Tour Operators Industry: Trends, Holiday Creation, and Strategic Decisions

This report delves into the dynamic tour operators industry, analyzing current trends like food tourism, technology advancement, and solo women travelers. It explores the stages involved in creating holidays, including research, itinerary development, negotiation, and pricing. The report also evaluates different contracting methods, brochure design, and distribution channels. Finally, it examines strategic and tactical decision-making processes employed by tour operators to navigate a competitive market.

Table of Contents
Introduction.................................................................................................................................................3
Task 1..........................................................................................................................................................4
LO1. Understand the tour operators industry within the travel and tourism sector..................................4
P1.1 Analyse the effects of current and recent trends and developments on the tour operators
industry................................................................................................................................................4
Task 2..........................................................................................................................................................7
LO2 Understand stages involved in creating holidays.............................................................................7
2.1 Assess the stages and timescales involved in developing holidays................................................7
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 a holiday from given information below........................................10
Task 3........................................................................................................................................................11
LO3 Be able to review brochures and methods of distribution used to sell holidays.............................11
Executive Summary...........................................................................................................................11
Introduction.......................................................................................................................................11
3.1 Evaluate the planning decisions taken for the design of a selected brochure...............................12
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.............................................................13
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 a luxury tour package.....................14
Conclusion.........................................................................................................................................15
Task 4........................................................................................................................................................16
LO4 Understand strategic and tactical decision making for tour operators............................................16
Executive Summary...........................................................................................................................16
Introduction.......................................................................................................................................16
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.........................................................................................................................................19
Conclusion.................................................................................................................................................20
References.................................................................................................................................................21
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Introduction
Tourism can be defined as a dynamic service is driven industry, where tour operators and other
tourism enterprises need to deliver high quality and great products to its customers. Getting
holiday packages planned by the Tour operators is one of the key trends of the 21st century.
Today Tour operators stand in the forefront of the travel industry, which seeks out new emerging
destinations and leisure experiences to meet the demands of the customers and satisfy them.
They partner with other connected industries like airline, hotels, hire Taxi etc to give a full-
fledged package to their customers. Tour operators sell their holiday packages either through
their physical locations or online bookings. This assignment briefs about the recent trends that
have seen a major growth in the tour operators industry. Discussions will also be made on as how
to a holiday is planned and created, what makes them sustainable, how tour operators sell them
to the customers and strategic decisions taken by the tour operators.
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Task 1
LO1. Understand the tour operators industry within the travel and tourism sector
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry.
Food Tourism
Tourism has recently
experienced a trend of food
lovers in the tourism industry.
People love to try the authentic
dishes of their travel
destinations. The tourism
industry has now brought in
various trends which do not
limit them to fine dining
places. People can learn to
cook their favourite dishes,
roam around farm markets, and
hear the food, culture and
living style of these places and
much more (Kreative, 2017).
Globalization
The globalization today has
diminished the boundaries
Adventurous trips
From bungee jumping, African
safari, hiking mountains,
cycling to swimming with
sharks and dolphins and much
more have seen a lot of trends
these days due to the fitness
freak people. Tour operators
plan the trips accordingly to
satisfy their customers
(Kreative, 2017).
Solo Women Travellers
Today women’s are preferring
to travel alone, packing their
bags, taking the road less
travelled when need a break
from their monotonous life.
Technology Advancement
Constantly upgrading
technology which is a key
demand in today’s world has
positively impacted the tourism
industry. Today customers use
internet services to search their
favorite destinations and book
their travel online. Within the
comfort of their home, they can
book tickets, check availability,
cancel tickets, search
destinations etc. This
technology eases when
provided by the tour operators,
increase their customer base
and earn profits.
The rise in Spending Power
The risen income level has
made the people invest in
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among countries. This
globalization has made
investors invest their money in
foreign trades, thus boosting
the business travel. It has also
made the leisure travel at its
peak by proving opportunities
to the tour operators (World
Travel and Tourism Council,
2015).
Marketing
Tour operators marketing plays
a major role in making the
customers aware of their travel
packages, new emerging
destinations etc. With the help
of marketing by various means
like TV, Radio, social media
etc consumers are well aware
of the services offered today by
tour operators.
Being married or single doesn’t
matter. They prefer to travel
the safe places and keep their
inspirations going (Purohit,
2017).
