Analysis of Tour Operation Management Strategies for Thomson Holiday

This report provides a comprehensive analysis of tour operation management, specifically focusing on the strategies and practices of Thomson Holiday. It begins with an introduction to the travel and tourism industry, highlighting its growth and various sub-sectors. The report then delves into an analysis of the external and internal factors affecting the industry, including technological advancements, economic trends, and niche tourism segments. It also examines the role of market research and PESTLE factors in shaping tour operations. Furthermore, the report includes a detailed case study involving the planning of a 5-day tour for Chinese students from France to Paris, including market research, scheduling, costing, and staffing considerations. Finally, it explores different contract types, such as fixed and sales-only contracts, used by tour operators like Thomson Holiday, and their implications in the context of holiday planning and supplier relationships.

Tour Operation Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 ...............................................................................................................................................3
TASK 2............................................................................................................................................6
2.1 ...............................................................................................................................................6
2.2 ...............................................................................................................................................9
2.3 .............................................................................................................................................10
TASK 3..........................................................................................................................................10
3.1..............................................................................................................................................10
3.2 .............................................................................................................................................13
3.3 .............................................................................................................................................14
TASK 4..........................................................................................................................................15
4.1..............................................................................................................................................15
4.2 .............................................................................................................................................16
CONCLUSION.............................................................................................................................18
REFERENCES..............................................................................................................................19
2

