Tour Operation Management: Trends, Strategies, and Analysis Report

This report provides a comprehensive analysis of tour operation management, focusing on the current trends and developments within the industry, with a specific focus on the Thomson Company. The report examines various types of tour operators, including domestic, outbound, inbound, and specialist operators, and analyzes the key factors influencing their business, such as technological advancements, airline expansions, and value propositions. The report further delves into the stages involved in creating a holiday package, from market analysis and scheduling to forecasting, contracting, pricing, and brochure design. It assesses the timescales involved in developing a holiday package, evaluates different contracting methods, and calculates the selling price of a holiday. Additionally, the report evaluates the suitability of different distribution methods and strategic decisions made by tour operators. The report uses the case study of Thomson Company to illustrate the practical application of tour operation management principles, including an analysis of their financial performance and market position.

Tour Operation Management

TABLE OF CONTENTS
INTRODUCTION.........................................................................................................................1
Task 1...............................................................................................................................................1
1.1 Analysis the effects of the current and recent trends and developments of the tour
operator’s industry.......................................................................................................................1
Task 2...............................................................................................................................................3
2.1 Assess the timescales involved in developing this holiday...................................................3
2.2 Evaluate the suitability of different methods of contracting for different components for
the holiday and different types of tour operator..........................................................................5
2.3 Calculation of selling price of a holiday from given information.........................................6
Task 3...............................................................................................................................................7
3.1Evaluates the planning decisions taken for the design of the brochure..................................7
3.2 Access the suitability of alternatives to a traditional brochure for different types of tour
operators......................................................................................................................................8
3.3 Suitability of the different methods of distribution used to sell a holiday for different types
of tour operator and recommend the most appropriate for tour package....................................9
TASK 4..........................................................................................................................................10
4.1 Strategic decisions made by different type of tour operators..............................................10
4.2 Tactical decisions that has to be taken in different situations.............................................11
CONCLUSION..............................................................................................................................12
references.......................................................................................................................................13

LIST OF TABLES
Table 1: Time scale for holiday in France.......................................................................................4
Table 1: Calculation of selling price of a holiday............................................................................7

INTRODUCTION
Tour operation management plays a vital role for enhancing tourisms across the world.
It acts as a link between tour and tour components for arranging a holiday package. They are
responsible for whole travel starts from airports till ends of the travel, includes food,
accommodations, services for the tourist (Mehmetoglu and Norman, 2013). It advertise itself
through internet, brochures, or by making contracts with different airlines, other suppliers and
itineraries. The present report focus on analyzing the effects of current and recent trends, stages
involved in creating a tour package, evaluation of suitability of different methods of distribution
used to sell a holiday, strategic decision made by different tour operators. In order to achieve the
objective of the report Thomson Company and Its tourism services have been evaluated. The
headquarters of Thomson UK are in Luton, England. It was founded in 1965, 51 years ago.
Thomson is subsidiary of TUI group, arrange charter and scheduled passenger’s airlines, hotels
and resorts.
TASK 1
1.1 Analysis the effects of the current and recent trends and developments of the tour operator’s
industry
Tour operators of Thomson Company are responsible for arranging, preparing holidays, whether
it can a holiday or historical tour. They generally follow the current trends, popularity,
destinations as per the guild lines of the company and organize the travel with all
accommodations (Xiang and Gretzel, 2010). There are different kinds of operators:-
 Domestic tour operators:- Domestic tour operators organize tours for the resident living
in the same country and also traveling within own country. It could be national park
tours, Alaska tours or many more.
 Outbound tour operators:-Outbound tour operators arrange tour for resident living in
one country and planning to travel in another country (Sivesan, 2012). Recently most
popular destination in Europe, but its fully depends upon the choice of the passenger
where he or she wants to go. Tour operator arrange all the facilities starts till ends
excluding shopping and all.