Wellness Tourism
In today’s world, people have
gone more obsessed with their
health and don’t mind to travel
miles away to take a holistic
experience. They prefer to visit
peaceful natural places for
meditation, yoga retreats,
Ayurveda centres and much
more. It seems to be spreading
50% at a faster pace than
normal tourism (Purohit,
2017).
travelling new destinations.
They prefer to book their travel
through tour operators.
Task 2
LO2 Understand stages involved in creating holidays
2.1 Assess the stages and timescales involved in developing holidays
The report below assesses the various stages and timescales while a tour operator develops a
holiday package. Various contracting methods are being opted by the tour operator as per their
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suitability. In the last section, a selling price of a holiday package will be calculated for the
Grand Casselbergh in Bruges.
Few major stages involved in developing and planning a tour package to develop a holiday plan
and satisfy the customers -
Researching the destination
This activity involves the investigation of varied facilities which can be offered to a traveler for
his selected destination. Foremost tour operators need to identify the political, economic, social,
cultural factors of the place. Then they need to identify the product of adventure, food, historical
places as per the demands of the customer.
Development of travel itinerary
After a successful research of the destination, the second phase is to build an effective travel
itinerary for the customers. Itinerary involves the destination, origin, connected places,
accommodation, transportation and other services.
Negotiation
After the development of itinerary, the next step is to negotiate with the vendors like airlines,
lodging, car rentals, transport operators, sightseeing vendors etc depending on the size and nature
of the tour (Beard, et. al., 2012).
Costing of Tour Package
Since tour operator is not manufacturing the tourism product, it assembles the various
components from tourism vendors to form a tour package. The costing depends on the
market/client requirements like 5-star hotel or 3-star hotel, business class tickets or economy
class airline tickets and much more.
Financial Evaluation and Pricing
After the costing of a tour package, tour operators regulate the exchange rates, estimate the
selling price of a tour, and finalise the tour price. Determination of tour prices in advance, tour
operators may face financial risk in foreign exchange rates, airline tickets, hotel etc.
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Administrative staff
Tour operators hire people who are social, friendly, skilled, humorous, ethical to assist people
during their travel goals and satisfy their love for people, travel, and places. Since its a seasonal
industry, seasonal employment is generated.
Marketing
Marketing of tour packages is done either online or offline means to create awareness among
people about the different travel packages offered by the travel operators.
Brochures
One of the finest marketing strategies by the tour operators to let people know about the
company, destinations covered by them and other facilities are Brochures. Thus, it gives
comprehensive information to the customers about the tourism products.
Execution of Tour
Success depends on how effectively a tour is operated. This phase makes the customers satisfy if
promises are converted into realities. Thus companies should make sure that they are not making
any false promises to customers (Lee, et. al., 2013).
Post Tour management
This phase is involved in the preparation of several reports and further evaluating them, this
figure out the success and flaws in the tour.
2.2 Evaluate the suitability of different methods of contracting for different components of
the holiday and different types of tour operator
The contract means to deal and enter into an agreement between the dealer and the customer.
Mostly two methods are used by the tour operators to design packages i.e. Fixed contracts or
Sale Contracts
Fixed Contracts:
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In this, the tour operators charge for the tour packages as per the volume capacity in order to
cover up their OFF season sale and maximize their revenues. i.e. they book the total capacity
regardless of the consumption rate. Tour operators provide the package on fixed prices to all in
fixed contracts. This may involve large discounts since a large number of people are consuming
the services. For example, the tour operator Air tours entered into a fixed contract of summer
packages assuming that large people will take their services.
Sale only Contracts:
These contracts are relatively high in prices and are costly. These contracts are generally made
during peak seasons where tour operators are benefitted. These contracts make tour operators to
earn high revenues and generate maximum benefits. They focus on the potential customers who
can afford expensive services. For example, Flight centre pays as per the capacity utilized by its
customers. They don’t have to be concerned about the un-utilized space (Holloway &
Humphreys, 2012).
Thus, both contracts have their own positive and negative sides. Fixed contracts offer great
discounts, predetermined profits, advance bookings etc, while sale only contracts reduce wastage
of the utilized seats and focus only on target customers.
2.3 Calculate the selling price of a holiday from given information below.
Grand Casselbergh in Bruges has offered a special rate for a tour package where 90 euros are
charged per person for a twin bedded room with breakfast (i.e. two people sharing one room).
The price for a luxury coach with 45 seat capacity is £7,400 which includes tour manager, two
drivers, and fuel and road-ferry taxes. The tour guide cost €920 for the entire tour. The tour
operator company marks-up a 30%. The spot exchange rate is €1.15 per £1.
