International Travel and Tourism Management: TUI Tour Analysis Report

This report provides a comprehensive analysis of TUI, a major tour operator in the international travel and tourism industry. It begins with an introduction to the industry and TUI's position, followed by an examination of the roles and functions of tour operators, including their impact on the market and comparisons with competitors like Visit Britain. The report then delves into the process of creating and costing a package holiday, outlining the various stages involved, such as market research, planning, contracting, costing, and advertising, along with the time scales for each stage. It also reviews the components that TUI considers when creating holiday packages, such as modes of transport and accommodation facilities. The report continues with a review of a luxury package tour offered by TUI, evaluating how it meets the needs of its target customers. Finally, it analyzes the strategic and tactical decision-making processes within TUI, including their impact on the company's operations and market share. The report concludes with a summary of the key findings and insights gained from the analysis.

International Travel and
Tourism Management

Table of Contents
INTRODUCTION...........................................................................................................................1
LO1..................................................................................................................................................1
Roles, functions of tour operator and comparison between tour operating industry and its
impact...........................................................................................................................................1
LO2 .................................................................................................................................................3
The process of creating and costing a package............................................................................3
LO3..................................................................................................................................................7
Review of luxury package tour offered by TUI that meet its target customers ..........................7
LO4 .................................................................................................................................................9
Strategic and tactical decision making review.............................................................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Travel and tourism industry plays an important part in the present scenario that will
becoming a largest sector in the economy in coming years. It is providing different services to
tourist such as accommodation, food, lodging etc (Khan and et. al., 2017). It is also becoming an
important source of income for people in many countries. It brings large amount of income into
local economy through payment of goods and services by tourists.
Present study will be based upon TUI company. It is a British leisure travel group. Its
headquarter is located at Crawley, West Sussex and listed under London stock exchange. It was
founded by in 2007.
Report emphasized on different roles and functions of tour operators and comparison
between different tour operating industry and its impact on small and larger mass market. It also
includes different stages that will be involved in making holiday package tour of the company.
Furthermore, it includes critical review on package tour that is offered by the company by
targeting its customers that help in fulfilling their needs and demands (Peng and et. al., 2015). It
also includes critical review on strategic and tactical decision made by tour operator while
organizing a tour package.
LO1
Roles, functions of tour operator and comparison between tour operating industry and its impact
Tour operator provides a facility of controlling, booking trips and providing tour
packages to the people. They are operating software that help in improving relationship with
customers that lead to future growth in business. It can be based on domestic as well as
international level.
Role of tour operator
The major role of tour operator is that it is a mediator between suppliers of tourism and
consumers. They are playing a crucial role in satisfying needs and demands of tourists by
offering them different tour package. Travel operators build image in the market by providing
highly significant services to tourist that help in attracting more consumers towards it. As
Foreign travellers are more depended on these tour operators for their travel. Travel agents
perception also play an important role in development of tourism industry. A survey is being
conducted that revealed that small travel agents help in developing tourism industry.
They also help in advertising and promoting business by making brochures. These
brochures help in attracting them towards TUI. They help people in visiting places and familiar
them with that place. Before going for visiting destination travel operator provide all general and
specific information to tourist so that they feel comfortable in asking if they have any doubt
related to planned trip. They must ensure that each and every needs of customer gets met
effectively and efficiently (Deng and Ritchie, 2018). Travel operator of TUI have to make
arrangements for transportation, accommodation for tourist so that they do no have to face any
difficulty while travelling. There are different tour operators such as outbound, inbound,
domestic and direct sell operators. They all are performing different roles in tourism industry by
satisfying needs and wants of customers.
Functions of tour operator
There are different functions of tour operator are as follows:
Travel information:- This is the most important function of travel agent to provide proper
information to tourist regarding its travelling package.
Itinerary preparation:- This includes two types of itineraries such as:
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General:- In this all travel components are combined and designed for appealing to general
tourist.
Special:-This is providing special travel components to tourist that are designed for appealing to
various tourist.
Reservation and ticketing:- Tour operator of TUI is making tickets for customers that are of
airline and railway reservations.
Accommodation reservation:- They are responsible in booking room for tourist in hotel
through direct contacting or through internet sources.
Pricing of a tour package:- Tour agents of TUI is using different marginal pricing techniques
by doing market research and then according to market trends package cost is being decided by
operator.
