Detailed Analysis of Tour Operation Management for Thomas Cook Report

This report delves into the intricacies of tour operation management, using Thomas Cook as a case study. It begins by analyzing current trends and developments in the tour operator industry, emphasizing the impact of mass tourism and the importance of attractive holiday packages. The report then examines the stages and time scales involved in creating holidays, from market research to execution, including methods of contracting and calculating selling prices. Planning decisions related to brochure design are evaluated, alongside the suitability of alternative distribution methods. Finally, the report explores strategic and tactical decisions made by tour operators, comparing different approaches and providing insights into effective management within the tourism sector. The report also covers Thomas Cook's approach to brochure design and distribution.

Tour Operation Management
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TABLE OF CONTENTS
INTRODUCTION................................................................................................................................4
TASK 1.................................................................................................................................................4
1.1 Analyzing the current and recent trends and developments in the context of tour operator's
industry............................................................................................................................................4
TASK 2.................................................................................................................................................5
2.1 Stages and time scales involved in creating holidays................................................................5
2.2 Evaluation of the suitability of different methods of contracting for different components of
the holiday........................................................................................................................................6
2.3 Calculation of selling price of a holiday from given information.............................................7
TASK 3.................................................................................................................................................8
3.1 Evaluating the planning decisions in relation to designing the selected brochure....................8
3.2 Assessing the suitability alternative of a traditional brochure for the various types of tour......9
3.3 Evaluating the suitability of different methods of distribution which are used to sell the
holiday packages for the different types of tour operator...............................................................9
TASK 4.................................................................................................................................................9
4.1 Strategic decisions made by different types of tour operators...................................................9
4.2 Comparison of tactical decisions that could be taken by a selected tour operators in different
situations........................................................................................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES...................................................................................................................................13
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LIST OF TABLE
Table 1 Time scale for creating holiday from London, UK to Paris, France.......................................6
Table 1: Calculation of selling price of a holiday.................................................................................8
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INTRODUCTION
Tour operation may be served as an important constituent of the tourism industry. In the
present era, tourism is one of the main industries which make vital contribution in the GDP of the
nation. In this, tour operation is highly required because it includes number of industries in it such
as aviation, hospitality, food, entertainment etc (Williams, 2011). Moreover, tour operator considers
number of tour components while designing the effectual holiday packages for the customers. For
the effective management, tour operators make more focus on promotional aspects which the aim to
attract more tourists. This in turn helps in the generation of foreign currency and thereby offers
opportunity to the country to make balance in their payment system (Hammond, 2013). The present
report is based on Thomas Cook which is one of the largest tour operation companies. It offers
attractive tour packages to the visitors at affordable prices. In this context, the present report will
discuss the current trends of tour operation industry. Further, it will also shed light on the varied
types of tour operator who are involved in planning the tour packages. Report will also describe the
different types of strategic and tactical decisions which are made by the tour operators.
TASK 1
1.1 Analyzing the current and recent trends and developments in the context of tour operator's
industry
Travel and tourism is one of the main sectors of UK which is growing with the very high
pace. This sector also offers wide range of employment opportunities to the different industries such
as food, accommodation, transportation etc. In the recent times, tour operation industry places high
level of emphasis on preparing and offering the luxurious tour packages to the customers which
make their holiday experience more memorable. Growth and success of this sector is highly
affected by the level of mass tourism (Solutions to Problems in Tourism, 2016). In UK, there are
several points of attraction which influence both domestic and international people to visit there. It
includes colleges, historical palaces, monuments, beaches etc.
By considering this fact, there are several programs have been developed by UK
government to promote travel and tourism sector. This aspect has placed significant impact on the
tour operation industry in the positive way (Evans, Stonehouse and Campbell, 2012). There is
significant growth takes place in the number of tourists with the passing of time which proves to be
more beneficial for the tour operation industry in terms of high productivity and profitability. For
instance: British people prefer to visit the places of Great Britain rather than other places. Along
with this, people of other countries like India, China prefers to select UK while planning for the
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international tours or holiday plans. This aspect clearly reflects that London is the foremost choice
of visitors while planning for the holidays (Moutinho, 2011).