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COST Calculation Amount
Room cost 45 * € 90 € 4050
Transportation cost £7,400 € 8510
Tour guide €920 €920
Total Cost € 13,480
Tour operator margin 30% € 17524
Thus the selling price of the holiday package including the 30% profit of the tour operator is €
17524.
Thus, it can be concluded, that tour operators need to go through various stages like researching
destinations, itinerary development, negotiation with service vendors, pricing etc for a holiday
package. Fixed Contracts and Sale only contracts are two major methods opted by the tour
operators as per their business requirements.
Task 3
LO3 Be able to review brochures and methods of distribution used to sell holidays
Executive Summary
According to Andereck (2014), Even though, technology today has seen a great advancement,
traditional approach of brochures are still popular sources of information for the customers.
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Brochures are designed by the myriad of tourism businesses, which is widely used by the
consumers. Their main aim is to impart information about travel packages to a maximum number
of people at a much lower cost. For a suitable and knowledgeable brochure, it is important to
compile the requirement of customers, plan, organize and implement.
Introduction
While working with the marketing department of trail finders, the discussion will be made on the
designing of brochures and selling them in the market. It will also asses the alternative
approaches to traditional brochures. Thus, this report will evaluate a brochure and its role in
influencing visitors.
3.1 Evaluate the planning decisions taken for the design of a selected brochure
Few important decisions considered during the design and development of brochures is -
Identify the issues that affect the decision planning
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Before designing any brochure it is important for the tour operator company to identify issues
like potential customers, the format of the brochure, information to be conveyed, the time limit to
make the brochure available etc.
Brochure Format
Brochure format should be in a way that it gives a clear understanding of the tour to the
consumers. Before finalizing a brochure format, potential customers and information shared
should be kept in mind. It is also essential for a brochure to have basic information like name of
the tour operator, contact number, email id, destination description, mode of transportation,
prices, health hazard issues etc.
Target Market and Budget Description
The brochure designing is also affected by the budget and the target market. Because this helps
in considering the actual cost that needs to be incurred and the target audience is focused.
Stage and Time Limit
The brochure must be planned and designed in a designated time frame. Entire planning,
designing, organizing, implementing must be done within the allocated time slot (Christou,
2012).
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.
Tour operators most often use the tri-folded brochures to deliver their travel details and message
to potential clients. Various alternatives have replaced the traditional brochures to impart
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information to the travelers. One such method is using the advanced technology and builds E-
brochures that results in faster communication and generating more attractive brochures. A
company aims to design e-brochures to reduce the paper cost and £4 billion annually which is
spent on printed promotional materials like brochures. They believe in using digital technology
to cut the production, storage and distribution cost of the traditional printed brochures (Travel
Mole, 2004). Designing through advanced technology and online means results in more
attractive brochures which offer more clarity, attractive fonts, eye-catching images etc. These e-
brochures can be easily promoted through various means like social media sites - Facebook,
twitter, google+ etc, Televisions, etc. Video brochures can also be designed to be played on
televisions and online sites which are more attractive to the customers. It is suggested that
TrailFinders adopt for e-brochures rather than traditional brochures to reduce the production
cost, distribution cost and target a large number of customers.
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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 a luxury tour
package.
In this rapidly changing tourism industry, it is essential for the tour operators to create a good
balance between the distribution channels of tour operators and the customers. Few distribution
methods used by TrailFinders to sell their holidays are -
Website of the tour operator -TrailFinders
Booking the tickets directly from the company website is the most preferred distribution channel
for the tour operator. They are able to optimize their margins and price, they don’t have to give
any commissions to the third party and are authentic.
Social Media
One effective way to reach new customers and increase the customer base is promoting their
travel packages on social media means like Facebook, Twitter, Instagram etc. Social media is
like a word of mouth travelling in less time.
Visitor Information centres
Most of the tourist destinations have information centres which are located in different metro
cities. The agents working here recommend travelling information like tour operators and other
information to the customers. Tour operators can partner with these VICs to sell their travel
tours, and give a percentage of earnings to them as a commission (Tran, 2018).
Hotel Concierge
Hotel Guest asks the hotel receptionist about the local tour travellers and guide. Tour operators
can partners with them on a commission basis, which will give these operators good business.
Google tour business
Tour operators must list their business with Google. They can provide their details like operating
hours, contact details, direction details, email id etc on Google search and Google Maps (Fuggle,
2016).
