Tour Operations Management: Strategic and Tactical Decisions for Tour Operators

This report delves into the strategic and tactical decisions made by tour operators in the travel and tourism industry to navigate through market competition, pricing strategies, and customer preferences. It analyzes the effects of current trends, stages in developing holidays, brochure planning, and distribution methods.

Tour Operations Management
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................4
1.1 Analyse the effects of current and recent trends and developments on the tour operators
industry........................................................................................................................................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................................................................................8
2.3 Calculate the selling price of a holiday from given information below................................9
Task 3.............................................................................................................................................12
3.1 Evaluate the planning decisions taken for the design of a selected brochure......................13
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....................................14
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of the tour operator and recommend the most appropriate for your tour
package......................................................................................................................................15
Task 4.............................................................................................................................................18
4.1 Evaluate the strategic decisions made by different types of tour operators........................18
4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations....................................................................................................................................21
Conclusion.....................................................................................................................................22
References......................................................................................................................................23
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Introduction
Tour operator is a combination of tour and travel elements which creates a holiday package.
They give core attention to the promotion and advertisement of their products, itineraries and
holiday package. In the United Kingdom, travel and tourism industry are continuously growing
which is providing the future opportunities to UK based tour operators. Tour operation is
considered as the essential constituent of travel and tourism industry. This assignment is based
on the study of tour operator management so that tour operators can manage their day to day
activities and holiday packages in most effective as well as in a systematic manner. In this report,
an influence of recent and current trends on tour operator firm like Trailfinders Ltd has been
analysed. Apart from this, each and every stage of creating holiday has been explained. While
making holiday package selling price of holiday play most important role so in this report a huge
description has been given to selling price of a holiday. Along with this, different methods and
brochures have been evaluated which is used for selling holiday packages. At last some tactical
as well as strategic decisions, have been introduced so that tour operators can take most effective
future decisions.
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Task 1
1.1: Analyse the effects of
current and recent trends
and developments on the
tour operators industry
Introduction
The tourism industry has
changed depending on the
circumstances and discovery
of historical places in the 20th
century. The expectation of
the customers has increased
and hence, the tour operators
always thrive to give the
unique experiences to its
customers. The advent of new
technologies has enabled the
customers to choose their
desired destination and visit
places of their choice at the
lower costs.
Current trends in travel
and tourism
The tourism sector is one
of the most adaptable of all
the industries since the
changes in the preferences
of the customers has
The tour operators can now establish
their businesses across the globe
which not only helps to sustain in
the market but also to enhance the
revenues. The concept of
liberalisation has increased the
competition in all the sectors
including aviation sector. The sector
operates flights at a cheaper cost
which minimises the cost of travel
(Kapiki, 2012).
Consumer Protection Legislation:
The UK government has enacted the
consumer protection and hence, the tour
operators serve the customers ethically.
For example, ATOL, which is known as
Air Travel Organisers Licence ensures
that the travellers do not lose money or
stranded abroad. It is a financial
guarantee provided to the tourists and
this scheme is managed by Air Travel
Trust (Civil Aviation Authority, 2015).
Technological Advancements:
Technology enables to interact with the
customers effectively. The use of
internet provides the opportunity for the
customers to select the destination and
tour operator easily. This helps the
Brexit: The decision of the UK to
leave the EU will impact the free
movement of tourists to other EU
countries. As per the estimates, the
contribution of EU countries
towards the movement of
passengers is 85% though maritime
transport and 64% by air travel. The
decrease in the number of
passengers will impact the revenue
generation o0f tour operators
(World Travel & Tourism Council,
2017).
Conclusion
The tourism industry provides
various services in order to
attract the tourists and increase
their revenues. However, there
are various factors that affect the
changes in the tourism sector.
The tour operators have to adapt
to these changes in order to
sustain in the competitive
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enabled the tour operators
to change the way of
operating the business. The
changes that drive changes
can be stated as:
Globalisation: The concept
of globalisation and the free
market has enabled the
movement of people from one
country to another. The
customers are now able to
select the destination of their
choices. The increase in the
number of tour operators and
the advent of technologies has
enabled the customers to
travel at a lower cost.
tourists to decide the destination and
type of travel. The tour operators are
benefited by providing the information
through internet by developing their
websites. The selection of the type of
service and payment methods are
simplified which encourages the tourists
to visit distant places. The use of
technology also enables to innovate and
provide the latest facilities to the
customers which enhance the reputation
of the tour operators (Kapiki, 2012).
market. The tour operators
should research about the current
trends and aspirations of the
customers while planning
various activities.
