Operations Management in the Travel Industry

This assignment delves into the application of operations management principles within the travel industry. It examines concepts such as tour scheduling heuristics, yield management, and the implementation of sustainable supply chain management practices in tour operations. The analysis is supported by case studies, industry brochures, and academic literature on tourism management and operations.

TOUR
OPERATIONS
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
1.1 Effects of current and recent trends and developments on a tour operations industry.....1
TASK 2............................................................................................................................................3
2.1 Stages and timescales involve in developing holidays.....................................................3
2.2 Suitability of different methods of contracting for different components of a holiday and
different type of tours.............................................................................................................5
2.3 Calculate the selling price of a holiday............................................................................5
TASK 3 ...........................................................................................................................................6
3.1 Examine planning decision taken for design of a selected brochure................................6
3.2 appropriation of options to a traditional brochure for distinct type of tour operators and
recommend most suitable for luxury tour package ...............................................................7
3.3 Examine appropriateness of various methods of dispensation used to sell a luxury tour
package for distinct type of travel operator and recommend most suitable.........................10
TASK 4..........................................................................................................................................10
4.1 Evaluate strategic decisions made by different types of tour operators.........................10
4.2 Compare tactical decisions that could be taken by a selected tour operators in different
conditions.............................................................................................................................11
CONCLUSION .............................................................................................................................12
REFRENCES.................................................................................................................................13
Books and Journals...............................................................................................................13

INTRODUCTION
In today's modern scenario, industry of tourism has attained largest growth while
comparing to other service industries all around the globe. In a way to manage all the activities
and operations of a business,there are requirement of tour operations. In a whole industry of
travelling stakeholders operations play an important role. These are a agencies of tour operations
which sell transportation, tour packages and accommodations and provide them the facilities of
tourism to their customers in a indirect and direct way. Their are many organisations which
provide tour operations like Trailfinders Ltd and Kuoni. Trailfinders Ltd mainly deal with
services of travelling in Ireland and UK. Company was founded in 1970 and having its own 3
centres in Ireland and 29 in UK. Kuoni was found in 1974 (Lifset and Boons, 2011). It is a Italy's
tourism industry it gives best tours and Kuoni Italia. In this report they will discuss about the
effects of recent and current trends of tour operations, understand about the stages in holidays
creation and readers will also come to know about decisions planning for designing of a
brochure.
TASK 1
1.1 Effects of current and recent trends and developments on a tour operations industry
Operators of tour cover both travel and tour sector for execution of holidays. It is growing
increasingly in demand of their services and products of a sector. Packages of tour and services
related are a product of tour operations. This sector is having a growth on a retail industry.
Development and current trends are as follows: Increases disposable income of economy: Country's economy make impact on a
Trailfinders Ltd growth. Individual disposable income is a part of a income which saves
after a money applications. Disposable income increases of a economy will lead to
increases in a living standard of a population. Technology is developed: Growth of a tour operators giving growth in technology.
Transactions are execute by using a new technology. Increasing in reach of tourism sector
and quality with a help of digitalization (Robinson and et. al., 2011). It make cost and
time effective. Management educational institutes: tour operators sector is growing by a effective
management result and employee efficient who manage a education, which gives many
1

of institutes of management. These make a qualities of increasing performance by a
mangers of industries. Level of customer's satisfaction: Fulfilling customer's satisfaction is very important so
that they come again and again which will assist them in increasing their revenues. It
should be evaluated effectively so that they can know about all their drawbacks which
they can improve. This will surely create a benchmark for other industry so that hey can
win customer's loyalty (Afshar and Haghani, 2012). They can do this by introducing
different types of schemes related to holidays. FDI and Globalization: Globalization eliminate the boundaries of a countries. It
influenced travel and tour in expanding a reach to a worldwide industry. Foreign direct
investment help in maximizing access of countries on a market of overseas. It help in
generating a capital in a country and increases a opportunity to grow a tour operators by
giving them support. Products are customized: Sector is giving customization facility in their product in which
they provide holidays packages and designed by considering their requirements and
demands. Packages of holidays provides them a different varieties and features and
according to their customers are customized. Techniques of marketing: Technique of a marketing is a source to make customers
awareness about their industry and their products. Marketing tools is used by a
Trailfinders Ltd for tour operating to increases demand of their products and expand their
reach. Trends emerging in Trailfinders Ltd such as points on their holiday packages,
collaboration with others sectors to aware customers and educate and provides points and
discount about this sector are used by tour operators sector. Marketing is a source which
help any company to promote their business. Through this customers can know about
recent trends in travel industry about which company is giving best offers which are
suitable according to their needs. Tour operators make certain tools which are related to
recent trends. Government bodies are also implementing new strategies like appointing
famous actors, sports person as their brand ambassadors for advertisement. In many
books they are mentioning about the famous places which visitors should visit. Transportation cost: It play a very main role in tour operations as their cost is influenced
by transportation cost. Lower price of transportation increases demand of products.
2