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Conclusion
Thus, from the above management report it can be concluded that for selling their businesses,
tour operators need to consider various ways of marketing to increase their customer base and
huge revenues. They can opt for distributing printed brochures or e-brochures to market their
product in the market and sell their business to customers. They can also have ties to various
information centres, hotels, restaurants on a commission basis to promote their brand. They can
also market their product directly from their website or other social media means.
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Task 4
LO4 Understand strategic and tactical decision making for tour operators
Executive Summary
The business operators are quite active in taking strategic decisions to step in and excel the
competitive dynamic tourism market. The dynamic market and ever-changing trends make the
tour operators to actively participate in taking strategic decisions. These include pricing,
surcharge policies, brands recognition, holiday tour etc. Thus both strategic and tactical decisions
must be taken in an effective and efficient manner.
Introduction
In the below management report, discussions will be made on the strategic and tactical decisions
taken by the tour operators to step in the dynamic market. The comparison will be made on the
tactical decisions taken by the tour operators in varied situations.
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4.1 Evaluate the strategic decisions made by different types of tour operator
According to Christou (2012), few strategic decisions made by the tour operators are -
Pricing Strategies - Tour operators’ first need to consider the spending power of their customers
that they may incur in travelling. So it is vital for the tour operators to take decisions while
considering the tour prices. They can also offer few discounts to their loyal customers and other
offers to new customers to gain their trust and loyalty (Katou & Chand, 2012).
Surcharge Policy - It is the additional value or fees added by the tour operators. Tour operators
must charge the amount which is not objectionable by the travellers. Surcharge policy may create
issues among the tour operators and the customers.
Branding - it is an intangible asset which makes the business popular among customers and
earns huge profits by earning a large customer base. It is not just important to promote the brand,
but it is also important to maintain the reputation by converting the promises to realities. Tour
operators can promote their brand through various means like social media, TV, radio,
brochures, hoardings, newspapers etc. Tour operators must make sure that they do not make false
promises to the customers to maintain their brand value (Chand, 2011).
Product Choices as per customer - Proper advertisements leads to attract large customers. Tour
operators need to take decisions of presenting their product in a way that it interests the
customers. Destinations, offers, facilities play a major role in presenting the destination plan
among the travellers. They should give pictorial information to attract customers and have
products launched in multiple ways to satisfy different income level groups.
Competition - In today’s world, where people love to travel tour operators businesses have seen
a high demand. With increasing demand, competition increases. This competition if not handled
strategically may hamper the growth of tour operator businesses. These problems may be
overcome with the help of advertisements on YouTube, social media, televisions etc. Thus a
proper advertising policy must be planned for a better growth of the business.
Price wars - Excessive competition leads to dynamic changes in the profits earned by the
business. Few businesses may even have to sell their tours without any profits even after a huge
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client base. Thus, price issues must be effectively resolved by the tour operators to enhance their
performance and not compromise with the profits.
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4.2 Compare the tactical decisions that could be taken by a selected tour operator in
different situations.
Varied tactical decisions are made by the tour operators in their daily businesses. Negotiating
with various service providers - airlines, hotel, car rental etc, partner with information centres,
hotels, restaurants etc to promote their business on a commission basis are few tactical decisions
taken by the tour operators. Proper quotations and proposals are designed by the stakeholders to
invite service to provide to join hands with them. Service providers then pick up the best
quotation with the objective to minimize the cost of goods and services to the customers and
benefit them at the same time. These tactical decisions taken by the tour operators depend on
various situations like the price offered by the competitor, fuel and transportation prices,
currency fluctuations etc. For example, two operators are offering same holiday package to the
customers. Here to stand out among the customers, they can add some value-added services to
their package (Earth-net, 2013).
Conclusion
Thus from the above management report, it can be concluded, that strategic and tactical decisions
play a very crucial role in the success of any businesses. They should not neglect these decisions
as their inability to plan their policies may hamper their growth. Thus proper planning and
decisions can enhance the travel business.
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Conclusion
From the above assignment, it can be concluded that tourism business has seen a huge growth in
recent years with the recent travel trends like solo travellers, technology, marketing,
globalization etc. Tour operators plan holiday packages in different stages where each stage has
its own importance. Brochures, e-brochures are few means of advertising their holiday packages
to large customers and generate huge revenues. It is also important for the tour operators to take
strategic and tactical decisions to succeed in their businesses.
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References
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