Analyzing Tour Operation Management for Thomson Holiday in the UK

This report provides a comprehensive analysis of tour operation management, focusing on the practices of Thomson Holiday, a UK-based tour operator. It begins by examining the effects of current trends, such as e-commerce, changing consumer habits, and the growth of regional airports, on the tour operating industry. The report then delves into the process of developing a sightseeing tour package for Chinese students from London to Paris, outlining the timescales involved in destination examination, market research, planning and scheduling, and forecasting. Different methods of contracting, including allocation, sale only charter, and commitment contracts, are evaluated for their suitability in securing various components of the holiday. The report also covers the calculation of selling prices, the planning decisions behind brochure design, and the suitability of alternative distribution methods. Finally, it evaluates the strategic and tactical decisions made by tour operators in different situations, offering valuable insights into the complexities of the tour operation management. The report concludes by summarising the key findings and recommendations for enhancing tour operation effectiveness.

TOUR OPERATION
MANAGEMENT

TABLE OF CONTENTS
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1.1 Analysing the effects of current and recent trends and developments of tour operator’s
industry........................................................................................................................................3
Task 2...............................................................................................................................................5
2.1 Assessing the time-scales involved in developing this holiday.............................................5
2.2 Evaluating the suitability of different methods of contracting for different components of
the Holiday...................................................................................................................................7
2.3 Calculating the selling price of a holiday from given information below.............................8
Task 3...............................................................................................................................................9
3.1 Evaluating the planning decisions taken for the design of the brochure...............................9
3.2 Assessing the suitability of alternatives to a traditional printed brochure...........................11
3.3 Evaluating the suitability of different methods of distribution used to sell a holiday.........11
Task 4.............................................................................................................................................12
4.1 Evaluate the strategic decisions made by different types of tour operator..........................12
4.2 Comparing the tactical decisions that could be taken by a selected tour operator in different
situations....................................................................................................................................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................15
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Index of Tables
Table 1: Selling price of tour...........................................................................................................9
Table 2: Calculation of selling price for Chinese students for 5 days...........................................10
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INTRODUCTION
Tour operation industry is an important constituent of travel and tourism sector. For
offering various services as a completed package to the customers, tour operator plays a
significant role (Bernick and Boo, 2013). To provide tour and travel services and to increase the
growth of company, business of tour operation is engaged and linked with other businesses. To
create a package holiday, a tour operator combines several tours and travel components such as
transportation, accommodation and other facilitates. Tour operator advertises and produces
brochures with a motive to promote their products, holidays and itineraries in UK or outside the
country. Tour operation management is controlled and maintained by the tour operator. With the
help of this, it offers a wide range of services to the customers. Apart from that, they also play a
vital role in promoting a destination. Present report is based on Thomson Holiday, a UK based
travel operator and subsidiary of TUI group. The headquarters of Thomson UK are in Luton,
England (Thomson holiday. About us, 2016). Purpose of the report is to understand tour
operators industry, stages involved in creating holidays, brochures and methods of distribution
used to sell holidays, strategic and tactical decision making. To achieve the purpose, report
explains the tour operator agency within travel and tourism sector. Furthermore, different stages
involved in creating holidays are explained in this report.
TASK 1
1.1 Analysing the effects of current and recent trends and developments of tour operator’s
industry
For developed countries, tourism industry has become one of the economic drivers.
Standard growth rate of tourism sector is quite better as compared to growth rate in other sectors.