Trailfinders Ltd is giving low price facilities. Cost of transportation depend on different
types of charges and taxes and a fuel price. Effect of PESTEL factors: Industry growth is related to a factor of PESTEL. Definition
of a PESTEL are as political, economic, social, technology, environment and legal
factors. For decision making more effective they have to analysis all these factors to grow
Trailfinders Ltd and establishment of certainty. These all factors having their own
negative as well as positive aspects in industry of travel and tours.
 Competition: Easy way of exit and entrance help in increasing of competition in market
of tour and travel sector (Pohl, 2014). Increases in competition will help in increases in
employment and equilibrium is made between supply and demand.
TASK 2
2.1 Stages and timescales involve in developing holidays
Replanted of holidays for more enjoyment. Planning is a first process of each and
every activities which gives us a frame work of all those activities which are going to be held. It
help in making a particular decision by analysing the others options. Following are the stages of
effectiveness for development of holidays: Destination research: First stage for development of holidays is to search the destination
they have to make a travel and tour. Destination of travelling are selected by their
customers demand. Many type of research, PESTEL analysis are done for research of
destination. This process of research is done within two, three days. Developing tour route: After selection of a research destination then next step is to
develop a route of tour. It is a form of summarized of a tour program which include the
route of travel, all destination, transportation, visited places and accommodations.
Process is very systematic for completion of holidays without any complexity. Stage
completed within two months. Negotiations: There are many suppliers and vendors deal with tour operator. Trailfinders
Ltd negotiate with their vendors for controlling the prices of a packages. Holidays in
group are customized for not much negotiation in cost of travel a tour, accommodations
and transportation. This stage take a time to complete within four months. Price determination: Next step is a packages of cost which consider all elements.
Factors effect the cost of packages are cost of fuel, framework of taxation and foreign
3

exchange rate of a country (Berkoune and et. al., 2012). Their are fixed prices at least ten
months before date of holidays. Costing take max one month after negotiation process
get completed. Marketing of tour packages: It is a very important factor of every company to increase
awareness of a consumers about their services and product. It help in increasing a
profitability and demand of Trailfinders Ltd. This stage completed in four to five
months.
 Tour execution: last stage is when they execute a tour operator process. All estimations
and preparations are converted into reality. Execution of a tour effectiveness make a tour
successful. All process of marketing is exercised and most tour operators of Trailfinders
Ltd have policy to control and monitor all activities process. Times is consumes which is
decided in a route of tour operators.
A timescale is prepared for developing a holiday which is evaluated below as:
Activities 1 to 7
Day
8 to 14
Day
15 to
21 Day
22 to
28 Day
29 to
35Day
36 to
42 Day
43 to
49 Day
50 to
56 Day
Marketing investigation
Selection of tour goal
Arrangement and
negotiating with work
providers
Fulfilling legal
necessitate
Promotion Plan of action
2.2 Suitability of different methods of contracting for different components of a holiday and
different type of tours
Design of a tour operators packages by having a different features and they are having a two
methods which sale only contract and fixed contract. Their are different types of tour operators
used these methods for contracting (Lam and et. al., 2014). Trailfinders Ltd do contract with
4

their suppliers and vendors by considering two following contracts and choose a particular
operator which will be suitable most. Fixed contract: This type of contract has a main focus on a qualitative approach and
collective approach towards their sale of Trailfinders Ltd. These operators of tour
increase capacity by maximizing of sales. These type of contracts are done to have a
benefits on a off seasons. Contract of a tour operators in this they take a full risk of
Un-utilization. It gives a benefits of a cost effectiveness by having a benefits of group
prizes and a huge discounts. In case of Un-utilization the operators of tour are liable to
pay a contract balance amount to a person proving services (Dhiman, 2012).
 Sale only contract: In this method of a contract having a high prices while they compare
with fixed contract. Seasonal contracts are considered when having a potential market
and demand of customers. Factor of risk is less here in these kind of a contracts as they
are not having a liability on a operators of tour. In these there is no scope of giving a
higher discounts in these contracts.
While analysing the both contracts types they see that generate of a higher return having a higher
risk. As contracts which are fixed having a high risk and they provide them profitability and a
huge discounts. In case of sale contract there is having a higher prices with no risk.
2.3 Calculate the selling price of a holiday
In a current case, educational tour have five nights for Brugge and Brussels,
Development of Belgium. Size of a group is 42 and passengers are booked with are made with
Trailfinders airlines on a fixed contract payment and basis are made in advance rather having a
actual utilization capacity.
5

