desire to visits any location and offer them tailor-made
attractive offers to be purchased by these customers (Ashworth and Goodall, 2013).
AGENCIES online and offline agencies are available to contact a large number of potential
visitors in order to sell appropriate tour package required by them (Ashworth and Goodall,
2013).
INTERNET: the internet is the most common and fast medium to connect with the potential
customers by effectively distributing the holiday packages to be purchased by the visitor or
tourists.
TELETEXT: email, mobile application, digital hoardings and banners helps in transmitting the
essential information to a large number of customers which helps in selling the tour
packages offered by tour operators (Ashworth and Goodall, 2013).
TELEPHONE: telephone is also an effective medium to distribute the tour package however
it is replaced by mobile and also helps in getting a real-time response from the potential
customers.
DIRECT SELL: this is the most common medium to be adopted by the tour operators to
target their potential customers by influencing them through face-to-face communication.
However, customers are less inclined towards the information being received through this
method (Ashworth and Goodall, 2013).
15

CONCLUSION
Thus it can be concluded from this report that that television and internet mediums are to
be adopted by Trailfinders Ltd to promote their tour packages. also, internet and agencies
are the two appropriate distribution methods for Trailfinders to promote their educational
packages to adult students.
16

TASK 4
INTRODUCTION
This part of the assignment will focus on the different tactical and strategic decisions made
by the different kind of the tour operators in context with the Thomas Cook and Kuoni tour
operators. Kuoni is a travel company focuses on providing several services which include
cruise lines, charter passenger airline package holidays and accommodation etc. While
Thomas Cook is a British based Travel Company which has owned a various number of tour
operator within them (Pettigrew, 2014).
4.1 EVALUATE THE STRATEGIC DECISIONS MADE BY DIFFERENT TYPES OF
TOUR OPERATOR
There are several strategic decisions which are undertaken by the tour operator like Thomas
Cook and Kuoni with the aim of the smooth functioning of the tour operators (Couper, et al.
2017). Following are the strategic decisions need to take by the Thomas Cook and Kuoni:
Strategy for creative promotion: Creative promotion strategies are used by the Thomas
Cook and Kuoni in this age for promoting the sale with the help of the recent technology-
based methods. Marketing managers of Thomas Cook and Kuoni is having the experience to
develop the tour packages for enhancing the sale of the packages (Abrate and Viglia, 2016).
Travel agents’ distribution: Distribution decisions are taken by the Thomas Cook and Kuoni
by selecting the appropriate supply chain methods. Brochures are also being sold with the
assistance of the agents by the Thomas Cook and Kuoni which will minimise the cost of the
distribution. And it will lead to the use of the effective method for sales production with the
help of the brochures distribution (Couper, et al. 2017).
Positioning: It is also a strategic decision taken by the Thomas Cook and Virgin in which
positioning of the service and products is done for the normal and premium ranges. Thomas
Cook uses the premium positioning while the Kuoni uses the normal positioning for their
products and services (Abrate and Viglia, 2016).
Pricing strategy: Thomas Cook is using the fixed price contract which ensures the nominal
cost of the contract. This help to the Thomas Cook for providing the discounts to their
customers in the services like tour holiday packages. While Kuoni uses the promotional
pricing strategy for the promotion of their sale. They include factors like the discount
17

provided and other sales promotion offered by the Kuoni for the promotion of their
products and services Course, 2015).
18

4.2 COMPARE THE TACTICAL DECISIONS THAT COULD BE TAKEN BY A
SELECTED TOUR OPERATOR IN DIFFERENT SITUATIONS
These types of the decisions are taken by the Thomas Cook and Kuoni for surviving only and
do not involve so much process of the decision making. It includes the responses from the
industry in the case of the high completion and price wars.
Following are the decisions which are being taken in context with the Thomas Cook and
Kuoni:
Decisions for facing the competition: Competition has the direct impact on the pricing used
by the Thomas Cook and Kuoni which attracts the customers. Thomas Cook takes the
tactical decisions in order to gain the competitive advantages by improving the quality of
the product, offering the discounted prices etc. while the Kuoni focuses on the providing
various benefits and advantages for facing the competition (Nieves and Segarra-Cipres,
2015).
Decisions taken for managing the technological and social changes: Tour operators like
Thomas cooks and Kuoni used the recent technology and trends for increasing the demand
for services and products in the market. Various decisions have to take by the Thomas Cook
and Kuoni for the adoption of the latest technologies in order to survive in the competitive
market and for minimizing the cost (Nieves and Segarra-Ciprés, 2015).
Decisions related to the utilization of the resources: Thomas Cook and Kuoni take the
tactical decisions for the optimum utilization of the resources. They are focused on the
minimum wastage with the good output (Hair, et al. 2014). Thomas Cook aims at the
contracting with the limited number of agents on a permanent basis so that the hotel and
accommodation do not be left vacant. While the Kuoni focuses on the investing in the small
number of the hotels and restaurants and buy at the time of need (Benur and Bramwell,
2015).
Activities affecting the Fuel prices: Thomas Cook and Kuoni need to take the decisions for
managing the costs and funds of the company. The fuel prices are increasing day by day so
they need to focus on the designing the tour packages that can cover the cost of the fuel
prices. Also, they have to focus on the decisions related to increasing the sale of the Thomas
Cook and Kuoni for covering all costs and earn profits (Benur and Bramwell, 2015).
19

Conclusion
It can be concluded from this report that Thomas Cook and Kuoni are engaged in taking
many decisions for gaining competitive advantages and to survive in the market. These
decisions will allow both the tour operators to grab the opportunity and tackle the
challenges of the market.
20

CONCLUSION
From the above assignment, it can be concluded that the tour and travel industry is growing
rapidly which is engaged in the better management of the tour operators and following the
recent developments in the industry. The timescale has been prepared with the description
of phases involved in preparing the tour packages. Evaluation of the methods of contracting
for the different elements of the tour packages has been done. Further the last part of the
assignment focused on the preparation of the report which has described the strategic and
tactical decisions taken by the different tour operators.
21

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