Tour Operations Management: A Comprehensive Guide to the Industry

This comprehensive guide delves into the intricacies of tour operations management, exploring current trends, development stages, contracting methods, brochure design, distribution strategies, and strategic and tactical decision-making. It provides a detailed analysis of the tour operator industry, focusing on the challenges and opportunities presented by the evolving tourism landscape. The report examines the impact of recent trends on the industry, including the rise of e-commerce, environmental awareness, and responsible tourism. It also explores the stages involved in developing holidays, evaluating the suitability of different contracting methods for various components of a holiday package. The report further analyzes the planning decisions involved in brochure design, assessing the effectiveness of alternative brochure formats and distribution methods. Finally, it examines the strategic and tactical decisions made by different types of tour operators, highlighting the importance of adapting to changing market conditions and customer preferences.

TOUR OPERATIONS MANAGEMNET

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Contents
Introduction....................................................................................................................................3
Task 1..............................................................................................................................................4
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry.....................................................................................................................4
Leaflet.........................................................................................................................................4
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................................................................7
2.3 Calculate the selling price of a holiday from given information below..........................8
Task 3............................................................................................................................................10
3.1 Evaluate the planning decisions taken for the design of a selected brochure..............10
3.2 Assess the suitability of alternatives to a traditional brochure for different types of
tour operators and recommend the most appropriate for your tour package..................11
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of tour operator and recommend the most appropriate for your tour
package.....................................................................................................................................12
Task 4............................................................................................................................................14
4.1 Evaluate the strategic decisions made by different types of tour operator..................14
4.2 Compare the tactical decisions that could be taken by a selected tour operator in
different situations...................................................................................................................14
Conclusion....................................................................................................................................16
References.....................................................................................................................................17

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Introduction
Aim of the current assignment is to provide the understanding on the tour operator industry.
Basically, the tour operators industry includes the various companies that have motive to serve
the customers by different tourism services. These companies basically provide the services such
as accommodations, transportation etc to the customers so their needs about the tourism could be
fulfilled. The current report on the tour operators industry explains the trends and changes of the
industry have brought the development in the tourism sector. The report also speaks about the
stages that the company use in developing the holidays for the customers and also the types of
the contracting that tour operators and suppliers have. Along with this, the brochure design,
distribution etc are also explained here. The last part of the assignment also speaks about the
strategic and tactical decisions that tour operator needs to take.

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Task 1
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry
Leaflet
The current and recent trends of the tour operator industry include the emerging of the e-
commerce that has provided the platform to the customers where they could book the services
while sitting at their home. The second trend of the industry is increment in the awareness of the
environmental issues from the side of the customers. This change brings the benefits for the
company and the environment of the tourist destination too. Here, the tourists are more aware of
the environment so that no wrong impact could be put on this. Another trend of the tour operator
industry is responsible tourism where the customers have the responsibilities towards the
communities. In the other words, a sense of responsibility also has come in the tourists as they
now are more concerned about the impact of the tourism on the host communities and wild life.

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Nowadays, the customers do not want single services, they want the package of the services and
also the different packages of the different services so that they could get the more option to
choose and with this they could satisfy their needs. All these trends have brought the
development in the tour operator industry that includes: mass market tourism to customisation,
discounting and low budgeted airline

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Task 2
2.1 Assess the stages and timescales involved in developing holidays
Following are the stages that the company Trailfinders Ltd need to access for developing the
holidays plan for the group of students:
Stage 1 “Market research”: The very first stage is conducting the market research, conducting
the market research is very important for Trailfinders Ltd as with the help of this the company
would be able to favourable and unfavourable factors of the market that can support the company
or affect the growth. At this stage, the company would analyse the climate of Belgium,
competitor policies on trip to Belgium, tourism needs of the tourists etc.
Stage 2 “Planning and scheduling”: After conducting the market research, Trailfinders Ltd
must follow this stage where the company would make the plan about what services would be
provided to the students and what would be the quality of the services which would be given to
the tourists at the trip of Belgium. Along with this, the company also prepare a rough idea on the
cost of the services etc (Buckley, 2000).
Stage 3 “Forecasting”: Forecasting is also a step of the planning holidays where the company
forecast the tourism services that could be given to the customers at the trip to Belgium so that
the greater satisfaction could get by the company. Here, Trailfinders Ltd could plan to visit the
attractions of Belgium and any other adventure activities.
Stage 4 “Contracting with suppliers”: Once the services are decided, another step is to make
the contact with the suppliers of the company so that the expected quality of the services could
be provided at best price to the customers. There are the different methods of the contracting
which could be used by Trailfinders Ltd, such as allocation, fixed contracting etc. Here,
Trailfinders Ltd has to provide all the information to the suppliers such as duration of the tour,
the quality of service the customers wants etc (Choi and Varian, 2012).
Stage 5 “Costing of holiday”: At this stage, the company Trailfinders Ltd has to calculate the
amount that has been decided by the suppliers. On the basis of this price the total cost of the tour
to Belgium would be decided. In the other words, it could be said that at this stage, the company
would calculate the price of hotel room, flight, taxis etc.

