Travel and Tourism Business Toolkit: A Comprehensive Report

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THE TRAVEL AND TOURISM BUSINESS TOOLKIT

Executive summary
Tours and travel sector is growing as an emerging industry and thus it needs more attention and
improvement. There are certain principles that a tour and travel company should follow to make
revenue management which is an essential part of the travel system. This assignment is divided
into three parts which gradually discuss Sales, Budget and Revenue Management in the first
part, HR Life Cycle and Human Resource Strategy in the second part and Legislation and
Ethics in Travel and Tourism in the third part in the backdrop of Topdeck Travel.
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Table of Contents
Introduction....................................................................................................................................4
Part 1: Sales, Budget and Revenue Management........................................................................4
LO1 Key principles of revenue management for the travel and tourism industry..........................4
Rationale and principles of revenue management for the travel and tourism industry (P1)..........5
Apply the revenue management tools in your travel and tourism organisation to generate and
maximise profit (P2).......................................................................................................................6
Analyse the impact of differentiated pricing strategies on revenue management in a specific
sector of the travel and tourism industry (M1, D1).........................................................................7
LO4 Management of budgets and maintenance of statistical and financial records.....................8
Discussion of different types of financial statements and reporting mechanism for organisation
within the travel and tourism industry using examples (P7, M4)...................................................8
Explain the importance and value of budgets for controlling business performance and
identifying variances (P8, D4)........................................................................................................9
Part 2: HR Life Cycle and Human Resource Strategy.................................................................10
LO2 Assessment of how Human Resources life cycle within the context of an HR strategy (P3,
M2)...............................................................................................................................................10
Develop a performance management plan to resolve negative behaviour and to overcome
issues of staff retention (P4)........................................................................................................12
Judgment and recommendations on how HR processes and documents can be improved for
effective talent planning throughout the HR life cycle (D2)..........................................................13
Part 3: Legislation and Ethics in Travel and Tourism..................................................................15
LO3 Illustration of the potential impact of the legal and ethical considerations on a travel and
tourism business..........................................................................................................................15
Explore specific legislation that organisations in the travel and tourism industry have to adhere
to (P5)..........................................................................................................................................15
Illustrate how the company, employment and contract law has a potential impact on business
decision-making in the travel and tourism industry (P6)..............................................................16
Examination of the potential implications of regulations, legislation, ethical principles and
standards on decision-making in the travel and tourism industry (M3, D3).................................17
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Conclusion...................................................................................................................................18
References..................................................................................................................................19
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Introduction
The term revenue management is correlated with the management of cash for a company by
predicting customers demand so that the company officials can optimize their inventory and
offer so that different price availability comes up for the customers and finally they take interest
to buy the product or service. This concept does not increase during high period demand, but
helps to stimulate demand in low periods also to avoid conflict regarding pricing. It is a long time
strategy that takes all revenue related issues into consideration, so that it can sell services at
low rates during high demand period also (Anderson and Xie, 2010). The present work is done
on Topdeck travels to know about their sales, budget and revenue management system.
Part 1: Sales, Budget and Revenue Management
LO1 Key principles of revenue management for the travel and tourism industry
Background of the company
Topdeck Travel is a UK based tour operating service organisation established in 1973 and
offers 330 different tours and travels in 65 countries of Asia, Africa, North America, Australia
and New Zealand, Middle East and Europe. It provides different destination tourism to make the
customers interested in their travel schemes. They also provide customized tour and offer hotel
trip for those who need a break to relax, explorer trip designed for adventurous people, social
trips such as, hostel plus strip and camping trips for a group of people. They also serve skiing
and sailing experience for interested people. Apart from this they also offer festival destination
travel such as music festival, New Year's Eve parties etc as per the choice of the customer.
They generally make travel plans for the age group of 18-39 years (Topdeck Travel. 2019).
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Rationale and principles of revenue management for the travel and tourism industry (P1)
Revenue management in the tourism industry is associated with the hotel business as hotels do
offer different prices at different times. They room rent fluctuates as per the season and time of
the year (Denizci Guillet and Shi, 2019). Therefore tours and travel companies associates with
them regarding their guests’ stay at those hotels at an affordable price.
There are two different pathways to do revenue management, called duration control and
demand based rates. A hotel has to do both as per the requirement of time and preference of
customers (Antonio et al., 2019). There are many things that a hotel owner has to think before it
announces the different pricing for its customers. Also the, Travel operators who are tying with
them have to go through the pricing policies in detail to avoid any conflict, especially during the
time of service. There are certain principles that should be followed in this regard as stated
below:
Capacity planning:
As per the Duration control and Demand-based rates policy followed by the hotel industry,
pricing of rooms get higher when demand of long stay appears during any special season.
