HND in Hospitality Management: Tour Operations Management Report

This report examines tour operations management, specifically focusing on the stages and timescales involved in developing holidays, as practiced by LCB tour operators. It details the importance of market research in understanding customer demand and competitor analysis, followed by the planning and scheduling of destinations, hotels, and dates. The report also covers the costing of holidays, including fixed and variable costs. Furthermore, it explores different contracting methods used by tour operators, such as allocation contracts, and their negotiation processes. Finally, the report includes a calculation of the selling price of a holiday, considering fixed costs, variable costs, the number of customers, and profit margins. The references provided support the strategies and methods discussed in the report.

Tour Operations Management

2.1 Stages and timescales in developing holiday
LCB tour operators follow different stages and timescales for developing the holidays.
Stages and timescales are involved like:
 Market research: LCB follow stage that is market research for gathering information
or data relating to customer demand, competitors product, pricing strategies, advance
technology, recent trends etc. With the help of it, tour operators are easily planning
and developing holidays. This stage helps to know about all information about
product and services of travel sector.
 Planning and scheduling: LCB adopt stage that is planning and scheduling of
destination, hotels, capacity and dates of holidays. Tour operators make sure that
effective planning of the most popular destination, hotels. They also make sure that
select particular date and time, so that number of customers coming in trips.
 Costing of holidays: LCB make sure that calculate all cost which is occurred in
planning of holidays. They determine hotel cost, travel cost and any other services
cost for planning holiday trips. With the help of it, tour operators easily developing
holidays.

2.2 Different methods of contracting for holiday development
 There are different methods of contracting that are utilized by tour operators such as fixed contract, allocation
and ad-hoc. Tour operators are contracting with hotels, different tourists destinations etc.
 Allocation contract: It is also known as allotment that are used in tourism business. It is contract utilize to
assign certain cube of pre-negotiate carrier seats or hotel rooms that have been bought out and held by tour
operators high purchasing force such as tour operators, hotel merger and more rarely by retail travel agents.
 LCB tour operator negotiating allocation between hotel chain, airline company, between other travel
operators like tour operators and retail travel broker. The result of allocation contract is estimated that
amount of contracted of particular rooms and seats.
 Volume of sales to be accomplished by tour operators during the negotiation. Tour operators book definite
number of hotel rooms and carriers seats for right to utilize them by given date. Through this contract, tour
operators acquire discount that mainly calculate on firm size and exercised bargaining power.

2.3 Calculate selling price of holiday
 Tour operators calculate selling price of holiday that includes fixed cost, variable cost,
number of customers and profit margin. If fixed cost of product is 50000 and variable
cost is 70000, the total cost of product is 1,20,000.
 Tour operators decide number of customer is 1000 and 10% of margin. So that, the
selling price of product is 132.

REFERENCES
Li, B. and et.al., 2016. Pricing strategy and coordination in a dual channel supply chain with a
risk-averse retailer. International Journal of Production Economics 178. pp.154-168.
Yang, D. and et.al., 2018. Optimal reservation pricing strategy for a fashion supply chain with
forecast update and asymmetric cost information. International Journal of Production Researc.
56(5). pp.1960-1981.
Law, R. and et.al., 2015. Distribution channel in hospitality and tourism: Revisiting
disintermediation from the perspectives of hotels and travel agencies. International Journal of
Contemporary Hospitality Management. 27(3). pp.431-452.

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