Tour Operation Management: An Analysis of Trailfinders Strategies

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Tour Operation Management

Table of Contents
Introduction..................................................................................................................................................1
P 1.1 Analyse the effects of current and recent trends and developments on the tour operators industry
.................................................................................................................................................................2
Task 2...........................................................................................................................................................3
P 2.1 Assess the stages and timescales involved in developing holidays................................................3
P 2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator............................................................................................5
P 2.3 Calculate the selling price of a holiday from given information....................................................6
Task 3...........................................................................................................................................................8
P 3.1 Evaluate the planning decisions taken for the design of a selected brochure.................................8
P 3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operator
.................................................................................................................................................................9
P 3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for different
types of tour operator.............................................................................................................................10
Task 4.........................................................................................................................................................12
P 4.1 evaluate the strategic decisions made by different types of tour operator....................................12
P 4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations................................................................................................................................................13
Conclusion.................................................................................................................................................15
References..................................................................................................................................................16

LIST OF TABLES
Table 1: Timescale for holiday package designing......................................................................................4
Table 2: Expenditure details........................................................................................................................6

Introduction
For the growth and development of tourism sector, tour operators are the major contributors, and hence,
this task is based on the significance of the various strategies that can be adopted by them. The task of
the tour operators is tough, as they have to make their holiday packages and other provision of
hospitality services according to the dynamic macro environment and customers’ demands. In this task,
a case study of Trailfinders is taken, which is a largest travel organization in the UK and also operates
its business in the Ireland. In this task various trends are discussed that can be adopted by the tour
operators to gain competitive advantage and to offer economical benefits to the countries.
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P 1.1 Analyse the effects of current and recent trends and developments on the tour operators industry
For the development and expansion of the business
of tour operators, following factors and trends are
required to be considered by them:
Ownership:
The tour operators’ business can be expanded by
sharing ownership. For example, tour operators can
contract with the travel agencies to sell their hospitality
services and products. This will help the tour
organisation to meet the demands of the customers at a
global level. Also, this will eliminate the financial
constraints of the organisation (Schuckert et al., 2015).
Market segmentation and competition:
Tour operators can offer various tourism and leisure
products and services to their customers by segmenting
their market area. For example, Trailfinders develop
their itinerary tour plan for middle-income Group while
Thomas Cook develops their holidays for those people
who demand luxury, comfort and premium services. In
addition to this, to beat the competition, technology
plays a vital role in the current scenario of the tourism
industry.
Alternatives of traditional brochures
The operational scale of the tour operators is
increasing at a rapid speed. Replacement of traditional
brochures with the latest methods has helped the
organisation to reach the huge volume of customers. Use
of E-mails, social media, and the internet helped the tour
operators to enhance their scale to those areas where it
does not have opened any of its branch offices (Beatty et
al., 2014).
Integration:
Integration between tour operators can be done in
two ways, i.e., vertical or horizontal. Vertical integration
helps the tour operators to enhance their customer base
and revenue by offering premium quality services. While
horizontal integration helps the organisations to reach to
the wide different market by offering diversified
products and services. Integration between the tour
operators transforms the weakness of financial constraint
into their strength.
Expansion of the cruise market:
Nowadays, there is an increasing trend among
customers of enjoying leisure time on the cruise. This
has resulted in the expansion of the existing market of
the tour operators and makes them competitive in the
market. However, it affects the revenue of other
transportation and accommodation providers in the
tourism sector (Jayawardena et al., 2013).
Responsible tourism:
The contribution of the tour organisations towards
society as well as the environment plays an important
role in creating brand value in the market. Customers
trust those organisations who ensure responsible tourism
through the initiatives towards protection of the
environment, social welfare, education, raising living
standard, etc.
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Task 2
P 2.1 Assess the stages and timescales involved in developing holidays
Introduction
To develop holiday packages for the travellers, there are various phases which are required to be
followed by the tour operators to get the benefit of enhanced customer base and profitability. There are
various suppliers of tourism that facilitates the Trailfinders to sell other services of holiday packages
without actually owning them. This task has also discussed various contracting methods that tour
operators can adopt to ensure that travellers enjoy their holidays and get an outstanding experience of
tourism.