Travel Insurance:- This is depending upon tour package that is taken by tourist that include
policy which covers medical expense, loss of any item while travelling etc (Zhang and Gao,
2016). In case of foreign tour it is necessary in taking overseas travel insurance.
Comparison between tour operating industry
TUI Visit Britain
It is the second largest company in terms of
providing best travel services to customers.
It is working at small scale and satisfying
needs and wants of customers.
It is providing services that are related to
different activities that is being practised into
business.
It also provided services to customers but small
activities is being performed in business.
It covers larger share market in the country. As it is working on small sector so it does not
have larger part in the country.
In this 54000 employees are working in the
company.
In this there are few members that are working
in the company.
It is listed under London stock exchange
(Woosnam and et. al., 2018).
It is not listed under any stock exchange
market.
In this tall structure is being followed in the
company as it is a large organization so it is
not possible that easy communication takes
place between different levels in the
organization.
Flat structure is being followed in the company
as employees can interact with each other
easily at different level in the company.
For example: They are providing luxury
services to its customers that attract more
consumers in the future.
For example: As it is working on small basis so
middle class people come and take services
from the company.
Impact of integration on tour operating industry
There is greater impact of TUI and Visit Britain on tourism sector as both these sectors
are working differently as on one hand TUI is having larger share in the market as compared to
Visit Britain in the country. Both these sectors are dealing in same industry that help in providing
various facilities to its customers that will be beneficial for the future. As there are different
perspective that is taken into consideration for the purpose of achieving objective of the
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company. There are different segments that will be taken into consideration and help in
providing various facilities to tourist. In coming year it is becoming a larger sector that provide
different services to its customers so that they get attracted towards it. TUI is providing different
services that facilitate in providing various services as consumers are satisfied with it (Du, Lew
and Ng, 2016). The main aim of TUI is to satisfy consumers for the purpose of expansion its
business into various segments that bring more opportunities in the future course of action.
Expanding tourism industry help in getting involved in more activities in the company.
There are various perspective that taken into consideration for improving facilities that is
provided into tourism industry. TUI is dealing in large sector that provide various facilities to
consumers. Tour operator plays an important role in the company that provide information to
tourist. So, this will be having an impact on industry as all the work is being done through online
mode. This will reduce direct communication between consumer and the company as all program
is set down through online mode of payment. Therefore, it is having greater impact on tour
operating industry.
LO2
The process of creating and costing a package
Different stages and components in the creation of package holiday
STAGES
There are various stages involved in creation of package holiday by the TUI Company.
These stages are as follows -
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Market Research – First stage of developing package holiday is to conduct market research. For
the market research, company inquiries various things from the clients such as where they want
to go or how many days, they want to go for holiday or how much they are ready to spend their
money in their travelling etc. Accordingly they conduct market research and decide the best
destination for the travelling for their clients.
Planning – After determining the destination for the travelling of the clients, company starts
doing planning for the clients about their travelling and holiday such as where they will go, how
will they go, which hotel they will stay and what kind of discounts or offers client can get and
what kinds of clients are going etc.
Contracting – In this stage, company does contract with their suppliers. In this contract, every
details related to the travel and tourism services are given to the suppliers which are meant to be
provided to the clients. This is an important stage because it is related to the expectation and
satisfaction of the clients which is very significant for the company's brand image.
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Costing – There are various services and processes in the holiday package which have an
individual cost. It is very important for the determination of the final price of the whole package.
The overall cost should be under the average budget (predicted by the company) of the
customers. Costing of the package holiday involves the ticket price and fare of the transportation,
accommodation service price, cost of ground operators, travel insurance policy and various
another miscellaneous expenditure incurred during the travelling etc. (Moutinho and Vargas-
Sanchez, 2018).
Financial Evaluation and Pricing – After deciding the costing of the package holiday, Company
calculate the final price by using various methods. Here, company look at the most two
important aspects – customers' budget and company's profits. The most common method use by
company is that addition of profit margin into package cost then decide the final price.
Creating a Brochure – After determine the final price of the package holiday, company will
create brochure. It is a document paper. It can be fold form or unfold form. Various information
such as destination, price, discounts and contact details of the organization etc. are include. It is
prepared for the purpose of making decision process easy for the customers of company.