Besides this, facts and figures shows that during the financial period 2012-13 UK residents
who went to abroad for holidays were raised by 17%. Along with this, 20% inclined take place in
the number of international customers (Perch-Nielsen, Sesartic and Stucki, 2010). It also has been
identified that approximately 8% tourism will rise in UK including both domestic and international
customers. This aspect show that there are several growths and development opportunities will rise
for the companies which are operating in the tour operation industry. In addition to this, tourism will
grow by 4% as compared to the previous years. Moreover, economic condition of UK is good
which may result into increase in the spending power of customers to the large extent (Mehmetoglu
and Norman, 2013). From analysis, it has been found that there will significant rise in the inbound
and outbound people in terms of 4.5% and 2.5%. Hence, by taking into consideration this aspect, it
can be said that tourism will rise in UK with the very high percentage. In this way, several job
opportunities are developed in the field of travel and tourism by 9.6%. Moreover, it combines
number of industries so to offer the quality services to the customers hospitality, aviation etc. will
appoint competent personnel. Further, growth in tourism industry will also result into increase in
GDP to the large extent. Along with this, tourist development may also turn into rise in the standard
of living of local people (Xiang and Gretzel, 2010). Hence, significant growth and development
takes place in the tour operation industry which will offer high level of benefit to the industry itself,
government and local people.
TASK 2
2.1 Stages and time scales involved in creating holidays
From the given case scenario, it has found that Thomas Cook wants to create a summer
holiday 2018 for Chinese students from London to Paris. In this context, management give
instructions to line manager to develop holiday. Regarding this, some stages and scale involve in
creating holiday is as follows:
Market research: Line manager of Thomas Cook has to first conduct a market research which will
cover different areas such as economic conditions of London and Paris, other tour operator services
and prices of travel services of sightseeing visit from UK to France, competitors selling strategies
etc (Sikdar and Vel, 2010). So, at the time of creation of holiday for Chinese students, line manager
should consider all these things.
Planning and scheduling: Here, a plan has to be preparing under which Line manager of Thomas
Cook send notice to colleges of UK especially for Chinese students. After getting the name if
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interested students who really want to go on tour, small groups prepare. Along with this, departure
and reaching time to different locations, sightseen areas need to visited, accommodation facilities
etc will also plan and schedule under the following stage (Assaker, Vinzi. and O'Connor, 2011).
Forecasting: Under this, Line manager of Thomas Cook will forecast the total costing of summer
holiday tour package price. During the forecasting, various activities costing and expenses will
cover.
Contracting: After forecasting, Thomas Cook Line manager will organize a bid of different tour
operators who provide transportation, food, accommodation and other services to customers. By
selecting low cost services, valid contract will made with tour operators (Brotherton, 2012).
Costing holidays: Now, it is a time to find overall actual costing of summer holiday for Chinese
student from London to Paris. To define final price of package, different cost will be considered by
Line manager such as travel, flight booking, hotel, restaurants, taxes, organization profit margin etc.
Creation of brochure: Here, a brochure related to summer holiday 2016 will prepare by Line
manager of Thomas Cook. It will involve several types of information such list of places that will
be visited in 5 days, flights number and timing, hotel and restaurant address etc (Sivesan, 2012).
Execution: This is the implementation phase where Line manager of Thomas Cook will initially
gather the amounts from the Chinese students who are coming on tour. Some amount will give to
tour operators before visit and rest will give after returning from tour (Elodie, Dimanche and
Mounet, 2010).
A time scale related to the preparation of summer holiday for Chinese students from UK to
France is showing in below table.
