Effective Strategies for Tour Operator Business

This document explores the importance of strategic planning in the tour operator industry, highlighting key concepts such as professionalism, service quality, and distribution channels. It draws on various sources including academic journals and online resources to provide a comprehensive overview of the industry. The document aims to assist students and professionals in understanding the complexities of the tour operator business and developing effective strategies for success.

TOUR OPERATIONS
MANAGEMENT

Table of Contents
Introduction......................................................................................................................................3
Task1 ...............................................................................................................................................3
AC1.1 Effects Of Current And Recent Trends And Developments On The Tour Operation
Industry...................................................................................................................................3
Task 2...............................................................................................................................................6
AC 2.1 The Stages And Timescales Involved In Developing Holidays................................6
AC 2.2 Suitability Of Different Methods Of Contracting For Different Components Of The
Holiday And Different Types Of Tour Operator's Regulators...............................................7
AC 2.3 Calculations Of Selling Price Of A Holiday Using Various Components................9
Task 3 ............................................................................................................................................10
AC 3.1 The Planning Decisions For Selecting The Design Of The Brochure.....................10
AC 3.2 Alternatives To A Traditional Brochure For Different Types Of Tour Operator....11
Operator. ..............................................................................................................................11
AC 3.3 Different Methods Of Distribution Used To Sell A Holiday For Different Types Of
Tour Operator.......................................................................................................................11
AC 4.1 The Strategic Decisions Made By The Different Types Of Tour Operator.............12
AC 4.2 The Tactical Decisions Taken By The Tour Operator In Different Situations........13
CONCLUSIONS............................................................................................................................14
REFERENCES..............................................................................................................................15

Introduction
The tourism industry focuses on to providing travel services to its customers and it
includes the business and functions that help in planning of the tour. Management of the tour
operations is the very important task that focuses on satisfying the customers by providing them
with the holiday packages, detailed information of the tour and reservations are also done. The
tour operation management aims at attracting the customers and satisfies them by providing best
services and experiences. The lcb tours company was established in 1995, and provides services
in tour and travel industry. The company focuses on to satisfying the customers, by meeting their
needs and wants and ensures to provide them with the best travelling experience. In the present
study, recent trends and developments on the travel and tourism industry is explained. And the
research also includes different brochures being prepared for distribution which can result in
attracting the visitors and achieving the organizational objectives.
Task1
AC1.1 Effects Of Current And Recent Trends And Developments On The Tour Operation
Industry
Current And Recent Trends
The tour and travel industry is
growing and developing at
fastest possible rate because of
the changing demands of the
customers or visitors. The
needs and wants of visitors are
changing day by day and in
order to meet those demands,
the tour and travel industry
brings changes in its
operations of the business and
facilitates them with the best
Inbound Tour Operator:
The inbound tour
operator generally deals with
foreign tourists who are
visiting in their country and
characterize themselves like a
host. The inbound tour
operator provides services of
transportation, accommodation
and sightseeing to its visitors,
they also provide
entertainment and currency
UK Bound Tour Operator:
The UK bound tour
operators provide service of
tour and travel in the country
UK. The services provided
include accommodation,
reservations, entertainment,
sight seeing, etc. The UK
bound tour operators are
experiencing growth and
development as it is the most
famous place visited by

possible services. There are
various types of tour operators
that provide various types of
services. The effects of current
and recent trends and
developments on the tour
operator industry are explained
below.
The tour operator provides the
facilities to its visitors, it
includes traveller's tickets,
hotel reservations, commuting
from airports to hotels and
make arrangements in the
hotels and sightseeing as well.
There are different types of
tour operators, such as
inbound, domestic, UK bound
and specialist tour operators.
exchange service, etc.
Thomas cook tour is
one of the inbound tour
operator and provides services
of tours and travel in the
country UK. The Thomas
cook tour company started his
international business of tour
and travel in the year 1841.
The Thomas cook tour provide
services to all size of groups
and are available in many
languages and aims at making
profits. They also focus on
providing health and safety
facility to its visitors. The
Thomas cook tour integrate to
merge with agents in order to
save cost and make more profit
and grow in the global
markets. Thomas cook also has
chain distribution with the
companies as hotels, travel
agencies, tour operators, etc.
Domestic Tour Operator:
The domestic tour
operator provides services to
local or domestic people who
are travelling the places in
people. The UK bound tour
operators are extending their
long-haul programmes and
also encouraging many
destinations to develop
tourism packages.
Specialist Tour Operator:
The specialist tour
operator specialise in specific
destinations or place. The
specialist tour operator also
specialise in providing special
games and experience to its
visitors. This tour operator
encourages visitors to try to
experience thrilling,
adventurous activities, it
includes, paragliding, hiking,
trekking, mountain climbing,
etc. They also care more
towards the places, people and
environment and also avoid
providing harm to the nature.