INTRODUCTION
Travel and tourism industry is one of the competitive and complex sectors in today's era.
Tourism industry is growing fast which provide good opportunities for the business. This
industry integrated with various sub industries such as hospitality, business tourism, cultural
tourism, medical tourism and so on. Tour operating industry is one of the largest industry which
provide various jobs in different sectors. This report is based on Thomson holiday which a tour
and travel company which operate their business activities in United Kingdom which is child
company of TUI group. The firm headquarter is located in Luton, which provide a wide range of
products and services to its customers. There product range includes, package holiday, airline
services, cruise holiday, luxury hotels etc.. The purpose of this report is to careful analysis and
evaluate various internal and external factors which can affects tour and tourism sector which
can help to Thomson group to make marketing strategies to attain their long term goals and
objectives. Further, this report also explain about the new trends and development which are
happening in this industry.
TASK 1
1.1
As per the given report of international organizations like WTO, tourism sector has
turned out to be main resource of economy inoculation for various countries. As per the England
Visitors economy statistics, from 2010, tourism sector of the UK is growing with exponential
rate in both employments and number of tourists as well.’ terms (Britain's visitor economy facts,
2016). In 2015, 36.1 million travelers have visited the UK and they have spent £22.1 billion.
These facts have setting records at the international level. These figures symbolize that there is a
5% boost in number of the tourist and 1% (nominal) augment in spending power of travelers as
compared with 2014. The UK has got eight ranked in the UNWTO international tourist arrivals
league in 2015. It has set a position in the world and leave France, USA, Spain, China, Italy,
Turkey and Germany behind in travel and tourism growth. It has also recorded 2.9% boost in
tourism sector in 2015 and in terms of tourism earnings, the nations has got 6th place in the
international tourism earnings league. Along with this, it has also recorded that in 2015, the
percentage of international tourism receipts has 3.4%. In this context, France, the USA and
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Germany have come at next three places in terms of number of travelers which has less than 30%
of the UK tourist in 2015 year. By considering the spending power of tourist, it has found from
the UNWTO statistics that visitors have spent in travel and tourism industry with dissimilar
orders where 27% of all international visitors pay out in the United Kingdom. According to
higher authorities that there are good number of tourists come to the different part of the country
which include London, Scotland, Wales and so on.
Following are the various recent development and trends taken place in travel and tourism
industry.
1. Technological Advancements- Advancements in technological and innovation having a
great impact on the tourism industry specially in e-commerce development. E-commerce
platform are provide opportunities to travel agencies like Thomson holiday to provide
information regarding their holiday package directly to their customers. This is also
helpful for online booking which can cut their mediators and increase their profitability
(Kerzner, 2013).
2. Increase in the spending power- Due to economic development in European countries
specially in United Kingdom increase consumer income level which can leads to increase
in purchasing power, so that it can help to increase more market for tourism sectors in the
country. It can provide a golden opportunities for various companies like Thomson
Holiday.
3. Niche tourism segment- Today there are various tour firms provide customized products
to their customers which can help to increase their market share. Organization like
Thomson Holiday can also find new opportunities in different target groups such as
young generation, couples and business travellers (Witt, Brooke and Buckley, 2013).
4. Customized Holiday Packages- These products are help to generate more revenue for
Thomson Holiday in order to provide products according to the needs of the customers. It
can leads to increase the number of customers and also increase demand of their products
in the market.
5. Change in demographic patterns- Today social norms and trends are change over a
period of time which can help to provide a new opportunities for tour companies. Firms
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like Thomson Holiday can design their products according to these demographic trends
and patterns (Brown, Bessant and Lamming, 2013).
6. Market Research and PESTLE factors- With the help of market research various tour
operators such as Thomson Holidays got to know about the needs and wants of the
customers. And prepare strategies to fulfill the needs and demands of the customers. It is
important to consider various PESTLE factors as no consumer would like to visit a place
with any of poor political, technological etc conditions (Anderson and Marcus, 2015).
7. Role in Economy- The role and significance of tourism sector in the economic
development is growing day by day. It had contributed in the UK economy to about 3.7
% by 2015. Also it had lead to increase in the employment rate in United Kingdom
(Growth rate of the total GDP contribution through the travel and tourism industry in the
United Kingdom, 2015).
8. Focus on conservation- In this category various tour firms like Thomson Holiday plan at
preserving several tourist places for longer period of time. Over here government as well
as on government plays an important function in defensive a variety of tourist
destinations by which earning capacity of local community can be increased.
9. Tourism Marketing- Following tourism promotional tricks in the travel division have
assisted the destinations and tour operatives such as Thomson Holidays in generating
consciousness in the visitors regarding particular tourism service or specific visiting
destination (Page, 2014).
10. Role of government- The role of government in development of tourism sector in United
kingdom also significant. This support is provided in terms of flexible VISA policies,
providing money for tourism destination development as well as relaxing taxation norm
for the tourism activities. The other private and the government organization that deals
with tourism also support local people whose reside near the tourist locations.
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TASK 2
2.1
In order to create a holiday plan for Chinese students from France to Paris where each
group will include 15 students and the tour will not be exceed 5 days, some steps are as Given
below:1. Market research: Here, a deep and complete market research will require on the current
travel and tourism trends in the France and the Paris. It is very well known that the UK is
the most preferable and first choice of the travelers of both international and domestic.
London eye, Buckingham palace, Tower of London, Studly Royal Park and Royal
Botanical Garden etc are some most famous and attractive places in the country. (Evans,
Stonehouse and Campbell, 2012). From the study, it has been found that 29.6 million
people are come to visit the UK because different kind of eye catching tourism
destinations. Along with this, Palace of Versailles, Eiffel tower, Palace of Fontainebleau
and Pont de gard etc are some attractive places of visits which are the center of attraction
for the visitors.2. Planning and scheduling: Under this planning phase, the date of tour will be finalized
with the different activities. The either visit will be only for the Chinese students who are
studying in different colleges of the UK. The following plan will be activated for 4 night
and 5 days in which the scholars will visit the most attractive and famous places of both
the France and the Paris. Along with this, the arrangements related to travel,
accommodation, food etc will also take place in planning and scheduling stage. On the
other hand, Thomson Holiday will also provide few medical services to the students in
case they face health issues during the travelling.3. Costing of tour package: This stage can be considered as an important part of planning
of any kind of tour. For the Chinese student, the total expenses will need to be forecasted
by Thomson Holiday and that will be around £ 10000. It will include different prices such
as food, travelling, accommodation, other transportation modes etc. There will be no
other hidden costs that will be charged by the Chinese students during the tour. At the
time of designing of tour package and its cost, the spending power of the travelers will be
taken into the consideration so that it will be under the budget of them.