Table 1 Time scale for creating holiday from London, UK to Paris, France
Activities in Days 1 2 3 4 5 6 7 8 9 10
Market research
Planning and scheduling
Forecasting
Contracting
Costing holidays
Creation of brochure
Execution
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2.2 Evaluation of the suitability of different methods of contracting for different components of the
holiday
There are two methods that is use by different tour operators to mike contracts for different
components of the holiday. They are sales and fixed contract and most widely used by many of the
tour operation organizations. Evaluation of the suitability of two methods of contracting for several
elements of the holiday is as follows:
Fixed Contract: Under this type of contract, tour operation companies ensure that utilization
of volume should be based on capacity so that it can be easy to maximize the collection of revenue
in both on and off season conditions. As per the given case study, Thomas Cook develops a summer
holiday for Chinese students in 2018 (Navickas and Malakauskaite, 2015). For this, it can
established fixed contract with various service providers such as airlines, bus, ship etc. For example,
by making fixed contract with Air Tours, Thomas Cook cam book capacity of airlines and make
payment as per the utilized capacity. In this, agreement, the risk of non utilization of the capacity
increases and the tour operator has to pay only use capacity of airline. So, the package of summer
tour, company has to keep in mind that summer is the peak time for Chinese students to visit
sightseen from UK to France and the changes of non-utilization of capacity of airlines, buses, ships
etc (Perch-Nielsen, Sesartic and Stucki, 2010). Benefits of fixed contract to Chinese students are
they will get high discounts and other supportive facilities during the tour in minimum costs.
Sale only Contract: It is another type of contract in which the services designs by tour
operation companies according to their tour packages. In the case of Thomas Cook, summer holiday
is designed for the niche Chinese students segment because they are not able affords highly
expensive tours (Dickinson, and Lumsdon, 2010). By doing this, they may take interest for new low
pricing travel packages. For instance, tour operators need to pay high amount at the time of booking
services without selecting preparing any kind of tour package. So, to minimize extra costs and
reduce the risk of weak responses for new summer holiday tour package, the following contract
method is good. With the help of sale contract, it becomes easy to minimize the wastage by
avoiding paying for the un-utilized capacity and thereby reducing the risk of loss (Scott and
Lemieux, 2010).
2.3 Calculation of selling price of a holiday from given information
It is essential for tour operator organization to determine selling price of their services. By
doing this, it helps in calculating of profit margins. During identification of selling prices of tour
package, some elements needed to be considered because these may affect the final pricing of
package (Ghimire, 2013). For the same, tour operator also compare their pricing with the other tour
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operation companies to stay remain in competition. Sam condition may be applied in the case of
peak seasons where number of tourist increases at a particular place. By giving special offers such
as discounts in low seasons, it becomes simple to increase the sales of services and raise market
share with the time. According the case, Thomas Cook Company had a contract with St Michelle
Hotel for accommodation during the summer holiday tour. It has given them the rate of the holiday
package in France (Peeters and Dubois ,2010). The calculation of the selling price for the Thomas
Cook Company is as follows:
Table 2: Calculation of selling price of a holiday
Services Cost (In £ ) Total Cost (In £ )
Hotel accommodation (for 2 people) 60 4800 (total 8 rooms)
Supplement for BB (per person) 10 750 (15 people per day)
Transportation 1000
Tour guide in Paris 200
Total cost 6750 (Per head 450)
Profit (10%) 675
Selling price 464 7425
TASK 3
3.1 Evaluating the planning decisions in relation to designing the selected brochure
In the present era, brochure is prepared by the each and every sector with the aim to
influence the large number of customers. It may be served as a tool which offers opportunity to the
business organization to influence the decision making aspect of customers by conveying the
messages to them (Hjalager, 2010). Hence, by circulating brochure through either online or offline
business unit can sell the holiday packages in a prominent manner. Cited case situation presents
that planning and evaluation is one of the most effectual techniques which assist business unit in
designing the highly attractive or suitable brochure. By designing the brochure Thomas Cook can
reach to the target market at low cost. It is the most effectual medium which communicates message
to the target market. Hence, Thomas Cook needs to consider the following aspects while designing
brochure for summer holidays 2018 (Hudsonand Thal, 2013). In this, company will place more
emphasis on highlighting the various aspects from UK to France. Planning in relation to the
designing of brochure at Thomas Cook are enumerated below: Recognizing planning issues: At this stage, there are several issues which have been
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identified by Thomas Cook while designing the brochure. Company has faced issues in