their own country. The
domestic tour operator
provides services and make
people visit to national parks,
cruises, mountain areas etc.
and also hiking, trekking is
done and many adventurous
sports games are also played.
The domestic tour operator
provide accommodation
reservations in hotels,
transport facility, sight seeing
and itinerary guidelines.
Current/Recent Trends And
Developments On The Tour
Operators Industry
The tour and travel
industry focuses on provide
the best experience of travel to
its visitors and make them
happy and satisfied with the
services. The demands of
visitors are increasing day by
day and in order to meet those
demands and fulfil their needs,
the tour operators come in
with innovation and creation
in the operation management.
 Advancements In
Technology: The
 Increased
Environmental
Awareness And
Responsible Tourism:
The industry focuses
on maintaining the
environment and
conservation of
sensitive areas of
nature and also wildlife
habitats. The tour and
travel industry
manages its operations
in a way that it doesn't
affect the awareness of
environment and
nature. The visitors are
 Low Cost Carriers:
The important
development in travel
and tour industry is
development of low
cost carrier services
provided by the tour
operators. This
technological
advancement benefits
the tour and travel
industry in transporting
visitors from one
destination to another
in cheap costs.

advancement of
internet has benefited
the tour and travel
industry as it is easy to
use and operate and
facilitate in fast supply
of information to
anyone. The
digitalization of
business operation
facilitates the travel
and tour industry.
also guided to
appreciate the
awareness towards
nature and not harming
the wildlife and
environment.
Task 2
AC 2.1 The Stages And Timescales Involved In Developing Holidays
A holiday package tour comprises various components such as transport facility,
accommodation facility, entertainment services, sight seeing, etc. These all are considered are
while planning for the holidays by lcb tour operators(Chand and Dahiya, 2014).
 Market Research: The first step of developing a holiday is to conduct research of the
destination. The market research will make the tour operator understand the place, its
scenic view, other entertainment facilities which can be available for visitors,
accommodation facilities and travel services, etc. The lcb tour operators conduct market
research in order to identify the favourite and demanded destination of the people.
 Planning And Scheduling: Planning and scheduling steps is also refereed to as making
an outline of the holidays plan and it also covers main parts of the holiday. The planning
and scheduling is done in order to identify the task and it also includes various steps and
actions that needs to be taken to accomplish the task of developing holiday. The lcb tour
operator further create plans and schedule the activities and involve employees to take
further actions according to the plans.
 Contracting: the next step is contracting which involves different channels that are
needed in holiday packages. So, the lcb tour operator then make contracts with various

distribution channels such as hotels, travel agents, and other agents. The selection of
distribution channel is based on demands of customers identified in market
research(Stern, 2005).
 Costing The Holiday: The costing of the holiday destination is made by considering all
the relevant expense and it includes all the cost which will take to produce and distribute
the holiday package. The lcb tour operator calculates all the expenses made in order to
make the package or holiday. It includes transportation cost, lodging and accommodating
facilities provided and sight seeing expenses.
 Financial Evaluation And Pricing: The evaluation is made to finalise the price of the
holiday package offered to visitors. The lcb tour operator considers all the expenses
occurred, demand of the destination place and economic state of the country in order to
evaluating the final price or cost of the holiday package.
 Creating The Brochure: the tour operator then prepares the brochure of the holiday
package. The brochure is the promotional document that includes various information
about the holiday destination, available scenic points, other facilities being provided by
the tour operators(Yin and Poon, 2016). The lcb tour operator focuses on to create
innovative and creative brochures that attracts the visitors.
 Advertising: The advertising of holiday package is done to attract customer and through
various media channels such as E- brochure, social media, newspapers, radio, etc. The lcb
being an inbound tour operators focuses on advertising its holiday package through
internet and uses various online social mediums.
 Operation And Execution: The tour operators then focus on executing the plans and
actual services of tour and travel are provided to visitors. The lcb tours operator aims at
executing the plans and provides the best services to its visitors and so operations are
managed in that way.
 Post Tour Management: the lcb tour operators then takes the feedback of visitors for
holiday packages. This is done in order to identify the quality of their services, and if
needed, change are made in the operations. The tour operators aims at providing best
services and experience to its visitors(Jenkins, 2013).