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Stage 6 “Financial Evaluation and Pricing”: After calculating the total cost of the tour o
Belgium, Trailfinders Ltd would calculate the profit margin for the company. With the help of
this stage, the company would be able to set a margin to the profit and also get the idea about
how much profit could be gained by the company if it arranges this trip.
Stage 7 “Brochure decisions”: If the financial evaluation of the company shows the profit then
the company go the next stage which is design the brochures. Designing the brochure for the
company is very important as this communicates the features of the trip to the customers and also
attracts them so that they could be the part of the trip and the company could get the chance to
serve enough numbers of the customers (Pearce and Lee, 2005).
Stage 8 “Advertising”: Not all customers could be targeted through the brochure only. Hence,
the company Trailfinders Ltd also needs to do the advertising of the trip of the Belgium so that
the customers could be aware of the action of the company and also can come to the trip. The
advertising for the trip to Belgium could be done through advertising in newspaper, direct
marketing, sales promotion etc.
Stage 9 “Operation and Execution”: This is the stage where the operations of the company are
executed as per the expectations and strategies of the company. In the other words, all the
decisions and the plans are executed as planned in developing the holidays.
Stage 10 “Post Tour Management”: This is also a crucial step on seeing the huge competition
of the market. Here, Trailfinders Ltd needs to maintain the relationship even after the trip to
Belgium. All this is done is because of that the Trailfinders Ltd could get another chance to plan
the trip to the customers. The satisfaction of the first trip plays a very important role here.
2.2 Evaluate the suitability of different methods of contracting for different
components of the holiday and different types of tour operator
Contacting could be defined as a process where the suppliers and the tour operators come under
the agreement. Under this agreement, they decide the type of the service, cost of the service,
quality of the services that the suppliers would provide to the customers who booked through the
tour operator. The process of contracting is very important for the suppliers and tour operators as
with this process both parties are able to make the profit and also can get the expected numbers
of booking (Hosany and Gilbert, 2010). In the tour operator industry, there are the three types of
the contracting are explained. These are:

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Fixed contracting: The fixed contracting is also known as commitment contracting. As the
name implies that all the service that the suppliers would provide to the customers and also the
rate of the services are prefixed in between on tour operator and suppliers (Conrady and Buck,
2007). Here, the payment from the side of the tour operator is also done in advance. If the
overbooking is done from the side of the tour operators then the suppliers has to manage the
services and also has to make the arrangement to provide the services to the customers. In case,
if the booking are less than expectation then the tour operator cannot asks the suppliers to return
the money of the services which were not served. Here, the tour operator and suppliers has their
own advantages. This type of contracting is not so famous in the tour operator industry.
Ad hoc contract: As Trailfinders Ltd is providing the luxury services to the group of the
students on the educational tour to Belgium then this type of contracting could be useful for the
company. Here, there is no pre agreement in between of tour operators and suppliers. Here, the
tour operators bring the customers for the suppliers and the suppliers provide the services to
them on the actual price. No discounts are given to the customers. This type of contracting is
effective only for the luxurious services.
Allocation: This type of the allocation is very famous in tour operator industry as many
organisations of this industry use this method of contracting. Most of the flights and hotels room
are booked through this method only (Richards, 2007). Here, there is an agreement between the
suppliers and tour operators where some seats or rooms of the suppliers would be booked for the
tour operator only, the tour operator could use the service whenever it wants. In case, if the
overbooking is done then the suppliers make adjustments and plan to shift the services to other
hotel or flight to same location or region. In case, if the booking from the side of tour operator is
below the expectation then the suppliers could book the services for their own customers at same
or cheap prices. Here, both the tour operator and suppliers get the advantage.
2.3 Calculate the selling price of a holiday from given information below
As mentioned in scenario that Trailfinders Ltd is planning to provide the luxury couch services
on the educational tour of the students. All the students are from UK and they want to visit
Brussels and Bruges (Belgium). The information given in scenario is mentioned below:
Special rate for group by Grand Casselbergh in Bruges: 90 Euros per person for a twin room (2
adults sharing) with breakfast