Advertising - Here, after determining every aspects of the holiday packages, company starts
doing marketing and advertising of their various types of package holiday. They can use
traditional as well as digital marketing channels such as e-advertising, display advertising,
holding advertising, social media marketing, email marketing, website marketing and mobile
marketing etc.
Operation and Execution – It is last stage which is involved in the creation of package holiday. It
involves the application and implementation of the plan involve in the package holiday decided
by the company. It will become successful only when it can meet with the customers'
expectations and needs (Raj and Griffin, 2015).
TIME SCALE FOR EVERY STAGES INVOLVE IN THE DEVELOPMENT OF
PACKAGE HOLIDAY
Stages Time Scale
Market Research 7 days
Planning 5 days
Contracting 10 days
Costing 2 days
Financial Evaluation and Pricing 1 days
Creating a Brochure 3 days
Advertising 4 days
Operation and Execution 6 days
Like this, a holiday package is develop by the company and offered to the customers.
COMPONENTS
There are various components which must be looking by TUI Travel Company while
creating package holiday. These components are such as -
Modes of Transport – Company should focus on the mode of transportation to reach at the
destination comfortably and economically. The transportation should be under the budget as
required by the client.
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Accommodation Facility – Another component, company should look upon the facilities and
infrastructure of the accommodation facilities. It should be affordable for the client as well. If the
facilities provided by the accommodation units are not good enough for the client, it can ruin the
customers experiences regarding travelling as well as company too (Mason, 2015).
Food and Beverage – Food and beverage plays an important part in the travelling experience.
Company should get to know about what kind of food and beverage, Customers prefer. Is there
any food item, from which customers are allergic. These all lead company to accordingly provide
food and beverage to their customers so that they can enjoy the meal.
Travel Insurance – It is a kind of insurance policy which cover medical and financial exigency
arise during the travelling. There are various types of travel insurance policies which offer
different coverage. Consumer should take travel insurance. In case, consumer doesn't have it,
company should provide them according to their financial requirements and budget (Vellas,
2016).
Brochure page for Cost of package holiday
Group size 50 Students
Accommodation Rate Per person €125
Visitor Attractions Charges €54
Luxury Coach £7,800
Cost of Local Tour guide €960
Mark-up 25%
Euro/Pound €1.09/£1
Total Cost for Whole Holiday Package
Base cost €6250
+ Attraction cost €6750
+ Coach €8502
+ Tour guide €960
= Total cost €22462
+ Mark up 25%
Sales price of package €28078
Per person €561.55
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Determine and forecast the changes in consumer demand
There are various trends in travel and tourism industry which are changing according to
the demand of customers. Change in demand affect the trends and this lead company to change
in their business process. There are various changing trends which will help TUI Company to
determine and forecast the changes in consumer demand (Backer and King, 2015). These
changes are as follows -
Personalization
This personalization approach will change the demand of the customers for the company.
Before this approach, every things and aspects was chosen by the company only according to
their profitability. But now everything is change. Due to personalization approach, company is
focusing on the needs, wants and desires of their customers, give them opportunities to
customize their own package tour or package holiday which is changing the demand and
perception of their customers towards the company and its brand.
Recognition Technology
Due to high technological advancement, Company is using various recognition
technological devices. These devices recognize the fingerprint, face, voice and eyes etc. of the
company which is beneficial for them to easily record the data of customers on the system
securely. These technologies are being adopted by the company due to change in demand of
customers regarding the security and safety of the customers' personal and financial information
(Timothy, 2016).
LO3
Review of luxury package tour offered by TUI that meet its target customers
This tour package is for 50 students for 7 nights at Ghent. A special rate is provided to
this group that is being proposed by Van der Valk Hotel Nazareth- Ghent by giving 125 euros
per person of two rooms with breakfast in high season. The price of the luxury coach is £ 7800
including cost of two drivers, tour manager and fuel and all road and ferry taxes. Charges of
visitors attraction are €54 per person. The cost of a local tour guide is €960 at the time of tour. In
addition to it is offering 25% for selling and administration cost and profit. As TUI is targeting
customers above 18 age group adult students as they are going for trip an it is feasible to them
and they can be able to enjoy the trip (Mahrous and Hassan, 2017). Company is targeting this
group because adults are having interest of travel from one lace to another so TUI is offering
them this tour package Along with it is also providing travel insurance to adults so that if any
problem occur on trip they will be on safer side. As adults are more attracted towards this type of
tour package that is suitable to them regarding budget as they can afford this type of tour
package. As adult students cannot be able to pay much amount on tour so TUI is offering them
suitable package that will be paid by them.