AC 2.2 Suitability Of Different Methods Of Contracting For Different Components Of The
Holiday And Different Types Of Tour Operator's Regulators
Different methods of contracting
Tour operators come in contract with different types distribution channels, travel agents,
hotels, etc. The contracts are made so that they can provide services to visitors on behalf of the
tour operators. There are various types of contract which can be made according to the demand
of situation or destination.
 Fixed contract: the fixed contract is made between tour operator and travel agents or
hotels who provides services to visitors in holiday. Lcb tours fixes contract with air line
companies so that it can have benefit of cheaper price(Abell, 2017). Tour operators fixes
contract with hotels so that it creates trust and loyalty of hotel and get benefits.
 Allocation: This type of contract between tour operator and distribution channels or travel
agent can allow the benefit of cheaper price as this is related to advance booking. The
allocation contract is made so that tour operator fixes or reserves booking for future
demands by visitors. The lcb tour operator books advance tickets in air lines as it knows
the seasonal visit to a certain destination by visitors and makes allocation contract with
air lines.
 Ad-hoc: This type of contract is made by the tour operator with services providers like
agents, travel companies or hotels in order to meet the certain demand made by the
customers. The Lcb tour operator make ad-hoc contracts with various hotels and air line
companies so that it can fulfil certain demand of visitors(Ap and Wong, 2011). The
sudden demand of extra room and ticket for added passenger can be fulfilled by the ad-
hoc contract.
Regulatory Bodies
The regulatory bodies facilitate management of tour and travel industry so that it benefits
the public safety. The regulatory bodies involve everything from hospitality, employment and
public health regulations as well and it includes various bodies such as Association of British
Travel Agents, Association of Independent Tour Operators, Federation of Tour Operators, UK
Civil Aviation Authority, etc.

Association of British Travel Agents acts as a travel trade association and it aims at
raising standards in the travel industry by providing guidances on certain issues. It also provides
schemes of financial protection and ensures to present the fair deal to public(Frochot, 2003).
The Association of Independent Tour Operators represents approx 120 specialist and
independent tour operators operating in over 170 countries. And to be a member of this
association, the tour operators must have full consumer protection, and this association also
uphold high standards within the tour and travel industry.
Federation of Tour Operator aims at to bringing improvement in affecting holiday areas.
This includes departure point, in the journey, and accommodation in hotels, and safety standards,
etc. It also includes problem of aviation matters faced by tour operator associations. The
federation of tour operator focuses on to ensure the safety of visitors from start point to final
destination.
UK Civil Aviation Authority regulates all the prospects of UK aviation. It is a statutory
corporation and it supervises issues relating to aviation industry of UK. It includes training of air
traffic engineer, en-route telecommunication, managing the security standards, etc.
AC 2.3 Calculations Of Selling Price Of A Holiday Using Various Components
It is very essential to put a reasonable price of a tour package, and it should include all
the expenses occurred plus the margin profit for the tour operators(aloglu and Mangaloglu,
2001). Various cost needs to be considered while fixing a price of the holiday package, such as
fixed and variable cost, direct and indirect cost, marketing expense, seasonal flexing, mark-up
profits, etc. The lcb tours and Thomas cook tours calculates the selling price of a holiday
considering various important components and the comparison is given below.
Various components considered
while planning a holiday to
Singapore(amount in Euros)
Lcb tours Thomas cook
Operating cost 58 65
Airline tickets 88 75
Miscellaneous expenses 28 30
Hotel booking cost 120 135
Advertising & printing of 12 10