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The price of 45-seater luxury coach: £7, 400 (including cost of fuel, two drivers, tour manager)
Total numbers of students (group size): 40 students
Duration of tour: 5 nights
Cost of a local tour guide: £920
Trailfinders adds a mark-up of 33%.
Exchange rate is €1.12 per £1
Calculations
Total Cost of accommodation of single person (per night) = €90 * 0.8695= £78.25
Total cost of accommodation for 5 night= Total Cost of accommodation of single person*
Duration of tour
= £78.25*5 = £391.275
Cost of accommodation for the group of 40= Total cost of accommodation for 5 night* Total
numbers of students
=£391.275*40= £15651
TOTAL COST= Cost of accommodation+ Price for 48-seater luxury coach+ Cost of local tour
guide
= 15651+7,400+920= £ 23,971
Including the mark-up of 33%, selling price per person = (Total cost* mark-up of 33%)
= (23,971* 33)/100 = £ 7910.43
Package Selling Price= TOTAL COST+ Including the mark-up of 33%, selling price per person
= £ 23,971 + 7910.43= £ 31881.43
Package Selling Price per Person= 31881.43/40= £ 797.03

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Task 3
Introduction
In order to gain the success into the market, there are the various decisions that the company
Trailfinders Ltd needs to take to provide the luxury trip to the customers. These decisions include
the brochures design the alternation of brochures and the decisions on the distribution methods.
3.1 Evaluate the planning decisions taken for the design of a selected brochure
Brochure plays a very important role for the trip that the organisation is going to provide to the
customer. Basically the brochures communicate the features of the trip to the customers. It could
be said that brochures also help the company in persuading and attracting the customers towards
the company. Before planning the luxury trip, the important decisions that Trailfinders Ltd needs
to take on brochures are explained here:
Format design: The overall format of the brochure that the company would create for the luxury
trip must be attractive and creative so that it could get the attention of the customers who are
present in the market (Sautter and Leisen, 1999). In this way, it must have the good and attractive
pictures and photograph etc.
Information of brochure: while creating he brochure, the company Trailfinders Ltd must
include the information of about the trip like the destinations, the services that would be provided
to the customers, main highlights of the trip etc.
Target market and budget: Trailfinders Ltd also must be aware of for whom it is planning the
trip. In the other words, the Trailfinders Ltd needs to focus on the target group too while taking
the decisions on the creating the brochures.
Brochure launch: There must be a set date for the brochure launch as with the help of this
Trailfinders Ltd would be able to create the awareness of the trip among the customers of the
company (Gunn and Var, 2002).

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Application of legal practises: Each and every country has their own set rules and regulation
for the different industries so that the value and beliefs of the people could not be affected. Here,
some legal practises are also involved for the companies that violate these rules and regulation.
Thus, before creating the brochures, the company Trailfinders Ltd must be aware of such rules
and regulation of the industry.
3.2 Assess the suitability of alternatives to a traditional brochure for different types
of tour operators and recommend the most appropriate for your tour package
Earlier, the brochures were printed on the paper and then it was circulated among the customers
so that the highlights of the trip could be communicated to the customers. Here, the company
decides the quality of the brochure as per the service it is providing to the customers on the trip.
As the technology has introduced in the tour operator industry then the taste and preference of
the customers also have been changed. In results, the tour operators also had to change their
method and techniques to communicate the highlights of trip to the customers. Nowadays, with
the introduction of the technologies like internet, the traditional brochures have been replaced.
Here, some best alternatives of traditional brochures and also the best alternative for the luxury
trip of Trailfinders Ltd are explained.
E-brochure: This is very common alternative of traditional brochure. It takes the help of the
internet. Here, the brochures are created in the web pages and then circulated among the
customers. Many companies upload this on their sites and the customers could fetch the
brochures from there (Sigala and Baum, 2003).
As the Trailfinders Ltd is planning the luxury trip and the target market of Trailfinders Ltd is the
high class people then this is the best alternative of the brochure where the company could
circulate the brochures on the emails of the customers and make them inform about the luxury
trip. This brochure is easy to access for the customers.
Leaflet: Many organisations also use this alternative of the brochures. Here, the company print
the highlights of the trip on the leaflet and then circulate this among the customers. This
alternative of traditional brochure is used by the small organisations of tour operator industry.