Task 2
Introduction
The packaged tours are preferred by the customers since they are economical and also, provide
an opportunity for visiting numerous places that could not be done on a solo trip. There are
various factors that have to be considered while planning these trips. Trailfinder should ensure
that the students feel comfortable while travelling and hence, a proper planning has to be done so
that the time allotted for each trip is efficiently planned.
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2.1 Assess the stages and timescales involved in developing holidays
Stages of developing holidays
The stages that are involved in making successful holiday packages are:
Step 1 - Research
The first step is to ascertain the climate and other factors such as social, political and economic
factors of Brussels and Brugge. These updates will help to plan each stage of the tour and also,
the places where the accommodation can be provided effectively can also be ascertained. The
destination can be changed if the weather condition is not favourable and hence, prior planning is
required as to the destinations that can be visited in case of the bad weather conditions.
Step 2- Negotiating with Vendors and Suppliers
In this stage, the arrangements have to be made to procure the goods and equipment which are
required for the trip by contacting vendors and suppliers (Tourism Council, 2018).
Step 3 - Pricing of the tour
The cost of the tour has to be ascertained including the facilities provided by Trailfinders such as
accommodation, food and other expenses. The pricing strategy can be based on cost or market
pricing strategy.
Step 4 - Development of Tour itinerary
A detailed plan has to be presented as to the various destinations that have to be planned to visit
and the places where the accommodation facilities are arranged for the students (Tourism
Council, 2018).
The various alternative routes can be considered such as travelling through Calais in France and
then to Brugge which amounts to a total distance of 183 miles or by taking a diversion from
Dover (UK) and reaching Dunkirk (France) by route A16 and then reaching Brugge to cover a
total distance of 181 miles which would be more economical for Trailfinders. The decision has to
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be taken after taking the feedback from the students and suppliers so that the flexibility is
maintained.
Step 5 – Brochure Production
The brochures have to be designed and provided to the students which should contain all the
details of the trip. This should include the price details of the trip with the bifurcation of costs as
to visiting costs, accommodation costs and other expenses.
Step 6 - Implementation of Tour package
The planning has to be made for implementing the plan in an efficient manner. The roles and
responsibilities of the suppliers and vendors have to be clearly stated in order to avoid conflicts.
This ensures that the planned trip can be completed smoothly and efficiently.
Step 7 – Post tour management
This stage involves taking the feedback from the students, suppliers and vendors. These
suggestions can be implemented in the future trips in order to enhance the customers’
experience.
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2.2 Evaluate the suitability of different methods of contracting for different components of
the holiday and different types of tour operator
The various vendors and suppliers have to be identified so that the trip can be planned
efficiently. The tour involves activities such as sightseeing, accommodation and providing other
facilities which include food and beverages to the visitors. Hence, the tour operators prefer to
provide various facilities in order to attract the tourists and the cost of the tour package depends
on the customer tastes and preferences (Maric, et. al., 2015). The tour packages are priced
according to the customers and hence, not every customer is priced so that the customers can be
charged according to their merits.
The types of contracting can be defined as under:
Fixed Contracting: This type of contract is done when the goods are purchased in large
volumes and the prices are fixed for the products. The fixed contracting enables the tour
operators to provide the services at a lower cost and hence, discounts are provided to the
customers for the package tours. Also, the facilities that are provided by the operators do not
change and hence, quality services can be availed by the customers at a lower price (Business
Companion, 2018).
Sale only Contracts: These contracts are designed during the peak seasons since the customers
pay the cost that has been charged by the tour operators. The prices of the services are charged
higher and the operators usually report higher profits during this period.
These contract techniques can be used by Trailfinders to increase the customer base and also, to
generate the revenue.
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2.3 Calculate the selling price of a holiday from given information below.