Different trends and developments have occurred in tour industry that is driving change in the
whole sector (Swarbrooke and Horner, 2012). Some recent and current trends that affect the tour
operational company are as follows: E- commerce- Adoption of e-commerce results in all things are going to be online
Hence, this is the revolutionary change in all business markets. This is because; people
choose cheaper and low cost products and services through internet. In recent scenario,
most of the customers book their ticket online (Page, 2011). This makes them easier and
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save time as well. By adopting e commerce in business, tourism industry has been
scattered worldwide. It becomes easier for the consumers to travel to different places as
they easily get to know various suitable packages online, booking of tickets, etc. Hence, it
affects the cited company, they have to upgrade their technology. With the help of this
they can fulfill their goals and can also increase customer satisfaction (Swain, 2016). Due
to adopting e- commerce by Thomson Holiday, it has become possible that there will be
increase in number of foreign and domestic tourists in UK. Increase in-dependency of travellers: In recent years, people are using online marketing
in order to save their time and get information at one place. Along with online shopping,
people of travelling field concern online travelling company in order to get better services
at the lowest cost (Ryan, 2015). In order to maintain their brand, online traveller firm
provides better quality and services, retail stores, website and call centres as well as third
party travel agents in order to increase customers' satisfaction. Increase in spending habits: People of UK have become capable for earning more
income because of increase in the economic growth. With this, spending habits of people
would also get changed as their power to spend money will get enhanced. To attract
customers, emergence of various opportunities is offered by the tourism sector. To
increase the profitability of company, they start focusing on satisfying customers by
providing them better services as well as by getting feedback from them (Brito and
Pratas, 2015). This will help the firm in knowing level of customer satisfaction level as
well as other things which they need to improve in their company. Growth of the regional airports: Nowadays, people are more interested in making tour
plans. The reason is increase in the growth of regional airport in UK. With expansion of
regional airport, other companies start providing services at low cost in order to attract
customers. Many airports are charging lower prices for landing planes which will
increase the growth of aircraft industry (Jones, Hillier and Comfort, 2016). Flexibility of booking the tickets: As online facility of booking tickets is available, with
the help of this, people can easily book their tickets anytime. This will enhance profits of
the whole tourism industry. Thomson Holiday is also providing online facility to their
passengers so that they can make easy booking of their tickets.
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 Natural disasters: Happening of natural disasters also affects the business of tour
industry. There are many natural disasters that affect the industry. In order to increase the
customer satisfaction, Thomson needs to give services accordingly so that customers
would not lose their money and time too (Tsang, Lee and Qu, 2015). Many natural
disasters such as earth quake, volcanic eruptions and tsunamis are there which affect the
business of tour industry. For example, in Europe, at the time of heavy rainfall, no planes
take off which affects the tourism industry. Due to natural disaster, company loses
massive amount of money.
TASK 2
Scenario- Creating a sightseeing tour for Chinese students from London, UK to Paris,
France for summer vacation in August 2018
2.1 Assessing the timescales involved in developing this holiday
In UK, Thompson Holiday is one of the leading tour operator industries. Across the
globe, it serves around 25 million customers. Company lays its significant concern over
rendering its customers exotic and fascinating services to the customers with a motive to gain
their trust, commitment and loyalty towards its brand (Pangaribuan, Manik and Pasaribu, 2015).
To satisfy the needs and requirements of its core tourists, Thomson offers a wide range of
attractive packages. On the basis of assessing various stages, such packages are developed.
Development of sightseeing tour packages in Paris, France is a quite complex process. The
stages include examining the destination, appropriate market research, planning and scheduling
along with forecasting. Examining the designation: At the time of developing a holiday, it is very important for
the company to examine the Paris, France and their various destinations. This is the first
and foremost stage, designed by the tourism industry, this involved in developing a
holiday and also in the entire tour design (Lozano, Arbulú and Rey-Maquieira, 2016).
Examining of the destination may take time of 30 - 40 days. Market research: After the destination is examined, the next stage involves the
investigation of various facilities which are to be offered to the students. Mentioned
company lays its attention on preparing the holiday packages in structured and systematic
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manner. Thomas Cook undertakes an intensive research based on the overall market
segment, with a motive to provide the students with a lucrative and profitable package
(Tricoire, Graf and Gutjahr, 2012). For the purpose of tour, research is conducted for
various types of places for the students that can be offered to them. Such situation,
broadly focuses in acquiring a general overview of all the situation and condition
dominating the existing market. Time frame for completing the research will be around
50 to 60 days. Planning and scheduling: Thomson emphasizes on planning and scheduling the holidays
for France in an appropriate manner and schedule the tour in the best manner. For
planning and scheduling, company conduct a structured set of activities in this stage. It
starts with identifying its suitable target market for sight-seeing which includes Chinese
students to provide them with a fascinating sight seeing between London to Paris. After
identifying that, variety of services are offered to the students like accommodation,
booking of tickets, transportation, breakfast, entertainment, dinner and entry tickets etc.
To get the best services, they need to select the best tour operator among the different
service providers that offer wide range of services (Adams and Mulligan, 2012). Over
contacting various suppliers Thomson lays its considerable concern, they offer a wide
range of impressive service to the customers. Planning and scheduling require the time-
scale of around 60-75 days.
 Forecasting: On the basis of trends going on in France, the different components enable
Thomson to forecast various forces on the ground of the present trends. Forecasting stage
includes estimating the overall cost borne by the tour operators for providing and offering
various services along with the selected places in France. After that, sales projection and
prediction of revenue generation will be estimated (Bernick and Boo, 2013). Thomson
lays its concern over projecting and predicting the sales and revenue generation through
such packages. In this process, time period is of about 40 to 50 days.