Therefore guests who can afford that price can only avail that room. This also creates an effect
that in this season, many of the rooms remain empty. In low season, however, the price of the
hotel goes down. This also attracts the tourists to enjoy the hotel services. This time the hotel
rooms get full bringing a full income (Ivanov and Ayas, 2017). Therefore, the hotelier should
plan their capacity of the hotel room so that they can accommodate maximum number of rooms
for the travelers. Topdeck before tying with any hotel ensures that it can accommodate its
guests at any time of the year to retain its good brand image and services.
Forecasting of demand:
It is easy to predict the flow of the customers based on the trend of past years and demand of
the rooms. It also based on seasons, such as at the time of vacation, weekends, and at the time
of any special festivities that makes the impact. Therefore proper planning can make the good
effort to allot rooms for the separate customers and for the customers that come from any travel
tie up (Filimonau and Delysia, 2019). Topdeck keeps these things in mind and they book the
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hotel rooms’ way in advance to give their customers secure rooms even at the time of high
demands.
Discount allocation:
Offering discounts at the time of low season makes many customers willing to take the services
and make a small escape from the busy life. This is a very interesting strategy and so the
hoteliers offer special discount or any free service to make the customers attracted toward it.
Differentiation method:
Hoteliers understand the difference between the business travellers and leisure vacationers.
Business travellers make a travel plan for a very short time, whereas leisure vacationers occupy
the rooms as per their travel plan. So this makes the room allocation plan easy for the Revenue
management officers of Topdeck. Generally, the business travellers choose the hotel on
weekdays whereas the leisure vacationers choose weekends for their stay.
Price changing:
The price can be changed within an hour as per the demand. The room rents for the weekends
are generally higher. Also, the location of the hotel plays a pivotal role in the pricing of the hotel.
Any hotel situated at the prime location, or offering a best view of nature charges higher than
the other. Topdeck chooses both types of hotels keeping the demand of the customers that may
depend on their economic structure.
Apply the revenue management tools in your travel and tourism organisation to generate
and maximise profit (P2)
To maximise the profit margin, the management of Topdeck should understand the importance
of different revenue management tools so that they can apply them in a proper way. The
application of these tools can be done as following:
(1) Market segmentation: Hoteliers classify the customers as both literate as well as illiterate
consumers. This is done to mix the both of them and offer them prices and services to bring
uninterrupted revenue to the company.
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(2) Inventory pooling: This is associated with the supply management as the guests who are
staying at any point of time needs different services such as food, toiletries, room services etc.
which the service provider has to give him. Therefore a close watch on inventory and fast filling
of it is needed to maintain a good service system (Buhalis and Sinarta, 2019).
(3) Demand forecasting and supply forecasting: This is an important tool as the right forecasting
brings success but a wrong prediction can result in inventory loss. It enables the manager to
predict the future possible case of guest’s next visit and duration. The manager also has to take
in consideration about the walk in demand of the hotel room that may come up at any point of
time (Josephi et al., 2016).
(4) Overbooking’s control: Overbooking control is done by selling more reservations above the
total capacity. But this can be done when there is a sure chance of cancellation. Otherwise it
can bring defame towards the company. This actually maximizes the profit level but requires
high confidence and experience to forecast about the cancellations.
(5) Performance measurement: To check that the proposed model offered by the management
team is working efficiently and to pool the real data this performance management should be
done by the Topdeck Travels. The check in and checkout data gives a reflection of the stay
history and helps to enable foresight about this in future (Abrate and Viglia, 2016). This will give
a good statistical data on number of empty rooms, over sales, turndowns, closing rate, average
daily rate, and charge per available room and profit margin per available room.
Analyse the impact of differentiated pricing strategies on revenue management in a
specific sector of the travel and tourism industry (M1, D1)
Differential Pricing Strategy enables to make special offers for special customers. It is good to
make maximize profit by allowing the company to adjust pricing differently for different
situations. It can vary from giving particular discounts to loyal and frequent customers to
announcing special offers. This can be done by giving discounts for frequent customers or
senior citizens, or give reduced price for ordering a bulk. New customers can be offered with
special services, so that they choose the same hotel for their next stay. It helps to expand the
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customer base and makes the offers attractive than others. It increases the overall profit for the
company.
LO4 Management of budgets and maintenance of statistical and financial records
Discussion of different types of financial statements and reporting mechanism for
organisation within the travel and tourism industry using examples (P7, M4)
There are basically three types of reports that Topdeck Travels maintain for its business
matters. They are:
Financial Reporting: This is often termed as financial statement and deals with the cash flow
statements of the organisation. It is associated with the sources and amount of cash that comes
into the company and is very different from sales cycle (Martínez‐Ferrero et al., 2015). It also
shows the amount of cash that is going out of the company. Income statement shows the profit
and loss of the company based on sales report. This is important to see that the company is
making a profit or not. Balance sheet considers only assets and liabilities of the company. This
helps Topdeck to identify the quickly available cash or due bills to pay for the future.