Calculation of Actual Cost per student:
Particulars Amount £
Boarding and Lodging facility with breakfast
(96*5=480) (480*0.8929)
428.6
Travelling expenses (11200/42) 266.67
Price charged by guide (945/42) 22.5
Total Cost (Gross) 717.76
Add: Profits (33% of total cost) 236.86
Actual Cost Per Student £954.62
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Calculation of the cost of the tour
Particulars Amount £
Boarding and Lodging with breakfast (96*42*5 = 20160) (20160*0.8929) 18000.86
Travel costs 11200
Guide charges 945
Gross Total (cost of package) 30145.86
Add: Profits (32305*33%) 9948.14
Total cost of the package £ 40094
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Conclusion
A conclusion can be drawn that the tour operators have to adapt to the changing circumstances in
order to sustain in the market. Trailfinders have to develop an effective system so that the cost of
the services is minimised and the customers can be charged the minimum rates. This will help
the company to expand the market share and increase its goodwill and reputation. The tour has to
be panned in an efficient manner and hence, services of vendors and suppliers can be utilised.
This ensures that the trip to conclude without the hassle and the customers will be happy to avail
the services in future.
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Task 3
Executive Summary:
The most usually and generally utilized showcasing instrument of the visit working organizations
is their brochure. Kuoni travels and Belmond travels out likewise need to experience such
choices that are should have been produced using their end. Arranging stage is vital for the
further execution of the pamphlet for meeting the targets of advising most extreme individuals
and it brings down cost which expands the benefits of Kuoni and Belmond travels.
Introduction:
The brochure can be said as a standout amongst the best method to speak with the voyagers
about the movement bundle and the new fields to explore. After all the customary strategies for
speaking with the explorer's new techniques have been developed like leaflets which can be of
various kinds of digital handouts are a trending pattern now. Kuoni travels is outstanding
amongst other voyaging organization offering a scope of movement administrations to the
explorers while Belmond travels is said as the polished visit operator with a rich legacy.
3.1 Evaluate the planning decisions taken for the design of a selected brochure.
Brochures allude as a standout amongst the essential advertising apparatus. Kuoni travels and
Belmond travels realize that the handouts not just characterize the nature of service and time that
clients will have amid their vacation, yet in addition have all the moment subtle elements of the
holiday package they are keen on purchasing. A pamphlet some place wins the trust of explorers
as they settle on choices of voyagers considerably simpler and help them is choosing the best.
There are several things which should constantly be joined into a better than average handout
Kuoni travels and Belmond travels must recall them while impacting a flyer for their association
to comfort the explorers like given, name of association, sorts of dinners given, concealed and
point by point costs and other traveller objectives and all strategies for transportation. There are
some steps included in developing and designing of a brochure are.
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 The budget for brochure design: There should be a pre-analysis of the costs engaged in
the developing and designing of a brochure, the costs decided must not exceed the
planned costs (Bhatia, 2012).
 Deciding objective: Kuoni travels and Belmond travels should first decide the objectives
of making a brochure what sorts of information will it contain and what travellers can
gain from it because a small mistake in the brochure may change the decisions of the
backpackers.
 Deciding format: A format should be decided earlier of how the brochure will look
when it is completed and which information will be placed where, the handout must
contain information and format more attractive them the other tour operators which will
be beneficial for Kuoni travel and Belmond travels (Boyle, 2017).
 Draft matter: All the relevant and genuine information must be given in the brochure no
negative data must be printed as it will be a big loss for Kuoni and Belmond travels.
 Finding issues: All the issues related to the designing and implementing of the brochures
must be listed out and proper solutions must be provided to it as a handout is one of the
most important parts for the success of the holiday package (Ghimire, 2013).
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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.
There are many kinds of alternatives to spread a brochure and the objectives of Kuoni travels and
Belmond travels to the travellers. The Brochure is designed and formatted in such a way that
they keep on attracting new travellers to their holiday packages. Different tactics are used by
these travel companies to design, develop and spread these brochures and some of them are
given below:
 CD and Videos: The CD and videos give to the travellers for attracting them are very
much cost effective and can be a great tactic to make them buy your holiday package
(Mowforth and Munt, 2015).
 Internet: The Internet is the easiest way to spread a nice deal of holiday package like a
forest fire. Internet covers a wide range of travellers and can be said as the easiest way to
sell the services.
 Television: Television advertisements are also effected fully for spreading the knowledge
of services to the travellers and lure them to the services. Television covers a diverse and
widespread area.
 Direct mail: Direct mail can be the cheapest and easiest method to communicate with the
backpacker's digital brochures can be sent directly to their mail (Lockyer, 2013).
 Travel agencies: Travel agencies can help spread the brochures of Kuoni travels and
Belmond travels to the people and also refer their services directly to the purchasers.