 Inbound tour operators:-Inbound tour operators arrange travel for nonresident person
traveling to other country. This kind of tours called International tours, where language is
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a Barrier for passenger. In this kind of tour operator arrange airport pickup and delivery,
hire local guide and gives all the related facilities for emergency help.
 Specialist tour operators: - Specialist tour operators are the operators those who are
specialist in arranging tour for the particular destination. Thomson Company working as
a specialist tour operator.
In a recent year there are number of key factors which significantly affects the business
of Thomson Company and Its tourism travel market (Brotherton, 2012).
 Technology growth: - The market of Thomson Company has been improved. With the
use of Internet and Technologies Company’s travel market has been changed a lot and
benefited. Comparison in pricing of different operators, availability of travel product,
services, Reviews about the last travel can help traveler to make mind where to go and
with operator to go (Perch-Nielsen, Sesartic and Stucki, 2010).
 Expansion of airlines: - Availability and choices of airlines has been increased. As
airlines cost has been got down, seats are available so traveler can make opinion.
Connectivity provided by Thomson Company in airlines is fast and cost effective.
 Value proposition: - Brand value of Thomson Company is eye catching. Quality of
services, ideas, reviews of company make passenger's mind satisfy. And passengers
believe in this brand and choose it for travel whenever require.
 Mass market tourism: - Thomson Company working in mass market tourism. In this
kind of Tourism Company avoid to focus on particular destination, and cover whole
market. In this way it is connecting with the maximum no. of people (Assaker, Vinzi. and
O'Connor, 2011).
Thomson holidays: It was founded in 1965, 51 years ago. Thomson is subsidiary of TUI group.
It gave optimistic growth in 2016. TUI has released the statement that 60% of winter booking
has already been taken place with up 4% and even starts booking for next summer.
2015 Review
Core earning £724million Growth of 15.4% from
previous year
Visitors 36.115million 2.1 billion in previous year
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Revenue £125.2bn* £55.2bn* in previous year
value £126.9 billion (9% of GDP) Growth of 8%
market worth £9.2 billion Growth of 11.5% from
previous year
employment 3.1 million people 2.5 million in previous year
TASK 2
2.1 Assess the timescales involved in developing this holiday.
Tourism industries and operators are working rapidly to expand their business and to
meet the maximum number of customers or expanding the customer’s size. For creating a
holiday package company has to go through from several stages. Thomson Company has to
consider all the factors like profit margin, competitive price, discounts as per season, currency
exchange rates, legislation etc. for creating a holiday package (Elodie, Dimanche and Mounet,
2010). According to the given scenario 15 Chinese students have planned from Landon, UK to
Paris, France. Thomson Company has to use different stages for creating an effective and
successful holiday package for all students.
 Market analysis: - Thomson Company has to research about competitor’s price and
products, hotels available and its charges, transportation price etc. Company need to
consider upcoming events in France, Landon, UK and Paris for giving accommodation
and services to students.
 Scheduling: - After a market research, planning and scheduling should be done by
company. Thomson Company should collect the information from college, name of the
students so that reservation can be done, Timing of departure, name of the hotel,
transportation and other detail.
 Forecasting: - After planning and scheduling company should forecast the price. It
would be compare with other tour operators and then relatively provide estimate price of
the package to all students (Sikdar and Vel, 2010).
 Contracting: - In this stage Thomson Company will contact with hotels, transportation
companies and other suppliers and arrange all the facilities where best suits according to
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price and all issues. Company will have to look upon all the legality issues before
contracting with any hotels etc.
 Pricing:- After contracting with hotels and other suppliers company will know the price
of tariffs, lunch, dinner, transport, ticket's price from China to other locations and include
operator benefit also. And then costing has to be finally done.
 Design the schedule (brochures):- In this stage company will have to design the
prospects which has to maintain all the require details like timing of flights, date, cost,
places, duration, name of the hotels etc. All the related information related to this tour.
 Implementation:-Thomson Company should collect money in advance so that he can
reserve the hotels and can do all the booking (Evans, Stonehouse and Campbell, 2012).