2.2 Evaluating the suitability of different methods of contracting for different components of the
Holiday
There are different methods that are developed by the tour operators, in order to book
different aspects of the tour packages. Accommodation, entertainment, food services, etc. are the
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different services that are offered by the Thomson (Swarbrooke and Horner, 2012). The
concerned tour operator agency is highly required to merge and consolidate considerable number
of large suppliers with a motive to attain such services. The services will be arranged by the tour
operator like accommodation, transport, breakfast, dinner and entry tickets to key tourist
attraction. The different methods of contracting which is used by the tour operators industry are: Allocation- This is a type of contract between the intermediaries and the operational
managers of the tour agency. According to the terms and conditions of this contract, it
has been stated that, within the predetermined time frame, the intermediaries and the
suppliers are highly required to closely accomplish the deadlines. Under such contract,
there exist low strictness and the suppliers may abide such process in the flexible manner. Sale only charter- Such contracts are signed between various corporate entities. Such
corporate firms include the tour operator managers, suppliers, intermediaries and
customers. This package is designed for lean season as well as for the niche market.
Compared to the other tour packages, this type of packages are comparatively high. For
highly expensive tour, particular consumer segment are targeted for travel packages
(Page, 2011). The sale only contract is made, keeping in view the need of targeted
customers. As per this contract, the overall level of occupancy is fulfilled around the year
in an effective and significant way. Commitment- Compared to other contracts, that is allocation, sale only contract,
Commitment is characterised to have different and unique features. To render the level of
occupancy such as accommodation, food services, entertainment etc. in the very effective
way, such kind or contracting requires the intermediaries. With the contractual terms and
conditions, the extent of rigidity under such kind of contracting is high and the suppliers
are supposed to get in total compliance (Robinson, and et.al., 2016).
 Fixed only contract- This type of contract is used by the company during the off season,
in order to ensure the utilization of volume based capacity. Arrangements have been
made, by Thomson holiday, through fixed contract in this company is going to depend on
the students' expectation. As per the utilized capacity, pricing decision and the total
capacity utilization decisions are to be made by Thomson holiday. In this, tour operator
enters into a fixed contract of tour package. Apart from that, to develop a high occupancy
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level at the festive and seasonal times, this contract is designed. Such contract involves
the complete procedure of adhering to all the essential clauses in order to optimally
utilizes the offerings by the company and effectively sell it to its target customers. High
volume of discount is offered as number of the people availing the tour packages are high
(Ferratt, Hall and Kanet, 2016).Furthermore, summer vacation is the peak time of
travelling by the students as well as other people and in this season, there are very little
chances of non-utilization of capacity. For this, different packages are designed by the
tour operators. These results in fixed contract and thus, large number of people will come
to get benefit of discounted tour package.
After understand all this contracts it has been analysed that fixed con tract is more
suitable for Thomson Holiday (Thomson holiday. About us, 2016). As this offer high discounts,
pre decided profits to the Chinese students.
2.3 Calculating the selling price of a holiday from given information below.
On the basis of the given scenario, a sightseeing tour is created for Chinese students from
London, UK to Paris, France. Chinese students is planning for summer vacation in August 2018
and making a sightseeing tour package for the Chinese students. The proposed group size is 15
students and the tour last for no more than 5 days. To make their journey a lavish and memorable
one, Thomson provides its customers with premium and standard services with a motive to
satisfy the students. The concerned group of business entity lays its proper concern over
effectively calculating its overall cost.
Table 1: Selling price of tour
Facilities Costing
Hotel 60 euros for a twin room (2 adults sharing) on room-only basis
Supplement 10 euros per person/per night
Transportation The price is £1000 for a 20-seater luxury coach
Attraction Local tour guide who will charge you a flat sum of £200 for the
duration of your stay in Paris
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Pricing structure is done according to the above presented manner for the sightseeing tour
package for the Chinese students. Thomson has arranged transportation, hotels, and guide facility
services. This cover transportation service for £1000, local guide for flat sum of £200.
Table 2: Calculation of selling price for Chinese students for 5 days
Facilities Costing Total costing for 5 days (£)
St Michelle Hotel 60 Euros for a twin room 4800
Supplement for BB 10 Euros per person/per night 750
20 seater luxury coach £1000 1000
Local tour guide £200 200
Total 6750
10% profit margin 675
Total costing 7425
The above mentioned calculations shows that £7425 have to pay for the France tour.
