Tour Operation Management: Analysing Trends and Decision Making

This report provides a comprehensive analysis of tour operation management, focusing on key aspects such as current trends, holiday development stages, contracting methods, brochure design, distribution strategies, and strategic and tactical decision-making. It examines the effects of recent trends on the tour operator's industry, assesses the stages and timescales involved in developing holidays, and evaluates the suitability of different contracting methods for various components. The report also calculates the selling price of a holiday package and evaluates the planning decisions for brochure design, recommending alternatives for different tour operators. Furthermore, it assesses distribution methods and evaluates strategic and tactical decisions made by different types of tour operators, using Trailfinders as a case study to illustrate practical applications and considerations within the travel industry. Desklib is a platform where students can find past papers and solved assignments to aid their studies.

Tour Operation Management

TABLE OF CONTENTS
Introduction......................................................................................................................................1
LO1..................................................................................................................................................2
1.1 Analyse the effects of current and recent trends and developments on the tour operator’s. .2
industry........................................................................................................................................2
LO2..................................................................................................................................................3
2.1 Assess the stages and timescales involved in developing holidays.......................................3
2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator [M1].......................................................................6
2.3 Calculate the selling price of a holiday from given information below................................8
LO3..................................................................................................................................................9
3.1 Evaluate the planning decisions taken for the design selected brochure..........................9
3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour
operators and recommend the most appropriate for your tour package....................................11
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of tour operator and recommend the most appropriate for your tour package.. 13
M2 select /design and apply appropriate methods/techniques..................................................15
LO4................................................................................................................................................16
4.1 Evaluate the strategic decisions made by different types of tour operator [M3].................16
4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations....................................................................................................................................18
Conclusion.....................................................................................................................................20
References......................................................................................................................................21

LIST OF FIGURE
Figure 1: Steps involved in development of holidays.....................................................................3
Figure 2: Gantt chart........................................................................................................................5
Figure 3: Methods of Contracting....................................................................................................6
Figure 4: Brochure Designing.........................................................................................................9
Figure 5: Alternatives to traditional methods................................................................................11
Figure 6: Online Boucher of Trailfinders......................................................................................12
Figure 7: Distribution methods used by tour operators.................................................................13
Figure 8: Tactical Decisions..........................................................................................................18

LIST OF TABLE
Table 1: Strategic Decisions made by tour operator......................................................................16
Table 2: Tactical Decisions...........................................................................................................18

Introduction
Tour operation Management can be defined as the study of managing and controlling of all the
activities involved in designing of holiday package. The report will focus on analysing the
current trend in tour operators industry. It will focus on assessing the stages in developing
holidays, evaluation of contracting methods as well as calculation of selling price of package.
The report will review the brochures and methods of distribution for selling of holidays. Last
task of the report will help in understanding the strategic and tactical decisions made by tour
operators. It will explain all the tasks by considering Trailfinders which is a travel organization
in UK and operates its travel centres in UK and Ireland.

LO1
1.1 Analyse the effects of current and recent trends and developments on the tour operator’s
industry.Effects of current and recent trends and developments on the tour operator’s industry
Trailfinders owns 3 travel centres in Ireland and 29 in
UK and is one of the popular travel organizations. It
provides customised travel services to its customers
majorly in Australia, South America, New Zealand,
Africa and Asia. Being the leading organization with
high level of customer satisfaction services, still it is
highly influenced by the current trends which are
explained as:
Technological Adoption: Travel and tourism is
growing at a rapid rate with the adoption of
technology. Utilisation of internet facilitates
customers to book travel packages online by
comparing several available options for prices
and facilities included in the package. Online
booking services seek the attention of customers
and also facilitate them to make cancellation of
their bookings in case of emergency.
Demands of customers: Tour operators have high
focus on providing customer satisfaction and therefore,
it provides customised products and services as per the
demand of tourists. High trend of flexibility among
tour operators is observed so that they can serve
customers in the most efficient manner. They offer tour
packages with wide range of features. Marketing: The major source of making
customers aware about its product and services is
marketing. Trailfinders have high focus on
adopting advanced marketing technique to
expand the demand and reach of its products and
services. The most common observed trend in
the tour operator’s industry is to offer discount
and other beneficial offers to attract customers.
There is high support of government in
promoting the travel industry by appointing
ambassadors.
Customer satisfaction: The effectiveness of tour
operator’s industry is measured in terms of customer
satisfaction. Demand of products and retention of
customers are the two major factors that influence the
customer satisfaction. Trailfinders for its growth in
competitive industry has high focus on improving its
products and services to provide high level of
customer satisfaction services.