 Travel magazines: Many of the travellers have a habit of reading travel magazines in
order to find out the new destinations and holiday packages to travel which can be
effectual for the tour operators to spread their words directly to the willing travellers
(Bell, 2016).
Recommendations:
Kuoni travels and Belmond travels can option for a television advertisement for selling their
holiday packages as the willing travellers will surely revert back seeing the advertisements.
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Providing a television can be costly at a certain point but in long term, it will help both the
operators to extend their services and make them famous.
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of the tour operator and recommend the most appropriate for your tour
package.
Some of the methods and options for selling the holiday packages are.
 Social sites:
Social sites are the best sources of reaching efficient audiences at a smaller period of time. Kuoni
travels and Belmond travels sell their holiday packages through these social sites and increase
their sales. Social sites will benefit them to spread fast but can be also turned as negative point
due to wrong or insufficient data published.
 Direct sell:
Direct sell is very much efficient in selling the services directly to the travellers but at the same
time, it is also time-consuming and expensive. Kuoni travels and Belmond travels will
effectively get to know about the responses of travellers on their services which will help them in
finding out the mistakes and improving them (Lockyer, 2013).
 Telephone:
Marketing through telephone can be an inviting for the travellers but if there is any mistake in
providing the detail to the traveller or the speaker hesitated in speaking a certain point then the
telephone marketing can be annoying at some level.
 Mobile applications:
Mobile applications can be a good option for spreading the holiday packages and another
service’s quickly but these applications have a negative point of hacking and also lead to non-
satisfaction of the backpacker and can lead to a big turnoff for the tour companies (Bhatia, 2012).
Recommendations:
Kuoni travels and Belmond travels can option for Social sites as the key method to sell their
holiday packages as they are easy to target the client and can also be beneficial for spreading the
brochure at large scale throughout the globe. Kuoni travels and Belmond travels can build their
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own websites to attract the travellers and make them buy their services. Many other social sites
like Facebook, Instagram or Twitter can be used to make a positive and willing audience to make
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the services famous and give a green signal to the new methods implemented in the travel
packages by these tour operators.
Comparison between brochures of Kuoni Travels and Belmond Travels
Kuoni Travels Belmond travels
Paper
Quality
The paper quality of Brochure used by
Kuoni travels is high and considered as
easy to carry, the paper doesn’t get
wrinkles even if folded which is a plus
point for saving the wastage of brochures.
Belmond travels provide a brochure of
superior quality along with the digital
brochures the traditional brochure is
waterproof and has top quality, the
density of paper is 250-300 GSM.
Size The brochure by Kuoni travels is around
25cm in length and of 15 cm in width,
which makes it handy to carry.
Belmond travels a portable brochure
which is slightly different from the
traditional brochure in size but contains
all the information.
Content The brochure includes journey offers,
prices, tour timings and upcoming
destinations which lure the clients.
The brochure of Belmond travels
includes the data along with the lavish
logo of the tour operators which is a
symbol of trust and top class quality
travel.
Volume The travel brochure is considerable and has
the weight of around 300 GSM, the
contents are in detail and all the links of its
other digital brochures are given.
The volume of Belmond’s brochure is
quite better than the brochure of Kuoni
travels; it contains all the attractive
images and different methods to contact
them.
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Conclusion:
The above-done report tells about the diverse methods and tactics that Kuoni travels and
Belmond travels can option for selling their services and holiday packages. Many of the tour
operators are already selling the services using these methods which give rise to the competition
but both the tour operators can opt for new techniques and unique brochures to attract the
travellers.
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Task 4
Executive summary
Tour operators are those organisations which work in travel and tourism industry. This type of
organisation changes its decisions on the basis of current and recent trends. This section is based
on tactical and strategic decisions which are taken by tour operators so that they can deal with
any kind of business situation.
Introduction
In this section of a report, all the tactical, as well as strategic decisions have been explained in
detail which can help different tour operators in different circumstances. By taking help of these
strategies, the organisation can survive in a competitive marketplace and also can lead their
business to the high level of success and growth.