Chinese student have to pay. The supplement for BB per student is 10 Euros, for 15 students it is
£750. The profit margin for Thomson is £625 that is 10% of the total. The total cost for the
students for Italy, France tour is 7425. It can be said that, to provide its customers with
impressive and premium services, Thomson has very effectively managed the funds.
TASK 3
3.1 Evaluating the planning decisions taken for the design of the brochure
Brochure is basically a printed piece of paper, described as a document containing
specific details regarding the information and knowledge of an event. It will help the reader to
understand the benefits of the product and services for him (Wu, 2016). Thomson provides its
customers with all the essential information and knowledge in order to satisfy the needs and
demands of its client. Format of the brochure: It is essential to find the format of the brochure, at an initial
stage of designing a brochure. Important things regarding content, structure, style and
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size of brochure, are included in the format (Guo and et.al., 2016). This will help to
attract the customer. Apart from this selecting the appropriate format will also help
Thomson to save their cost. Paper quality: After deciding the format of the brochures, the next step is to decide the
quality of paper. This will help the company in finding out the suitable quality of the
paper which is required for designing the brochure. According to the target market,
quality of the paper should be selected. If the company is planning to target the high
society people, they will go for selecting the high quality paper (Allahyari, Salari and
Vigo, 2015). On context to the scenario, the brochure for sightseeing tour is designed by
the Thomson in different color. Print specification: In making attractive brochures, printing of the paper plays an
important role. In order to attract the customers, good quality of ink should be used so
that it will not get affected from water and other things. Apart from that, making the
brochure attracted, color of ink is also an important part. Thomas Cook should use
colorful and attracted ink so that they can attract the people. Multiple editions: Thomson will prefer to design multiple editions of the brochure time
to time, rather than making a single edition of brochure (Tricoire, Graf and Gutjahr,
2012). This will help the company in finding out the effective brochures and through this
they can also attract the customer for their tour packages. Editing of graphics: Most of the time, people are attracted because of innovative photos
and graphics. People will be more interested in going there, if the company focuses on
editing of photos and graphics of places. As people prefer to see photos rather than
reading a boring paper.
 Implications of legal and regulatory framework- This is one of the most important
consideration which Thomson is required to take into account before designing its
brochure (Jun-yi, 2010). The company is supposed to strongly adhere to the legal
framework of the country in which it wishes to conduct its tour operators in order to
create authenticity and vulnerability in its tour operations management.
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3.2 Assessing the suitability of alternatives to a traditional printed brochure
In today’s competitive scenario, tour operators are now looking for various alternatives
for target market, in order to that customers wants to have special and unique offerings for tour
packages. To improve the quality of brochure as well as to attract a large number of customers,
the alternative method is used. Traditional brochure can be described as the structure which in
used by the tour operator entities in the form of pamphlets and leaflets in order to advertise their
services and products in an effective and impressive way (Hall and Saarinen, 2010).
Furthermore, traditional brochure are really some important medium for conveying information
to the targeted audience. With an increase in the new technologies, now industries are more
focus to adopt new medians with a motive for effective communicating with the target market. In
recent years, for designing brochure E-brochure has become an efficient method in order to
convey information to the customers. Through online, this information is transmitted to the
customers, hence, this is a cost effective way. Apart from that, in compare to physical brochure,
online designed brochure reaches to wide number of people. Therefore, design of E-brochure is
going to be more beneficial and profitable for Thomson Holiday. To reach the target audience,
this will be cost effective and less time consuming. Using E-brochure renders the company with
various kinds of benefits, some of which includes cost effective product and innovative and
differentiated products (Ferreira Custódio, 2014). Thompson Holidays is suggested to use e-
brochure to reach target audience and to convey about new tour package. On the other hand,
video brochure can only be utilized with available social media platforms such as Facebook, You
Tube and other tools to create promotions. Hence, it is recommended that, to promote the
product ans services in market, Thomson can use E-brochure across the world.
3.3 Evaluating the suitability of different methods of distribution used to sell a holiday
For making a business successful it is very important to sell something unique. To
increase competitiveness and sales, different selling methods are used. Other than this, it will
also help the people in finding the suitable thing for them. Different types of distribution
methods are explained as follows: Direct sell: In this distribution method, by going door-to-door company need to sale there
products and services (Muhanna, 2016). With this, company will be able to make better
specification of their products.
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