brochure
Transport from airport to hotels 35 42
Mark-up profit 15.00% 20.00%
Total Selling Price Of A
Holiday Package
392.15 428.4
Task 3
AC 3.1 The Planning Decisions For Selecting The Design Of The Brochure
Decisions are made to select the design of the brochure by considering various
elements(Chand and Katou, 2012). There are many factors which affect the design of brochure,
such as cost budget, stages of production, print specification, etc.
 Cost: The cost of the brochures depends upon various elements such as its design,
effectiveness and attractiveness, distribution channel used, the paper quality or print
quality, etc. The cost also includes number of brochures printed and distributed. The
distribution channel used for brochure may be internet or social media which doesn't cost
much to tour operator, and the price of brochure would be less than compared to other
mediums.
 Deciding format: the selection of design of brochure is done by first deciding the format.
There various types of format available for brochures, it can be single paper, or two
folded or three folded, or it may also be booklet. The format is decided by tour operator's
by considering information matter and destination's activities covered in holiday and to
give full information of package(Chand and Dahiya, 2014).
 Target market and budget: the quality of the brochure's print depends upon quality of
target market. For example, the specialist tour operator would go for high quality of
prints for its booklet brochures as to it has to attract specific market and requires
attractive brochures, and so its budget of brochure needs to be high.
 Determining print specifications: the quality of print depends upon the destination, target
markets, and budget, etc. The lcb tour being inbound tour operator makes its brochure
very attractive to attract foreign visitors, it also makes every detail clearly visible in
brochure and keeps its budget high in printing of brochure(Frazier and Summers, 2014).

 Timescales and stages of production: while selecting the design of a brochure, season-
ability, demands of target markets are kept in mind. So, the final brochure can meet the
demands of target customers and give full information regarding the destination.
AC 3.2 Alternatives To A Traditional Brochure For Different Types Of Tour Operator
Operator.
 E-brochure : E- brochures are the online brochures and available in electronic format. The e-
brochure are very effective for inbound and outbound tour operators as it is very flexible,
adaptable and capable of attracting the foreign customers. The e-brochures are attractive and
time effective and one can have quick response from it(TOP 10 WAYS TO DISTRIBUTE
YOUR BROCHURE TO THE RIGHT TARGET AUDIENCE, 2015).
 Outdoor media: the brochures available on outdoor media are effective as this way of
distributing channel allows spread of information to wide range. The domestic tour operator
can take maximum benefit of the outdoor media in distributing the brochure information.
 Internet: internet is used by almost everyone in the world-wide. This can be the best platform
to publish the brochure for a tour company. The inbound and outbound tour operators can
make the best use of internet to upload its brochure and attract the visitors.
 Social Media: the social media is also large platform used all around the world and can be
used as a distribution channel for tour operators. The domestic and inbound tour operator can
use the social media channel as an alternative for its brochure.
 Radio/ TV Advertising: the distribution channel can be radio or TV advertising for tour
operators. The domestic tour operators can advertise its product or services on TV or radio
and attract local visitors(Frochot, 2003).
 Press: this type of distribution channel can be best utilized by the domestic tour operators.
Advertise of brochure of holiday package is given the local newspaper or magazines and it
can attract local or domestic visitors.
AC 3.3 Different Methods Of Distribution Used To Sell A Holiday For Different Types Of Tour
Operator
Following are some methods of distribution used by tour operators to sell holiday packages to its
customers.
 Direct Distribution: direct distribution of brochures is done to public. In direct distribution
intermediaries are not involved and tour operators directly come in contact with end