Table 2: Time scale for holiday in France
Activities in Days 1 2 3 4 5 6 7 8 9 10
Market analysis
Scheduling
Forecasting
Contracting
Pricing
Design the schedule(brochures)
Implementation
Table 1: Time scale for holiday in France
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2.2 Evaluate the suitability of different methods of contracting for different components for the
holiday and different types of tour operator
There are four types of contacts tour operators and all of them have adopted various
methods and elements at the time of designing of a holiday package (Evans, Stonehouse and
Campbell, 2012). It is important for them to make contract with those people who are already
delivering best travel and tourism services to the customers at low prices. With the help of this, it
becomes easy to minimize the costing of holiday package on per student. Types of tour operators
and their providing services are as follows:
Parameters Outbound
operators
Inbound
operators
Domestic
operators
Specialist
operators
Operational area It includes those
tour operators
which are selling
travel package to
the customers
who wants to visit
other foreign
countries
(Moutinho,
2011).
It refers to those
tour operators
who are handling
inbound overseas
travellers and
offer them
various services
like
transportation,
accommodation,
currency change
services etc
(Perch-Nielsen,
Sesartic and
Stucki, 2010).
These are those
tour operators
who are only
limit their
services to a
particular
geographical
location.
They are
specialist tour
operators which
designs holidays
packages
according the
needs of the
customers like
educational tours,
adventure etc
(Mehmetoglu and
Norman, 2013).
Packages
operated
Regular and ad
hoc
Regular and ad
hoc
Regular and ad
hoc
Only regular
Example of tour
operator
Thomas cook and
Thomson
Evans Evans
Tours company
Haven Holidays Cox and Kings
Products offered Summer sun, Heritage tours, Holiday tours Adventures and
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winter sun, ski,
long haul, short
breaks etc.
self tours etc
(Xiang and
Gretzel, 2010).
according to the
interest and
hobbies of the
customers (Sikdar
and Vel, 2010).
Suitability of different methods of contracting for different components of the holiday and
different types of tour operators:
From the above table, it can be concluded that there are four types of tour operators.
These all are delivering differentiated travel services to the customers on economical prices. In
fixed contracts, the tour operators directly contract with the hotels and reserve the rooms on the
behalf of the end users in advance (Assaker, Vinzi. and O'Connor, 2011). Inbound and outbound
operators can use this type of contracting to deliver the services to the travellers. On the other
hand, in ad hoc contracts, they book the rooms in the hotel whenever customer place the order. It
is generally use by domestic and specialist operators. As per the given scenario, the tour operator
Thomson should follow outbound contracting. With the help of this, the students who are coming
from China can reserve their rooms in the hotel. All facilities can be arranged before they arrive
in effective and efficient manner (Brotherton, 2012). Thomson company also offers holiday
packages outside The UK. The educational tour will include sightseeing, long and short hauls,
cruises, hotel and flight charges.
2.3 Calculation of selling price of a holiday from given information
It is important for tour operators to calculate selling prices of its offer services. With the
help of this, it becomes easy to determine profit margins. At the time of calculation of selling
prices of a holiday, some factors needed to be considered because it affect price of the package
(Sivesan, 2012). Along with this, it is essential to compare other tour operators prices so that it
can be easy to attract the customers with affordable prices. Same reason also apply in peak
seasons when number of the tourist increases at a particular place. By giving special offers like
discounts in low seasons, market share can be maintained by tour operators. According the case,
Thomson company had a partnership with St Michelle Hotel (Elodie, Dimanche and Mounet,
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2010). It has given them the rate of the holiday package in France. The calculation of the selling
price for the Thomson 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
3.1Evaluates the planning decisions taken for the design of the brochure.
Whenever company plans to arrange a holiday package it is very important to design the
brochures. Traveler carries hard copy of brochure with himself. Brochures includes all the
mandatory data, dates, time, destinations, transport etc. Several stages for designing the
brochure:-
 Planning:-Thomson Company should plan and schedule all related activities for
designing brochure. Company should research about adventurous places cost, hotels,
transportation etc. which are related with this holiday. It should be compare with
competitive also for design the effective brochure (Moutinho, 2011).