Cost Calculation Amount
Cost of room 1*5*10 €50
Cost of BB 1*4*5 €20
Total variable cost €70
1€ =.9£
Variable cost in £ 70*.9 £63
Cost of Transportation £500
Cost of guide £150
Total cost of tour £713
Profit margin 20% £855
Total sales price of
tour(Discounted)
£825
As shown on a above table that all calculation of a selling price in a tour of educational
for students of London. In a context, companies of tourism has changed variable cost as well as
fixed cost. Accordingly, total of a variable cost are €70 and after that it is converted into pounds,
i.e. £825. cost of travelling is denoted as a cost of bus this is a higher because of having a long
distance. Margin of profit cost is calculated is 20%.
TASK 3
3.1 Examine planning decision taken for design of a selected brochure
A company could not sale its products and service without getting aware their target
customers. To inform about deals organization provides advertisement. Brochure is a document
that contains detailed and associate knowledge regarding services to increase demand. It is a tool
of marketing that adds less cost to corporation and its reaching level is wide. This technique can
be dispense online and offline. Reach of brochure is increased by new and improved
technologies along with digitalization (Stevenson and Hojati, 2007).
6

There is a process of developing brochure and steps are following further:
Issue identification for developing brochure: All troubles and problems should be find
before making this tool. There are several issues that faced by marketing department of Kouni in
developing this and these are segmentation of market, identification of potential market,
brochure format, information that has to be discussed and time limit of brochure execution.
Strategies should be formulate to create development of technique that must consider all aspects
like comparing and analysing all facts and figures.
Format of brochure: Brochure is an organised document. It includes many segments and
sub segments that divides information which responsible for attractiveness of brochure and make
this tool understandable among consumers. Brochure differs according to target customer
(Russell and Taylor-Iii, 2008). All necessary knowledge regarding services must be written in a
pre decided format which is explained below:
 Name of tour operator firm
 Type of transportation
 Travel location and itinerary of tour schedule
 Accommodation and meal services
 Rate of complete package with detail
 Other conditions with applied charger, if any
 Legal requirements that should be followed by tourists
Budgeting and selecting target market: Before making brochure identification of target
market and budget for tour and brochure creation should be identified. Segmentation of market
depends upon taste and preferences of buyers and target market which is most appropriate for
Kouni is assorted. Budget could be said that spending of consumer's strength that is a
fundamental factor for assorted services and items of industry. Potential buyer could be analysed
by budget.
Time scale for accomplishment of all steps: brochure should be complete in written time
as it is a most important tools in hands of marketing department of tour operator company. This
is involved in planning procedure that is a part of decision making process. All steps that are
included in brochure creation has their time bound and they must be completed in those
boundaries.
7

3.2 appropriation of options to a traditional brochure for distinct type of tour operators and
recommend most suitable for luxury tour package
Traditional brochure is a classical approach of marketing of travel agency. These are
printed documents that contains detailed explanation of information regarding tour packages but
these are not efficient in generating demands and attracting customers for holiday packages.
Navel technologies and digitalization has evolved several options that changes a classical
brochure into modern style (Gountas, 2005). These various alternatives reduces gap and removes
shortcomings of traditional gazetteer. These various rational choices are staed below:
 E- Brochure
 Visual Brochure
 Social Media
 websites
 Call centres
 Travel agents and retailers
 Directs sell
8

(Source: Travel Agent Brochure, 2013)
online brochure is an electronic gazetteer. It has wide network of reaching customers and
it is a better option than physical and traditional brochure. It is better than regular brochures in
many context and these are less cost, wide range of reaching clients, it attracts more customers
and it is also helpful in generating demand and productivity of corporation. This way includes
many photos and video clips of tourist destination is a way that increases readiness of clients to
purchase holiday packages. Social media is a wide place where a tour operator can plant their
brochure to gain attention of consumers because there are many people using social media to
connect other people (Barratt, Choi and Li, 2011). Kouni is developed a website that provides
information regarding their luxury tour packages and it contains all knowledge that is associated
with their services and facilities. It is a less cost activity that improvise accessibility of
customers. Call centres very sober manner of collecting information about tour operator
companies and its services. Travel agents are a kind of mediators and intermediaries of company
that work as a middlemen and plays a vital role in managing demand and supply in this industry.
Direct selling can be said as a direct connection with clients.
9
Illustration 1: Brochure for Travel Industry