4. Administrative staff: A well trained staff will be sent with the student as a guide through
which the students can easily visit the important and well known places of London and
France. They are very friendly and co-operative in nature so that students don’t feel
uncomfortable during the tour. Other than this, all the members of the staff who are going
with the students are trained and experienced so that they will be able to handle the
problems of the students (Nakayama and Bucks, 2012).
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2.2
There are two ways by can be used to reserve the diverse features of the tour package that
prepares by the tour operators. These are sale only contract and fixed contract. In the context of
the preparing holiday plan for the Chinese students, Thomson Holiday has been selected as a tour
operator. This will help in evaluate the aim of the developing the numerous kinds of travel
services and prepare the tourism plan according to it. It will comprise transport, lodging, and
other additional services that will be arranged by the cited tour operator for the travelers by
considering the different aspects. Sale only and fixed contract will be used by Thomson Holiday
at the time of designing of tourism plan (Wu, 2016).
In fixed contract, the prices of agreements are fixed and cannot be modified at any
reason. While sale contract can be defined as it has bargained by buyers when a particular
service consumes by them in high volume. As per the given case study, Thomson Holiday travel
agency has planned to prepare a Summer Holiday plan for the Chinese Students. In this context,
fixed and sales only contract can be considered as major techniques at the time of formulation of
holiday package and create contacts with different kind of suppliers (Swain and Mishra, 2012).
By considering fixed contract, Thomson Holiday tour operator will charge prices from
the Chinese students on the basis of the volume based capacity which lead to increase business
income level. This will assist the cited organization to cover up the off season sale inadequacy.
On the basis of this, total capacity with respect to actual consumption of services by visitors will
be considered. But there is a limitation of fixed contract that is tour operator has to pay complete
amount to all services in case either they completely utilize or not.
By considering the case study where 15 students are travelling together from London to
Paris, fixed contract can be considered by Thomson Holiday. Here, some level of discount can be
get to cited company if it will book the large volume of the services to its suppliers. On the other
hand, only for Sale Contract is used by the tour operators when there is an off season. With the
help of this, tourism organizations can moderate prices of their services. Although, there is a
possibility that cost of travel service is too high and the number of travellers are less (B.
DiPietro, Cao and Partlow, 2013). But the visitors will get the different benefits from them such
as get high quality travel services at low costs etc. Along with this, the travel company will also
able to effectively utilize the existing funds and deliver appropriate services to the customers.
8

2.3
This is Important to find out the cost of vacation package. This will help in determining
the retail value of the holiday package. The activities can be finished via foreseeing the total
amount of profit that can be earned by the tour organization from its customers after selling of
tour package. At the time of calculating the selling price of holiday package, the tour operator
includes all kind of costs such as tax, VAT, accommodation, food, health and safety facilities,
expenditure on entertainment, lodging, food, pre booking, special room reservation, cost of
beverage and food etc (Gass and Harris, 2012). It also helps in setting of competitive pricing for
the tour operative companies in against of their rivals so that sales of services can be increased in
particular time duration. By considering the given case study of Chinese students for which
Thomson Holiday is planning to organize a trip from France to Paris, a cost estimation of holiday
package is as follows:
Activity Cost
Ticket for luxury coach £1,000.00
Stay per night for 5 days 60*9 room = £540
Supplement for BB 12*15*5 = £900
Local Tour guide £250.00
Total £2,690.00
Profit margin (10%) £ 300
Cost £ 2990
TASK 3
3.1
Designing an information sheet is a difficult task for the tour operators because is require
to taking care of various important aspects that make the brochures more effective and able to
deliver the right information to the customers. A booklet should be n such a way that can be able
to gain the attention of the travelers so that they can easily understand the written content in right

manner. The most imperative planning decisions that should be taken into the consideration by
the Thomson Holiday at the time of designing of brochure are as follows:

Format: This is the main step of designing of catalog for the holiday package.
Thomson Holiday is required to examine dissimilar layouts through which
it can easy to deliver the tour package information in the most effective
manner. The format of brochure should be in such a way which can assist
the reader to understand all content and take right decision according to it.
In this context, Thomson Holiday distributing his pamphlet by way of
many initiatives and make sure about their good services which are
providing for the UK colleges for Chinese students (Muñoz-Seca and
Riverola, 2016).
Paper selection: They must emphasis on the quality of the product which makes the
pamphlet attractive for the people. Thomson holiday should need to focus
on the thickness of the paper that gives a professional look to the
pamphlet. A paper which is coated with the glossy paper will give very
expensive look. Customer attract with the color and finishing which gives
more finishing to the brochure. Standard people will judge many thing by
way of the texture of paper and its content so this will helpful to the
company to influence the customer (Schmid, Doerner and Laporte, 2013).
For example, if the information sheet is preparing for the luxuries people
then it should contain high quality of paper because it will assist in put the
good impression of the firm over the customers. On the other hand, texture
of the paper also plays an essential role in getting the attention of the
clients. So, Thomson Holiday should consider the above stated things at
the time of selection of the paper for preparing the brochure regarding
Summer Holiday package.
Paper texture: This can be considered as an important aspect of the planning decision
taken for design the brochure. It includes weight of paper, its thickness,
texture etc. These all affects the advertising of a tour operator company. In
the case of designing of leaflet of Summer Holiday for Chinese students,
Thomson Holiday should look towards the decision of texture of paper.
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For this, company can select the type of paper according to the design of
template so that all information regarding the trip will easily visible and
readable.
Photos and
graphics
In a brochure, there should be some photos or graphics because it makes
the information sheet more attractive as compare normal leaflets. In the
context of the given case scenario, Thomas Holiday should add some
photos at the background of the brochure to make it more attractive. But
organization should avoid adding too much graphics on information sheet
because it will give bad look to leaflet and mix all information with the
photos that cannot be understand by the customers itself.
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3.2
The holiday package tour is a very effective planning for a tour organizer. The brochure
has been considered a good marketing strategies for the company to make effective planning for
their actions (Jaafar and Maideen, 2012). It is a very effecting informing action for the customers
to know about the services of the operator. Not every time it will benefited to the company but at
some time it will give company more revenue by this plan. It will give the business a good
strength with many attractive offers provided to the customers. They can easily assess that which
package will be more cost effective for them. These days various websites are available online
to know more about the company and their special offers for travel and tourism (Mensah and
Dei Mensah, 2013). In a industry there is low profit margin because of heavy expense on the
marketing actions. People who need to know about their packages they can easily make their
choices from the branding of the services. Thomas cook should use various types of brochures
which are very effective to communicate between the units and customer .It is a sales supporting
strategy followed by the organization for innovative development in their sector. There is a
concept of e-brochure which are uses increasingly these days in travel business. Its object is to
promote digital information which is much cheaper than the paper concept (Carmody, 2013).
Advantages:
 It increases the revenue of the organization because of distributing to the customer.
 Industry understanding the culture of customer and by promoting and communication
with them.
 There are millions of templates available of an tour operator which gives consumer to
compere from them.
 It will constantly searching the brave actions for their business for the achievement of
their goals.
Disadvantages:
 Company expand more money for making the template increases the cost-effectiveness
of a company by way of expanding amount on the pamphlet.
 It is not always benefited to the unit because of a huge amount spend on the marketing
and the publication.
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 Pamphlet cannot be circulated in the public properly because of huge population exist in
the market.
 Some times there are organizations involving in the fraud which gives a negative effect
on the tourist.
3.3
By providing the information through brochure it will help to the customer to know about
the current packages providing by the tour operators. Companies provides various types of
package which are related to particular season thorough their marketing campaign. Company
facilitate this services through various methods like travel agent who are helping the company to
promote their plans effectively. Company can use marketing by information media through
technology which are very useful in these days. By communication there are various
advertisements uploaded on the sites through which people knows about the offers and price of
the packages (Hillier and Price, 2013). there are so many potential tourist they booked a holiday
trip through advertisement but must be honest, truthful and accurate. .Wide range of exchanges
has arrived in the methods of distribution in present times. Earlier brochure use is an effective
medium for distributing tour packages among customers. However, in current or recent time,
technology has taken an upper place in the tourism industry. As various advance technological
mediums have been adopted by the tour operators these days. Such as visual, video, E- brochures
etc has evolved with high technology and had lead to increase in the sales of packages. With the
help of E- brochure tour operators such as Thomson Holiday are able to target huge market
(Hillier and Price, 2013). There are various sale techniques can be used to distribute the
information sheet via online medium and this is the profitable medium for the tour operators
such as Thomson Holiday. With the help of this, it will be easy for the organization to target
Chinese students in the large volume via online marketing. Along with this, through digital
medium, the cited tour operator can provide different information about the trip to the target
customers in more appropriate format.
With the aim of increase the sales of the holiday packages of London to Paris, it is
important for the Thomson Holiday to target the particular segment and then select the suitable
method of delivering the information to them. After evaluating all communication medium
including the distribution channel of leaflet, the right and effective mode has to be selected. It
14