Stages in holiday package development
Market research:
To develop new holiday packages for the customers, Trailfinders is required to understand the vital
attributes of the tourist market as well as of various destinations. Framing holiday packages with
inclusive of various elements is a tough job, and therefore, it is essential for the Trailfinders to analyse
the macro and micro environmental factors of the tourism sector, such as, comparative analysis of
locations, factors that are influenced by environmental, economic, social, and political aspects, etc.
Planning and scheduling:
After conducting the research, Trailfinders needed to do planning for the development of the itinerary of
the tour. The schedule is required to be prepared for the itinerary development that ensures optimal
utilisation of resources. In addition to this, planning can be done by considering the reviews and
opinions of the travellers (Thai and Yuksel, 2017).
Negotiation with suppliers
Tour operators like, Trailfinders are required to negotiate with various tourism suppliers for the tourism
services based on the nature and purpose of tourism. Identification of reliable and honest tourism
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suppliers, like, airlines, lodging, transport operators, air rentals, etc. is essential to ensure higher
satisfaction and comfort to the travellers during their holidays.
Costing:
Trailfinders is needed to determine the overall cost of holiday packages. Such cost the tour package can
be classified into various parts, like, cost of accommodation, airlines, car rentals, etc. Costing of
products and services can be done on the basis of reviewing competitors’ pricing strategy, and market
structure.
Marketing
After the development of holiday packages, Trailfinders is required to approach various marketing
agents to let their customers know about the holiday package offers (Ayazlar, 2014). Moreover, social
media and other online approaches can be utilised by the Trailfinders to market their hospitality services
and products.
Timescale
Table 1: Timescale for holiday package designing
Stage or activity Timescale from origin
Market analysis 8 days
Planning and scheduling 6 days
Forecasting 3 days
Costing 2 days
Contracting 8 days
Brochure design 2 days
Marketing 15 days
Monitoring and review Till the product exist in the
market.
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P 2.2 Evaluate the suitability of different methods of contracting for different components of the holiday
and different types of tour operator
Trailfinders is required to enter into a contract with various suppliers in the tourism industry that offer
their services to the travellers of the organisation. For example, Trailfinders is required to deal with
various airlines, transportation operators, accommodation providers, etc. to develop its all-inclusive
holiday packages. Some of the suitable methods of contracting are summarised below:
Ad hoc:
Contracts on the basis of ad hoc basis can be entered by the Trailfinders with the tourism suppliers to
ensure that their customers get all the hospitality services during a particular journey. This helps the
Trailfinders to reduce the uncertainty of the availability of services during travel.
Time series charters:
Trailfinders can contract with the suppliers to use their products and services for a particular period. To
avail such services, the organisation is required to pay some fee or charges. For example, Trailfinders
can take cars on rent to provide transportation services to the travellers (Page, 2014).
Ad-hoc charter:
When the travellers book their holiday packages urgently, then Trailfinders is required to ensure
availability of all the component services of the itinerary package. Contracts based on Ad-hoc Charter
helps the Trailfinders to book airline seats on an urgent basis for which a larger amount is required to be
paid by the organisation (Xu, 2016).
Split charters:
If Trailfinders offer transportation services to their travellers, then they have to contract with the
transportation providers. However, if the route of destination is long and fragmented into parts, then
Trailfinders have to arrange multiple modes of transportation by approaching different transportation
suppliers.
Allocation:
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Trailfinders, for example, can enter into allocation contract with the accommodation providers in
booking rooms for their customers. When the customers visit the accommodation provider’s place, then
Trailfinders is required to pay for such services, however, if the services are not availed by the
customers then, it can be negotiated. This helps the Trailfinders as well as the accommodation providers
to gain the advantage of shared services (Guo et al., 2013).
P 2.3 Calculate the selling price of a holiday from given information
For the calculation of selling price of educational tour holiday package through luxury coach from
London, UK to Brussels, and Brugge, Belgium, Trailfinders is required to contracting with various
suppliers of tourism services and products.
According to the assignment, there are fifty students in a Group and they are going to a travel for
educational purpose for 5 nights in Brugge. There are additional persons in the tour which includes, two
drivers, a tour guide and the tour manager.