(Source: Travel Company Brochure, 2011)
In given problem where brochure is planning for luxury tours the most appropriate
traditional brochure would be e- brochure, audio-visual brochure and website of tour operator
corporation having all news and information that is associated with vacation plan with
attachment of pictures and clips of destination with detail of quality services on website and
social media platform.
3.3 Examine appropriateness of various methods of dispensation used to sell a luxury tour
package for distinct type of travel operator and recommend most suitable
Every industry makes several kind of action to diversify and expand their dispensation
channel to collaborate demand with supply. Making classical brochure is a method of spreading
awareness among customers. Variations in technologies and trends are reason of development of
sales and distribution of company. It also includes other sources that are promoting luxury tour
packages of Kouni and these are social media, E- brochures, direct sell, online marketing, travel
agents and retailer etc. Earlier are tools that promote productivity and profitability of firm. These
techniques are cost and time saving that is associated different features along with advantages
10
Illustration 2: Brochur of Travel Company

and disadvantages with them. It is a fundamental duty of tour operators that they should analyse
all available options and their impact on organization goal (Li, Robinson and Mabert, 1991).
Strategies must be formulate while considering most profitable tool that must be selected as it
has its impact on long term growth and success of Kouni.
In provided case Kouni is planning to implement brochure for luxury tour for cream
clients. In case of selling luxury holiday packages most appropriate dispensation channels are
websites, social media, E- brochure and audio visual method of promotion of destinations with
demonstration of facilities by travel agents and retailers. By using described sources of sales and
dispensation demand could be increase for luxury tour packages.
TASK 4
4.1 Evaluate strategic decisions made by different types of tour operators
Tactical decision making is an essential point in achieving organization's target with more
profit for corporation. Associations uses tactics management to enhance and to collaborate with
future permutations. In process of tactical decision making decisions are taken by analyse all
available aspects and alternatives and has to make choice among them by tour operators for
conducting business activities for longer period of time (Johnston, 1999).
There are several decisions that has to be taken by tour operators and types of these are
stated as beneath:
Demand Forecasting: It is primary decision made by travel agents. It is a futuristic
action that tell about future demands of luxury holiday package's product and services. All other
decisions rely upon this like it helps in making budget for travel package etc. and it also brings
certainty in corporation and reduces gap between demand and supply.
Market segmentation, targeting and positioning: Segmentation is a action which means
division of particular portion according to features and attributes. Here segmentation means
division of customers according to their demand, taste and preferences. Different tour packages
are designed according to their buying capacity and readiness for products and services. After
selecting potential buyers of holiday package company targets them by their advertising strategy
and all after they do positioning of their services and facilities by analysing various segments and
capacity of customers ( Bamford and Forrester, 2003).
Discount price strategy: discount plays a vital role in tourism industry and becomes
reason behind selling of many tour packages. It helps in selecting an appropriate price for tourist
11

plan. There are several contracts and deeds that are defined on basis of this section. Fixed deeds
leads more discount and sale of only contacts contains low discounts. These decisions are
necessary for deciding price for products to achieve high efficiency.
Building product strength: Decisions should become reason of strong brand image of
company by enhancing popularity of products. This is done by tour operators for making
adequate decisions to develop quality services for clients. To position company in customer's
mind.
Apart from these points there are many other points that is included in strategic decisions
type and they are risk management, pricing strategies and effective promotional strategies etc.
(Schwartz, Tapper and Font, 2008).
4.2 Compare tactical decisions that could be taken by a selected tour operators in different
conditions
Strategical decisions are necessary for effective conduction of business activities in
Kouni. These decisions are taken to resolve those issues that are arises on daily basis and fill day
to day requirements. These decisions are make to by negotiating and choosing several service
providers. Services that are covered in this segment are accommodations, arrangements,
transportation, food, shelter and many other facilities. This kind of decisions are also taken for
maintaining connection with financial stakeholders. These decisions includes following points:
 Frequent segment analysis and specific promotion.
 Tactical pricing determination of packages.
 Maintaining certainty by achieving day to day operations.
Communication and information technology influences strategical decisions. Regulatory
framework contains alls laws related to travel plan. Economic growth also affects strategical
decisions. Other factor is exchange rate affects international trading of companies which varies
country to country (Hoseason and Johns, 1998).
CONCLUSION
This assignment can be concluded as it is a study of travel industry. It includes various
salient features of industry. This study analysed recent trends and developments in tourism
industry. It analyses different aspect of various tour operators. Task is to examine role of
industry in market. Vacation packages are products of company and its stages were discussed
12

earlier in this report. Different contracts, marketing strategies are factor that influence deision
making of tour operators.
13