relation to the format, content, printing etc. For instance: According to the case situation,
Thomas Cook is planning to offer adventurous tour package in the year of 2018 which will
begin from UK and end at France. In this, business unit faces difficulty in relation to
deciding the duration of tor package, need, expectations of the customers in terms of both
financial and non-financial (Seetanah, 2011). Format: In this, corporation takes decision in relation to the design and formatting aspect of
brochure. Hence, Thomas Cook needs to consider several aspects in relation to the font size,
style, quality of paper, background etc. In this, company is planning to offer adventurous
tour package to the customers. In this, background must be related with the adventurous
theme. Along with this, business unit also needs to include information regarding the hotel,
restaurants, destinations, airlines and duration of holidays (Surugiu and Surugiu, 2013). Budget and target market: Once format of brochure has been decided thereafter company
makes focus on the selection of target market. Along with this, company also requires
framing budget for designing the brochure. Through this, they are able to prepare brochure
at cost effectual prices (Spenceley, 2012). Determination of print specification: in this, company requires proofreading the content and
needs to make sure that font size and quality of the paper is appropriate. Further, company
also needs to secure the design of leaflet via copyright Act. At this, company makes
assessment that each and every information is mentioned on brochure. Moreover, brochure
is the main aspects which encourages customer to purchase the tour packages (Evans,
Stonehouse and Campbell, 2012).
 Launching brochure: At the last stage, Thomas Cook makes planning in relation to the
launching of brochure. Along with this, business enterprise also needs to select the medium
which proves to be suitable for disseminating the brochure such as television, internet (mail
and social media) and newspaper etc (Moutinho, 2011).
3.2 Assessing the suitability alternative of a traditional brochure for the various types of tour
operator
In the previous time, tour organizations only make use of traditional means such as
templates, newspaper etc. On the other hand, now there are several alternatives of traditional
brochure which are available to the different types of tour operators are as follows:
 Internet: It is the most effectual alternative to the traditional medium. Now, every person
from student to old person having smart phones. (Moutinho, 2011) Thus, through mail
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Thomas Cook can convey messages regarding the tour packages more effectively (Xiang
and Gretzel, 2010). Further, company can also attract students by placing brochure on the
social networking sites via internet. Thus, internet offers opportunity to provide information
about the holiday plans to the target market.
 Further, by making attractive videos about the destinations such as UK, France, restaurants,
hotels etc. Thomas Cook can distribute the brochure more effectively and efficiently. In this,
by uploading videos on the company's website and Facebook, Twitter etc. more customers
can be attracted to the large extent (Sikdar and Vel, 2010).
 Along with this, by placing advertisement on the famous television channels information
can be served by Thomas Cook to its target market. Besides this, by giving aid in the theatre
hall company can provide information about holiday packages to the number of students
(Mehmetoglu and Norman, 2013). Moreover, students prefer to go the cinema hall for the
purpose of entertainment.
Hence, by following all these aspects Thomas Cook can reach to the large number of
students as compared to traditional means.
3.3 Evaluating the suitability of different methods of distribution which are used to sell the holiday
packages for the different types of tour operator
There are numerous factors which supports the suitability of different alternatives of the
methods of distribution are described below: Internet: Low cost is one of the main factors which encourages tour organization to make
use of it. Along with this, now people spend their huge amount of time on the social
networking sites. In this, it also offers opportunity to Thomas Cook to make contact with the
large number of customers. Further, now there is a trend towards the purchasing of services
through the means of internet (Assaker, Vinzi. and O'Connor, 2011). Marriott is one of the
biggest example of it who made 100000 reservations in a single day. Hence, through this
medium Thomas Cook would become able to sell the tour packages in an effectual manner.
 Travel agent: Further, company can sell the packages by taking assistance of the travel
agent. It is another most effectual medium which will assist company in selling the packages
(Evans, Stonehouse and Campbell, 2012). In the present time, there is high level of shift in
the needs and expectation level of customers. Now, customers prefer to contact travel agent
rather than planning themselves (Perch-Nielsen, Sesartic and Stucki, 2010). Moreover, now
customers think that travel agent offers high quality and luxurious tour packages which
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make their holiday experience memorable. For this, company gives commission to the travel
agents. Hence, this method offers high level of benefit to the company at low cost.