It is given that 1£ equals to €1.14, and therefore, conversion rate is £0.88
The room is shared by two students in Grand Casselbergh in Brugge with a breakfast at €89.
Conversion into pound: 89 Euros x 25 rooms x 0.88£ x 5 nights
=£ 9790
There is a fixed cost given for the luxury coach: £6949
The salary of local tour guide = €896 salary x 0.88 conversion rate = £788.5
The cost of visitor’s attraction = €45.60 per student x 0.88 conversion rate x 50 students = £2006.4
Therefore, according to the above data, the final cost of the tour package will be:
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Table 2: Expenditure details
Expenditure Type Cost (£)
Local tourist guide £788.5
Transportation facility £6949
Hotel rooms £ 9790
charges for visitor attraction £2006.4
Sum £19,533.9
Profit mark up (28% of sum) £5469.5
Overall price of the holiday
package
£25,003.4
Thus, the total cost is £25,003.4 is the total cost for the tour package and the individual student has to
pay = 25,003.4/50 = £500.06
Conclusion
The above task has discussed various approaches to enter into contracts with the suppliers of tourism.
Trailfinders can adopt any suitable method or their combination to make sure that its customers get all
the benefits of tourism in one package. In addition to this, according to the given information in the
assignment, selling price of a specific holiday packages is calculated in this task.
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Task 3
P 3.1 Evaluate the planning decisions taken for the design of a selected brochure
Introduction
To market the hospitality products and services, an important element is a brochure. The quality content
and attractive design of the brochure will attract more customers towards the holiday package of
Trailfinders. This task has provided that the role of brochure is important to sell the holiday packages, as
customers attract to those brochure that are attractive, colourful, creative, and offers reliable
information.
Executive Summary
This task is mainly relates to the selection of a suitable brochure so that tour operators can beat the
competition in the market. Various factors like, structure, quality, content, paper size, etc. of the
brochures plays the key role in attracting customers in the tourism industry. In addition to this, tour
operators an also opt to have some other advanced methods for advertisement instead of using
brochures, for example, internet, social media, etc. Various distribution channels are available to the
Trailfinders that can be chosen according on the basis of various factors.
Following factors are required to be considered for deciding designing of the brochure:
Structure:
Nowadays, old pattern brochures do not attract customers, as creative design and innovative structure of
brochure attracts the eyes of customers. Therefore, Trailfinders is required to use correct images, at the
right position, with modern patterns to lure the customers towards the offers of holiday packages of the
organisation.
Content:
The content of the brochure created by the Trailfinders must be qualitative, clear and attractive.
Ambiguous and misleading content will reduce the trust and faith of the customers on the services of
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Trailfinders. The content of the brochure can be effectively created with innovative ideas and images
can be used to attract the customers’ attention (Brito and Pratas, 2015).
Target market and budget:
The brochure of the holiday package is required to be reated as per the target audience of the
Trailfinders. For example, if the target market of the organisation is middle-income Group, then
brochure must provide affordable holiday packages while for the luxurious hospitality services, high
price packages are required to be offered through brochures.
Paper quality and size:
The quality of paper also plays a significant role in attracting customers. The quality of the paper and
correct size is required to be taken by the Trailfinders to ensure that their brand value enhanced in the
market. The quality of the paper can also be increased as per the higher price holiday packages
(PROBORINI, 2013).
P 3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operator
The traditional approach of creating brochure is getting outdated and therefore, replaced with the
modern methods to grab a large number of customers. Hence, following are some of the alternatives to
traditional brochures of Trailfinders:
Social media:
Nowadays, social media is used by most of the people, and therefore a great medium for the Trailfinders
to attract the customers at the global level. Advertisement of holiday packages can be made by the
creation of account of Trailfinders on social media and posting of an advertisement on it. This is
effective to communicate the vital information about the organisation to the large community. Also, the
presence of Trailfinders on social media is essential to create a good brand image in the market.
Internet:
The marketing of various hospitality services can be done with the help of the internet. This helps the
Trailfinders to reach to the wide number of customers across the world without physically present there.
The extensive use of the internet is an excellent medium for the Trailfinders to create its brand value in
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