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Poster: Many companies of this sector also take the help of poster where the highlights of the
trip are communicated with the customers of the company through this only. This is also used by
the small organisations of this industry (Davidson, 1998).
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday
for different types of tour operator and recommend the most appropriate for your
tour package.
All the efforts of the company would be totally wastage if the company is not able to make the
services available at the right time and right place. The distribution methods are the strategies
that help the companies in making the services available to the customers at the right time
(Stoever, 1985). Here, the distribution methods used by the various tour operators are explained
along with the description of best distribution method for Trailfinders Ltd:
Direct mail: This is very effective as here Trailfinders Ltd makes the services available to the
customers by mailing the tickets and other information related to the trip (Gartner and Lime,
2000).
As Trailfinders Ltd is planning the luxury trip then it would be best distribution method for the
company as with this, the company would be able to make a position into the mind of customers
as it is using the latest technology to provide the comfort to the customers. Along with this, the
company would get the data of the customers and the company also can send the emails and
other information about the trips that the company is planning for future.
Travel agencies: This distribution method is also very popular these days. Here the companies
make the contact to the travel agencies and offer them some commissions to sell their services to
the customers. Here the travel agencies work as a mediator in between of tour operator and
customers.
Online agencies: Many agencies are also there which are present on the internet and the
company can search them on internet very easily for the purpose of distribution of the services.
These agencies are same as travel agencies (Jenkins, 1982). The only difference is that the online
travel agencies work through internet.

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Direct distribution: A direct sell of the luxury services could be done to customers where the
company makes the contact to the customers and sell the services to them directly. Here, the
personal call is done to the customers to make the services available to them.
Internet: the distribution of the services could be done with the help of internet. Here, the
company Trailfinders Ltd could make the contact to the customers through what’s app, face book
etc.
Conclusion
The effective decisions on the distribution and brochures strategies could help the company
Trailfinders Ltd in gaining the success into the market. Along with this, the competitive
advantage also could be gained by the company.

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Task 4
Introduction
With the help of the strategic and tactical decisions, the company would be able to respond the
changes of the market effectively and the formulation of the strategic and tactical decisions also
enhances the strengths of the company into the leading market.
4.1 Evaluate the strategic decisions made by different types of tour operator
The strategic decisions that the different tour operators take are given below:
Strategic decision based on price: as the competition in the industry has been increased here
many companies are reducing the price of the services offered by them. The main motive of the
formulation of such strategic decisions is to attract the customers who are price sensitive or
consider the price first before taking the tourism services from the company.
Strategic decision based on image: There are many organisations in the tour operator industry
which take the strategic decisions on the basis of the image of the company. These types of the
strategic decisions are made by the organisation which customers base is strong and have gain
the great success into the market (Jansen, 1991).
Strategic decision based on distribution: Making the services available into the market also
needs the strategic decisions so that the company could respond the needs of the customers
effectively. Here, the numbers of the services, quality of the services is measured in making the
services available into the market.
Strategic decision based on promotion: There are the various methods have been introduced in
creating the awareness of the services into the company. Many tour operators made the strategic
decisions here so that only the targeted customers could be aware of the service and the company
could save its time and money in creating the awareness of the company.
4.2 Compare the tactical decisions that could be taken by a selected tour operator in
different situations
Most of the tactical decisions are taken by the company for the situation which are unpredictable
for the organisation. In the other words, the company could take the decisions tactically if it

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perceives that it could face the problem in future (Font and Buckley, 2001). Basically these are
designed to solve the problems of the company. The tactical decisions are highly based on the
skills and the talent that the employees of the organisation have. Here, an example of the Thomas
cook is taken. Thomas Cook is a giant organisation of the tourism industry and this is basically
known for the good quality of the services it provides to the customers (Yeoman, Brass and
McMahon, 2007). Along with the tourism services, the company also provides the transportation
services to the customers. Thomas cook is very well known about how to take the tactical
decisions in the organisation. Thomas cook has the alliances with the many hotels chain of the
world where it books the seats of flights for the travellers who booked their flights for certain
hotels. Many of the hotel chains that the Thomas cook have alliances are operating in the
countries where the tourism sector is high such as Singapore, Malaysia etc. the company took
this tactical decisions through seeing the huge demand of the tourism. Here, when the tourists
book the hotels in tourists destinations then they got a pop up window on the site of hotel where
they got the discounts on the flights by Thomas cook and on hotel rooms too. Here, with the help
of this decision, the company is able to book the huge numbers of flights.
Conclusion
In the competitive environment and changing demand of the customers, it would be good for the
company to use the strategic and tactical decisions so that the company would be able to gain the
profit into the market.

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Conclusion
There are the various operations and the processes that the tour operator has to adopt in its
culture so that the maximum profit could be gained by the company. As the competition in the
market is increasing and the taste of the customers are being change ten it is very important for
the tour operates companies to take the decisions for the company strategically so that the
negative impacts of this could be reduced and the more profit could be gained by the company.

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