LO2
2.1 Assess the stages and timescales involved in developing holidays.
Tour operators like Trailfinders is involved in developing holidays and therefore to design the
holiday packages in the most efficient manner it is important to follow the sages and timescales
so that development of holiday packages is beneficial for both customers and as well as travel
organization. Below explained are the major steps that must be followed by Trailfinders while
developing holidays:
Figure 1: Steps involved in development of holidays
(Source: Author)
Market Research: The most important stage in development of holidays is to conduct the market
research to study and analyse the market conditions to identify the demands of customers. It is
important to know about the destination for which travel package is to be designed (Wu
MARKET RESEARCH
PROPER PLANNING AND TOUR
SCHEDULING
CONTRACTING
COST IDENTIFICATION
MAKING THE BROHURE

et.al.2016). The demand of customers in the market and their choices of destinations can be
identified by using PESTEL analysis.
Planning and Scheduling: Planning and scheduling of the package is done as per the needs and
demands of customers. The current tour package is to be designed for 42 students for the period
of 5 days and therefore planning for all the facilities must be done for appropriate number of
members and scheduling must be such that all the activities are completed within the given
constraint of time.
Contracting: It is important to provide cost effective services to the customers by maintaining
own profit margins. This can be achieved by making prior contracts with service provides that
are responsible for providing accommodation, transportation, food and many other facilities.
Prior contracting not only saves money but at the same time it also saves lot of time which will
provide higher satisfaction to customers.
Cost Identification: Overall cost of the package is dependent on the prices involved in each stage
of development of holidays (Chan et.al.2015). Tour operators must identify the cost by
estimating the maximum of rates for each of the service and stage involved in the package. This
will support in maximising the profit.
Designing of Brochure: To promote tour package, Trailfinders must focus on designing
attractive brochures to attract more number of customers. Designing of brochure highly impact
the decision making of customers in a positive manner.
Entire development of holiday with the implementation and execution of all the above explained
stages can be accomplished in 4 month of time period.
Events/
timescale
(2018)
1st Month 2nd Month 3rd Month 4th Month
Research
Planning and
scheduling

Contracting
Brochure
Designing
Figure 2: Gantt chart
(Source: Author)

2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator [M1].
There exist various methods of contracting to make contract with various service providers that
provide food, transportation, guide and accommodation services. Contraction is mainly
categorised as fixed and variable type of contract (Kunreuther and Michel-Kerjan, 2015). For
various components, tour operators utilise different methods of contracting which are explained
as follows:
Figure 3: Methods of Contracting
(Source: Author)
Accommodation: The contract is made with hoteliers to provide stay facilities to its customers.
The current tour package will provide accommodation facilities to 42 students for 5 days and
therefore contract must be made by making sure that they choose they get best stay facilities in
return of their money. Variable contract is used for contracting with hoteliers as it will reduce the
risk in case if number of tourist denies visiting at the end moment. Under this contract, tour
operator is liable to pay only for the number of occupied rooms but with no discount.
Methods of
Contracting
Fixed
Contract
Variable
Contract

Transportation: The facilities include booking of cab as well as coach facilities to serve
customers and facilitate them to visit the local places of the destination in a comfortable manner.
For booking of coach, Trailfinders focus on making fixed contract with the coach service
provider (Shi and Feng, 2016.). The risk factor is high and but is cost effective as compared to
variable cost but at the same time it includes large discounts and offers.
Food: Trailfinders does not make any fix or variable contract with restaurant as different
students have different likes and preferences of food. Therefore, the contract is based on the
basis of ordering of food as per the taste of customers. Therefore, it is requested to managers of
restaurant to not the orders and to make payment accordingly.
Guide Facilities: Fixed contract is made with the guide who takes payment as a whole
irrespective of number of tourists. Guide is responsible for making students aware about
historical importance of various destinations. They are also responsible for communicating
information about new destination and the purpose of visit and therefore, tour operator must
focus on contracting with the person who is a good orator and is experienced in communicating
in different languages.

2.3 Calculate the selling price of a holiday from given information below
The current tour package designed by Trailfinders is from London to Belgium for 42 students for
5 nights. To calculate the overall selling price of the holiday package, tour operator will consider
transportation, accommodation, guide facilities and food facilities.
Current exchange rate for 1 Pound = 1.12 Euros therefore, 1 Euro= 0.892 Pounds
Accommodation will be on twin sharing basis and cost for 1 person is 92 Euros
Therefore, Cost for rooms for 5 days = 42* 5*92*.892 = 17233.44 Pounds
Cost of coach = 7350 Pounds
Cost of guide = 1020 Pounds
Cost of Visitor attraction for 42 students= €52 per person= 52*42*0.892= 19,481 Pounds
Components involved in the package Cost in Pounds
Accommodation Cost 17233.44
Cost of Coach 7350
Cost of tourist guide 1020
Cost of visitor attraction 19481
Overall Cost 45084.44
Mark up cost of 25% 11271.11
Selling Price Of the package 56355.55
Total selling price for 42 students = 56355.55 Pounds and therefore cost of the package per
student is 56355.55/42= 1341.79881 Pounds