For fulfilling their needs and demands TUI is offering different services including driver,
fuel and ferry taxes that will be included in their cost. It is also charging less from visitors as
compared to other companies in the United Kingdom. It is creating different distribution
channels in deciding tour package that help students in facilitating while travelling if they get
any problem they will contact through different channel of distribution they can be able to
contact to TUI. Budget is also made based on customers that is being targeted by the company by
fulfilling their needs and demands. There are different perspective that will be taken into
consideration for fulfilling customer's needs and demands for the future course of action. It is
also reducing exchange rates for students that facilitate them in gaining more profit while
exchanging currency (Losada and et. al., 2016). As it is important for TUI to provide proper
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safety and comfortable trip to students so that they will come again and take its services in the
future.
Review of Thomas Cook Company
It is providing different facilities to customers as it provide discounts on festive season or
based on package that is taken by tourist for their travelling purpose. It is providing special
discount to students that are going on trip from their school or college. They are majorly targeted
newly married people that are having interest in travelling on package basis (McGladdery and
Lubbe, 2017). To regular customers it will be offering some additional facilities including
accommodation, food etc. Cost that is charged by it £ 5000 including cost of two drivers. Its
local guide tour guide cost is also less € 800.
From the above review it can be recommended that package tour of Thomas cook is
better as compared to TUI. As it is providing discounts to people that will afford by tourist
easily. Therefore, Thomas cook is fulfilling customer needs and demands because it is offering
lesser amount as compared to TUI that will be more suitable for tourist.
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LUXURY HOLIDAY BROCHURE
Source: Beach holidays with Thomas Cook, 2019
From the above brochure it can be analysed that Thomas Cook is providing special
discount to their regular customers and offers that help in benefiting them for the future. It is also
providing code to tourist through which they are getting discount in their package tour that is
offered by them to their customers. It is providing various facilities to consumers that are helpful
in taking that package for the consumers. As compared to another companies in the country
Thomas Cook is providing additional facilities to its customers that help in bringing more
opportunity for it to grow in the country. For achieving business objectives it is making
marketing plan that help in deciding budget for package tour. It is important in gaining different
perspective that help in growing in the future (Sung, Chang and Sung, 2016). Tour operator of
the company is facilitating various services to its consumers that will help in gaining various
segments in the country.
LO4
Strategic and tactical decision making review
EVALUATION AND RECOMMENDATIONS FOR THE STRATEGIC AND
TACTICAL DECISIONS MANAGEMENT REPORT
To
Senior Managers,
TUI Group,
United Kingdom.
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Dear Top Management Team,
Evaluation of the strategic and tactical decisions of the TUI Company and Thomas Cook
Company
Strategic and Tactical
Decision
TUI Company Thomas Cook Company
Marketing Strategy For the marketing and
promotion of the travel
packages and brand, Company
uses digital marketing
strategies such as social media
marketing, email marketing
and mobile marketing
strategies.
Thomas Cook Company uses
traditional as well as modern
marketing strategies in which
advertising, e-advertising,
social media marketing,
telephonic marketing, video
marketing, email marketing,
mobile marketing and content
marketing etc.
Pricing Strategy TUI Company uses
competitive pricing strategy.
In this strategy, Company
charges the same price as their
competitors are charging from
their customers to provide
differentiate and good quality
products which can meet with
the needs and wants of the
customers.
Thomas Cook Company uses
premium pricing strategy. In
this strategy, Company
charges high prices in
comparison to their
competitors from their
customers to provide them
high quality and high value
products (Medlik, 2016).
Customer Interaction Strategy TUI Company does interact
with their customers through
calling them after service.
Firm also wished them on
every occasion. Also, it takes
feedback from them through
online.
Thomas Cook Company does
interact with their customers
through social media and
telephonic medium. They
conduct various customer
oriented events which help
them to attract various
customers whether they are
new or old. After services,
Company takes feedback from
their clients by questionnaire
methods and by survey.
Employee Engagement
Strategy
TUI Company uses employee
involvement strategy. Under
this strategy, Company
involves their employees in
every aspects of the
organization such as decision
Thomas Cook Company uses
effective listening strategy and
employee involvement
strategy too. In employee
involvement strategy,
company involves its all the
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