TASK 4
4.1 Strategic decisions made by different types of tour operators
Flexibility in the tour operator system in different areas helps the tour operation
organizations to increase profitability of business. At the time of planning of various new tour
operations, company needs to take decisions and strategic plans (Perch-Nielsen, Sesartic and Stucki,
2010). These strategic action plans are such as price efficiency, competitive strategy and selection of
specific consumer segment etc. With the help of this, it becomes easy to take future course of
actions for the venture. Strategic decisions made by several tour operators can be understand by
example of Thomas Cook and Cox & King (Mehmetoglu and Norman, 2013). One is mass tour
operator and second is specialized tour operator. The fundamental strategic planning that will be
undertaken by these organizations is listed below:
Discount pricing strategy
Pricing is considered to be a significant aspect by Thomas Cook. By adopting fixed price
contract with the different travel service providers, organization has able to delivered a high
discount to the customers. With help of discounting pricing strategy, company attracts Chinese
students to its newly design summer holiday 2018 tour package and provide them advantage in
terms of cost (Xiang and Gretzel, 2010).
Segmentation, targeting and positioning
For a tour operator company, selection of right segment, target and position of services in
the selected market is an important task. Thomas Cook uses the following concept at the time of
designing of tour package. For this, Line manager of company selects student segment and target
Chinese students (Sikdar and Vel, 2010). For creating positioning of this new service in the market,
venture chose sightseen areas of UK to France. These all decisions take by Thomas Cook after
analysing competitiveness of company and the desired consumer segment that it target.
Seasonal aspect
The following strategic decision approach use by Cox & King because it is a specialized
tour operator. In the particular seasons, it delivers services to customer with wide range of pricing
and types of sales. For example, in summer season, cited organization select the pricing strategy as
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per the tourism activities in a particular place (Assaker, Vinzi. and O'Connor, 2011). By doing this,
it becomes easy to attract the number of travellers and increase the sales of services.
Competitive pricing strategy
It is important for tour operation organizations to choose those pricing strategy which assists
in taking competitive advantage. With the help of competitive pricing strategy, it becomes easy to
survive in high competition and effectively raise the sales of services (Brotherton, 2012). Thomas
Cook and Cox & King both have used competitive pricing strategy because it is beneficial for the
organizations to attract more and more customers and gain loyalty of them for the long time in high
competitive market.
Creative promotion strategy
This strategy helps tour operators to promote their tour packages in the target market. Under
the following process, the tour operation organizations have to take decision of selection of methods
of promotion, the tool for preparing budget etc. With the help of these decisions, Cox & King
effectively select creative promotion strategy because it provides specialize tour services to the end
users (Sivesan, 2012). Along with this, it helps in increase profitability of the firm by attracting
footfall of more and more customers and raises the number of sales.
4.2 Comparison of tactical decisions that could be taken by a selected tour operators in different
situations
There are various tactical decisions take by the tour operators to handle the day to day
business activities such as designing of services, methods to increase sales etc (Navickas and
Malakauskaite, 2015). These types of decisions are important to ensure smooth business functioning
of the business. Some essential important tactical decisions take by tour operator Thomas Cook
organization for proper functioning of business operations are maintain tie up with several
stakeholders, conciliation with the service providers, organizing accommodation, offering services
to the customers regarding travel package and maintain tie up with several stakeholders etc. These
all are part of creation of value chain for business so that customers get effective services
(Dickinson, and Lumsdon, 2010).
Another tactical decision that is needed to be taken by the tour operator Cox & King is
related to tie up with several service providers such as airlines, buses, hotels etc. (Assaker, Vinzi.
and O'Connor, 2011). For this purpose, it is very significant for the tour operator company to select
some personal and corporate selling tools to raise the number of services and attract more and more
customers. There is a requirement of organizing meetings with the contractors and ensure that the
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