Operational Reporting: The present operational efficiency could be shown with the help of this
type of reporting. This uses real time information to focus on recent data. In case of failure of
real time information, granular reporting is done which is a lengthy process to make deep
analysis (Maniora, 2017). Customized reporting is also done with the help of IT for getting a
different view of the data.
Business Intelligence (BI) Reporting: This kind of report enables Topdeck management to
have a broader perspective as it is the combination of data from many sources. It includes CRM
software, spreadsheets, web apps etc to make a data warehouse. These information’s help to
make measurements, create transparency and create dashboard so that everyone can have
access.
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Explain the importance and value of budgets for controlling business performance and
identifying variances (P8, D4)
In the case of any agency, it is important to make a budget to guide the business in a right way
to make the profit countable. A well laid budget plan gives right direction to handle any
upcoming challenge and identify the possible expenditure, available cash in hand etc. This is
helpful in the following regard:
Planning: Budget builds a framework, so that the past records can be used for future strategy.
It gives the lists of assets and liabilities to think carefully to get the possible idea about expenses
(Akter et al., 2016). Therefore it becomes easier to set goals and priorities and allows making
new strategies. It clarifies that how much cash is needed for future operations.
Evaluation: Proper budget plan helps to evaluate the organisational performance. Budgeting
helps to track the actual revenue allotted and expenses made to compare the budget in a right
way. This helps the business to stick with the plan by identifying the problems and opportunities.
Financing: Good budget shows the potential investors and good business plan that can bring
success with evidence. Negative influences thus could be cut off from the business to make the
financing strong.
Staffing: Any business needs a group of staff to make the process going. But this do requires
budget available for their pay-check and other facilities. Hiring more than the requirement can
cause a slide in budget, and making optimum use of the available manpower can be done easily
with the help of a budget (Patiar and Wang, 2016).
There are some software tools that can help in this regard to make the budget for Topdeck and
this will help the company to grow its business and finance related things.
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Part 2: HR Life Cycle and Human Resource Strategy
LO2 Assessment of how Human Resources life cycle within the context of an HR strategy
(P3, M2)
Stages of the Human Resource life cycle and their importance for retaining and
developing talent
Human resource life cycle simply depicts the different phases that an employee experiences
during his/her stay in the company. Every stage of it has different challenges, opportunities,
limitations and advantages. As an HR consultant to Topdeck travels, these stages should be
identified and performed carefully. These stages are:
 Recruitment: A recruitment plan is done at first to hire potential persons for a company
based on experience and skill set and therefore after scrutinizing, a pay package is
decided for a specific job (Hecklau et al., 2016). Then the interview process is done
which may consists of written test, round of interviews etc. An HR consultant takes a
lead role regarding recruitment and actively sorts out the application, goes through them,
arranges the interview schedules.
 Education: After recruitment, the newly hired employees should be trained about the
values, objectives of Topdeck, so that they can understand their duties. Assistance of co
workers and different session about the working procedure can make them comfortable
and confident (Papathanassis, 2017). The HR consultant makes training session so that
a new employee first starts to understand the company and grows interest. So that the
person becomes beneficial to the company by generating more revenue.
 Motivation: It is believed that within the first three month of employment, managers and
leaders understand the potential of the worker, so that they understand that the person
is motivated or not (Hashemkhani Zolfani et al., 2015). Deficiency of motivation can
create employee turnover and presence of it make the management decides about pay
raises, incentives, promotions etc. A potential employee is made skilled through this
approach. It is the duty of an HR assistant to talk with a new employee and guide him
about different aspects or how to handle different situations. It is also a responsibility to
identify the special talents of the employee to escalate it for receiving more benefits out
of it.
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 Evaluation: In this stage a supervisor measures the performance of an employee to
decide that the person is correct or not. They give several tasks to the employee who
challenges the potential of the employee and make them more skilled. Th eHR assistant
evaluates a new employee by various means such as giving new jobs to perform and
check that how he behaves and starts to think to do it. This makes a good sense to
identify his inner skills and potential.
 Celebration: If the potential of the employee is good, then the person receives appraisal
which may come as salary raise, extra payment, holiday recognition by promotion etc.
this is indeed a happy phase of the employee (Zhang et al., 2017). If an employee is
good enough, then it is the duty of an HR assistant to congratulate him by giving good
benefits so that the person find a reason to celebrate.
This cycle ends with retirement or if the employee decides to join another company.
To retain the skilled employees the HR assistant should do the following:
 The company culture should be good and assisting in nature so that the employee finds
it comfortable to work
 Good skilled employees with positive mindset should be hired so that they can make the
business environment promising.
 Importance on proper training should be given to make the newcomer understand all the
business related process clearly.
 The payment structure should be lucrative, so that the employee finds it suitable to meet
his demands.
 In time of need helpful guidance should be given to overcome any challenge and make
the work environment friendly.
 Recognition of talent should be done as this gives satisfaction
 Unique perks should be given to employees to make the work rewarding in nature.
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