 Formatting: - Now it is important that formatting of brochure should attract the
passengers. Chinese students are planning to go on adventures holiday so content of
brochure should be adventurous, heading, logo should be attractive. Company should add
graphics related with places and adventure activities. It is very important to design the
brochure according to Chinese students.
 Target market: - It is very important for company to target your customers. Thomson
Company is arranging a holiday package for students, because these are students so cost
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of the package would be different from the normal adventure holidays for regular people.
It should be affordable by the students but for regular customers cost and activities would
be differ from the students (Sivesan, 2012).
 Printing the brochure: - For printing it is very important to use proper font size, color
combinations. Paper of brochure should be clear and all require details should be enter
properly into the brochure. After tally all the details Thomson company can print the
brochure.
 Distribution: - Thomson Company should promote the brochure through various
mediums like newspapers, Internet, T.V, agents etc. It should be reached and displayed as
many places as it can be possible to reach (Elodie, Dimanche and Mounet, 2010).
3.2 Access the suitability of alternatives to a traditional brochure for different types of tour
operators
In the present time, many of the tour operators have rejected the traditional methods to
distribute new brochures. In the earlier days, for distributing the brochures, companies were
appoint some persons (Evans, Stonehouseand Campbell, 2012). They went door to door
distribution, handing over to the people, printing or attaching in the newspapers etc. These ways
are completely inefficient in the present era because it is difficult to attract huge target
customers. There are some alternatives available for the tour operators for distributing brochures.
These are as follows:
Televisions
Tour operators can use televisions to support their holiday packages. With the help of
this, they can share sufficient details of tour services to attract people. Thomson Company has to
adopt this strategy with the aim of promotion travel services and modified them as per the needs
of the end users (Navickas and Malakauskaite, 2015). For example, educational and adventures
tours can be promoted differently by using television. For this, the target market will be school
and college going students and their parents.
Videos
Tour operators can make different videos that shows their tour services in the different
nations. These may be uploaded on YouTube or company website or any other social media. It is
a most effective way to promote the services and attract huge customer. Thomson Company can
make short films on its services in France and post it on website (Perch-Nielsen, Sesartic and
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Stucki, 2010). With the help of this, it becomes easy to deliver them right information about tour
services of the firm.
With the help of above stated methods, it can be simple for Thomson to attract the
customers and increase the sales of services.
3.3 Suitability of the different methods of distribution used to sell a holiday for different types of
tour operator and recommend the most appropriate for tour package
Different methods which can be used by Thomson for distributing and selling holiday
package to tour operator. These include travel agents, social media networking, banners,
newspapers and television, etc. but, for selecting most appropriate methods for promoting
holiday package Thomson needs to focus on benefits of these methods (Karcher, 2013). All these
methods re described as under:
 Social media networking: Thomson can develop a social media page for communicating
information about the holiday package to national and international customers of the
organization. It will help in targeting mass tour operators which will increase their
awareness about the holiday package and its services. These social media networks
include Facebook, Twitter, Instagram, etc. this distribution methods will reduce time and
cost of the organization. Further, company can include pictures of the different
destinations of the holiday package.
 Television: For covering both rural and urban area Thomson needs to broadcast the
information about the tour package on television. It will help in attracting customers in
effective manner. Using the video of the tour destination Thomson can easily
communicate information to all tour operators and customers (Kapiki, 2012).
 Travel agents: It is not as effective method of distribution because each and every
organization wants to communicate information about the tour package using the online
media. But, still Thomson can use travel agents for booking tickets, reservation and
hotels and transportation facilities for tourists. It will helps in saving time and efforts in
effective manner.
 Banners and newspaper: Thomson can publish advertisement in the new paper including
written information about the tour package and all services which are offered by the
organization to tourist. Along with this, Thomson can develop large banner for its tour
package (Bhatia, 2012).
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