4.1 Evaluate the strategic decisions made by different types of tour operators
In travel and tourism industry, both tactical and strategic decision plays a most significant role
because it helps tour operators in dealing with worst business conditions such as market
competition, price wars and so on. Effective formulation and implementation of such decisions
can lead tour operators to a high level of success. While operating business activities in a
competitive marketplace, tour operators have to take certain kinds of decisions (Abrate and
Viglia, 2016). There are various inbound, outbound and domestic tour operators which takes help
of below-mentioned decisions:
Surcharge policy: It is that amount which is charged by the tour operator in addition to the fees.
Tour operator should charge this amount to consider that their customer will not feel any
objection regarding surcharges. Sometimes, consumers consider this amount unnecessary or
extra fee. So, tour Drumgolf should set its surcharge policy in an effective manner so that
customer will not consider it as the extra fee (Kaaya, 2014).
Pricing strategies: The most important things which are considered by tour operator are
travelling expenses. So, it is very much essential for all tour operators to choose the price of their
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holiday package so that it can cover its operating costs and also can generate enough financial
profit. High pricing policy can reduce the number of customers whereas low pricing policy can
help tour operator in increasing its customer base.
(Figure 1: Pricing strategies)
(Source: 3 major pricing strategies, 2017)
Drumgolf can take help of competition; cost and customer value-based pricing policies for
dealing with business situations. By taking help of these pricing strategies, Drumgolf can deal
any kind of business problems and also can increase its customer line which will directly
improve organisational performance and position within the marketplace (Mamhoori, 2015).
Positioning and branding: For better growth and success, tour operator should focus more on
its positioning and branding process so that it can promote and advertise its holiday packages in
all over the country and world. The organisational brand is that intangible asset which helps
organisation in improving its market image in the appropriate manner. Apart from this, the top
position of the company helps it in achieving a competitive advantage as well (Phillips and
Moutinho, 2014).
Product choice as per customer portfolio: Customer attract toward product only if it is highly
promoted and advertised in advertisement channels. In simple words, people like to purchase
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those products which ar5e highly promoted. All individual have their own choices. So, tour
operator should create its holiday package to consider needs of all individuals.
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4.2 Compare the tactical decisions that could be taken by a selected tour operator in
different situations
There are various business situations such as positive and negative which provides positive or
negative results to the organisation. Tour operators are those firms which always affected by
market trends. Mainly, there are two different situations which create various problematic issues
for Drumgolf and these are followed as under:
 Market competition: In the present time, tour operators of United Kingdom are facing
huge market competition because of globalisation and high use of technology. Both aspects have
influenced positive as well as negative impact on travel and tourism industry. Drumgolf is also
facing problem due to high market competition but by taking help of different tactical as well as
strategic decisions it can resolve all these issues and also can survive in a competitive
marketplace (Phillips and Moutinho, 2014).
 Price wars: Due to the high level of market competition, price wars have also been
increased which affects the financial profit of Drumgolf. To win in price wars, Drumgolf should
set its pricing policy not so high and not so low so, that it can cover its operational expenses and
also can earn enough level of profit.
Moreover, for surviving in the above-mentioned market situation, Drumgolf can take help of
various concepts and strategies such as yield management, fluid pricing and discount offers. By
providing big discounts, Drumgolf can attract the huge number of people and also can achieve
competitive advantage. On the other side, yield management assists an organisation in
identifying buying behaviour of a customer so that it can set most appropriate pricing policy
(Mamhoori, 2015).
Conclusion
By evaluating this section of a report, it has determined that there are various positive and
negative situations in which tour operators have to survive. Without taking help of tactical and
strategic decisions, they cannot survive in the competitive marketplace and also cannot lead to
high level of growth. So, it is highly essential for different tour operators to use strategic and
tactical decisions in worst business situations.
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Conclusion
By seeing this assignment, it has been concluded that travel and tourism industry provides
various benefits to tour operators. For better growth, tour operators should use different
processes, methods and distribution channels so that they can manage their business in the
appropriate manner. For better management of tour package, the organisation should follow all
the stages of creating cost-effective holiday package. For the success of holiday package, tour
operator should give importance to sits stages as well as the time period which will be involved
in the tour package. Before choosing any method, tour operator should analyse the suitability of
method with its tour package. There are various strategic as well as tactical decisions which help
tour operators in managing their business in the appropriate manner. By taking help of such
decisions, tour operators can face any kind of negative circumstances. Apart from this, tactical as
well as strategic decisions help tour operators in surviving competitive marketplace. Different
strategic decisions are used in different business situations so that tour operator has not to face
any challenges.
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