may be offline or online and the process of chosen will be based on the aim of preparing holiday
package. This will help Thomson Holiday to minimize the costs of design and supply of E-
brochure as compare to old and traditional methods. So, from the above discussion, it can be said
that in order to enhance the level brand image and sales of tourism services, Thomson Holiday
should use online marketing. It will raise the reach of company in the market and create a high
level of market share.
TASK 4
4.1
There are different tour organizations which are using various strategic decisions in
several kinds of situations. These decisions take by the companies with the aim of operating the
business in the market and attract more and more customers. For example, Thomson Holiday has
developed some strategies in order to draw the attention of target travelers against the design tour
packages. On the other hand, the specialized tour operator such as Cox and Kings has used
numerous decision making strategies regarding operate the tour operational activities.
Strategic decision: Thomson Holiday and Cox ad Kings are famous tour operators in
travel and tourism industry of the UK. Both delivers travel services about to 4000 travel
agencies. In this context, it becomes important to develop some unique strategic decisions so that
it becomes easy to increase the footfall of the customers (Chon and Yu, 2012).
Pricing strategies: Thomas Holiday follows single pricing strategy for its clients while
Cox and Kings is using differential pricing to sell the holiday services to the customers. High low pricing: Under the following method, the price of the services of a tour operator
is much higher as compare to its rivals. In this context, the expense of promotion and
advertisement becomes lower down. But at the time of the offering some special travel
services to target customers, companies start to spend expenses over promotional
activities. In the case of Thomson Holiday, the prices of regular travel services are higher
as compare to promotional products (Ledin and Machin, 2016). Premium pricing: It is very well known that Cox ad Kings is fastest growing travel
organization of the UK. Because of this reason, organization has used premium pricing
for its tour services where they charges prices of product and services which more than
their rivals due to quality product and services.
15

Brand strategy:
Brand strategies can be considered as a long term plan in order to establish a successful
brand in the industry and attain the set goals and objectives. Under this, a company distributes its
services as per the application of the services for the service users. Brand positioning: The aim of Thomson Holiday to adopt brand positioning concept is to
take competitive advantages of the marker opportunities. It enables the consumers to
compare the travel services with other leading tour operators. Along with this, it assists
the organization to raise the footfall of the service users and gain various benefits.
 Co- branding: As Cox and Kings is a specialized tour operator of the UK, it has used co-
branding concept for its products. Here, an organization use this strategy with the aim oif
enhance the brand recognition, gain more customer loyalty and sales of services. Cox and
Kings use this tactic where firm targets its customers with the recognition of the other
travel and tourism brands. For example, presence of Thomas Cook and Cox and Kings in
same building will assist in to get the publicity of both the brands. This is a strategy that
uses by the cited travel company to establish a new and unique brand image against the
other travel brands (Kerzner, 2013).
4.2
There are various operational decisions which are taken by manager of Thomson Holiday
for various situations. The comparison between those tactics is as follows:
Strategies for tactical marketing: Tactical decisions refer to those decisions which are
able to gain the attention of the customers via taking right judgment of marketing of services and
products by a company. This will allow Thomson Holiday to raise the sales of holiday by taking
appropriate decisions like discount in the tour packages, cash back on pre booking etc to the
travelers. It will help in enhance the profit margin and market share (Witt, Brooke and Buckley,
2013).
Strategies regarding cutting cost: This is very significant aspect of Thomson Holiday
because it helps in taking the decision related to minimize the cost of operation. It will facilitate
the organization to reduce the final costing of the travel services. With the help of different cost
reduction strategies, the cited tour operator manages its expense and increase profit margins.
16

Decision for competitors: Thomson Holiday follows Viral marketing strategy to deal
with the high level of competition. Under this, company will take decisions about how to market
the services better as compare to competitors. It will not only publicize the travel services in the
market but also save the cost of cited tour operative. On the other hand, Thomson Holiday has to
be followed adopts Guerrilla marketing in which firm can able promote its services in very
unusual way with minimum marketing expenses.
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CONCLUSION
As per the above mentioned report it has been concluded that travel and tourism industry
is changing dramatically due to various new trends and development in this sectors. These new
trends and development can include innovation, increase in income level, attractive holiday
packages, change in social patterns etc.. In order to make effective tour planning travel and tour
operator are required to focus on market research, organizing, scheduling and budgeting holiday
package effectively. They also required that to make attractive designing of brochure which can
help to attract large number of customers. To make successful holiday package is required
appropriate marketing strategies and plan which can overcome their cost of operation and
increase their revenue and profitability which is the core objective of every business unit.

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