customers(Jackson, 2007). This is used by domestic tour operators to attract local or
domestic visitors.
 Two level Distribution: there are two intermediaries in distribution process. This kind of
distribution is time consuming and costly and mostly adopted by inbound tour operators to
sell the holiday packages.
 Through social network website: the brochures are uploaded on social networking sites so
that it can spread among large numbers. The inbound and outbound tour operator can use this
method of distribution to sell the holiday package.
 Government website: government websites are used to upload brochure and sell holiday
package so that it can attract visitors. Generally, domestic tour operator selects government
websites to sell holiday package and aims at encouraging quality standards of products and
services.
 Online travel agencies: the online travel agents are the best way to distribute and helps in
selling holiday package(Jenkins, 2013). Many people and agencies are connected to online
agent which can benefit the inbound and outbound tour operator to attract the customers from
world-wide.
AC 4.1 The Strategic Decisions Made By The Different Types Of Tour Operator
The tour operators takes strategic decisions regarding various components, such as,
deciding the price of the holiday package, selection of distribution channel, positioning of brand
image of company, etc. by keeping in mind the objectives of the business.
 Pricing Strategies: the effective pricing strategy of a tour operator allows it to develop brand
image and increase the market share. The proper pricing strategies can be made by
considering essential components such as seasonal pricing, competitor's price, operating cost,
rack rates, discounts or package deals, distribution cost, etc.
 Surcharge policy: the surcharge is an additional fee paid by the clients or visitors who book
their reservations with the tour operators. Surcharge policy allows a tour operator to handle
the extra cost occurred after the holiday reservation such as currency fluctuation(Molina and
Esteban, 2016). So, the tour operators make strategic decision in making the surcharge policy
for the company.
 Positioning and Image/branding: the tour operators make very strategic decisions so that it
can create a brand image of company in the markets. Tour operator aims at creating
awareness of its brand among customers and positioning brand image and achieve
organisational objectives.
 Choice of product in relation to customer portfolio: the main aim of tour operator is to satisfy
visitors so that it can create a brand image which will benefit the whole company by

achieving its objectives. So the tour operator makes strategic decision in regard to offering
the best possible services and products to customer and satisfy them.
 Distribution decisions: the most important decision made by the tour operators are selection
of distribution channels because an effective selection of channel will result in attracting the
right customers ultimately benefiting company in achieving objectives(Sheldon, 2006). The
right selection of distribution channel's decisions is strategic and it makes the company to
create awareness of brand in the minds of customers.
AC 4.2 The Tactical Decisions Taken By The Tour Operator In Different Situations
The tactical decisions made by the tour operators in different situations lead them to
achieve organisational goals and objectives. These decisions are changeable and allow a tour
operator to focus on how they are going to do the task.
Tactical Pricing: The decisions related to pricing of brochure or holiday packages are very
tactical. All the components needs to be undertaken while planning the pricing strategy. The
lcb tours management takes the pricing decisions by considering all the relevant components
and including the mark-up profit of the company. For example, the lcb tour is facing a large
competition, and the sales are very low(Stern, 2005). Then the lcb tours takes decisions of
lowering down the price of its holiday package so that it can attract customers. The low cost
price of holiday package will attract the customers, and lcb tour can create its brand image
and name through providing better services and sustain in competitive market.
Tactical Marketing: This is the very important decisions made by the management of travel and
tour operators. The decision of marketing affects the business of the tour and travel company
as this factor allows promotion and marketing of the product and services offered by tour
operators. For ex. The lcb tours are facing a phase of low business, it lacks the promotion of
business activities. Then the management takes the decision of changing its marketing
techniques in order to make effective and proper marketing of its services in right market
and attract customers. So, marketing channel or media mix allows the lcb tours to advertise
its brand name and image, and the services provided by the company which helps to attract
the customers or visitors(Yin and Poon, 2016). Therefore, selection of marketing mix in
advertising and promoting the tour company is tactical decision made by the tour operators
in different situation.

CONCLUSIONS
The management of tour and travel industry requires its business operations to be
innovative and creative in order to meet the changing demands of the customers. The industry
needs to make good relationship with hotels and travel agencies in order to provides the best
possible services to its customers. The above study states that the management needs to make
effective tour package that attracts the visitors and also provide them with detailed information
of the package. The research also states that the tour operators needs to make strategic decisions
while preparing effective strategies in order to attract customers and also satisfying them and
ultimately achieve the objectives of the business.

REFERENCES
Books And Journal
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Jenkins, O., 2013. Photography and travel brochures: The circle of representation. Tourism
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Sheldon, P.J., 2006. The tour operator industry: an analysis. Annals of Tourism Research.13(3).
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Stern, L.W. ed., 2005. Distribution channels: Behavioral dimensions. Houghton Mifflin Harcourt
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Yin, C.Y. and Poon, P., 2016. The impact of other group members on tourists’ travel
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