Tour Operations Management Report: TUI, Packages, and Strategies

This report provides a comprehensive overview of tour operations management, focusing on the roles and functions of tour operators, the structure of the tour operating industry, and the development of package holidays. It examines the stages involved in creating travel packages, including defining operational processes, package promotion, and review and refinement. The report also includes a cost analysis for a sample luxury coach and educational tour, considering expenses like luxury coach costs, attraction charges, and local tour guide fees. Furthermore, it explores the strategic and tactical decisions made by tour operators, using TUI as a case study. The report also explores the impact of integration on the scale and structure of large mass market and independent specialist tour operations.

Tour Operations
Management

Table of Content
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................2
Explain role and functions of tour operator.................................................................................2
Scale and structure of tour operating industry and its comparison large mass market operators
and independent specialists operators .........................................................................................3
Impact on integration on scale and structure of large mass market and independent specialist
tour operation...............................................................................................................................4
PART 2............................................................................................................................................4
Explore the different stages included in developing packages holidays......................................4
Produce the costs packages holidays...........................................................................................6
PART 3............................................................................................................................................7
Review of range of luxury package tour programmes.................................................................7
PART 4 ...........................................................................................................................................8
Different strategic and tactical decisions made by TUI and other specific tour operators .........8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Tour operation management is described as company which purchases individual travel
elements separately from various suppliers. Tour operators play very essential role in travel and
tourism through managing the packages holidays which are the crucial characteristics of life in
the 21 century. Tour operators are at the head of travel and tourism sector in the today's world,
trying out new destinations and holiday experiences to satisfy the ever-changing requirements
and expectations of travellers (Filby, Stockin and Scarpaci, 2015). Present Study is based on
TUI. It is British leisure travel group. Company was formed through merger of first choice
holidays PLC. This report will explain role and functions of tour operators. It will state scale and
structure of tour operating industry. Furthermore, it will explore different stages involved in
developing packages holidays and also produce costs packages holidays.
PART 1
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Explain role and functions of tour operator
Tour operators purchase range of tourist products in majority which involves airline's seats,
hotel rooms, coach facilities. They package them for subsequent sale to retailer or consumers.
Their product is also known as inclusive tour packages.
Large Mass market operators:
Mass market tour operator which organizes tours of people at the time. Also, manage
transport accommodation, activities and any additional services which can be needed. They
require reasonable paths and ways of transport. Where travellers get most of the adventure and
what facilities can be offered for free. This kind of tour operator can understand operations of
related firms and ways of complement or conflict with one they run (Robinson and et.al., 2016).
Independent specialists’ operators:
This kind of tour operator is differentiated to mass market tour operator which puts
together packages with combinations of accommodation, travel and sometimes transfer. It is
more flexible for the consumers to able to do what they want to do. They specialize and serve to
tourists’ interests which are cycling holiday, travel. Also, they have some clients than mass
operators.
Role of tour operator:
 Tour operator is responsible for giving general and specific advice for various travel
destinations.
 They play role in drawing up complex travel routes and assuring that meet all the
requirements of the consumers (Kato, Hosono and Yamao, 2015).
 Tour operator play duty in making arrangements for transport, accommodation, tours
and activities.
 They play role in utilizing computer database to research information about hotel
accommodation fares and hotel ratings.
Functions of tour operator:
Marketing or sales: Tour operator acts as joint among services provider and demand. Also,
they purchase parts of services providers offer over specific time period for particular prices
(Cetin and Yarcan, 2017). Tour operator sells holidays through travel agents and direct to the
public with internet booking presenting impressive increases in recent years.
Planning and arranging: Tour operator perform as planning and advertising different
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promotions and also making presentations to travel groups. They plan for holidays to attract the
more and more consumers towards the firm.
Production: Tour operator develop, plan, reserve, consult and guide the consumer during
travel. Also, they deliver value added to the consumer better product, easy to organize, cheaper
than company by consumers (Hsu and et.al., 2017). Also, they make secondary management for
consumers who have led their trips broken through unanticipated issues etc.
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Scale and structure of tour operating industry and its comparison large mass market operators
and independent specialists’ operators
Scale and Structure of tour operating industry:
There are many sectors which make up tour operating industry. It involves transport,
tour operator, travel agent, attraction, accommodation and ancillary services.
Scale of Tour operating industry:
Revenue:
The revenue of TUI is total of £19523.9 million within the 2018.
Employees:
There are 70000 employees are working in the TUI in the 2018.
Profitability:
The underlying operating profits of TUI is total of £490 million in the United Kingdom.
Structure of Tour operating:
 Transport: It is backbone of sustainable economy which brings people together,
facilitates trade and sustains tourism (Çetı̇nkaya and Öter, 2016). There are many
principals in transport sector involve airline, airports, ferry, cruise, car-hire, coach, train-
operating firms. Each of them has played role in travel and tourism industry.
 Tour Operators: The role of tour operators is to put together all the various elements
which create holiday and sell them as packages to the customers. They create contract
with hotelier, airlines and other transport firms to put together. There are three kinds of
tour operators serving for the various kinds of tourism like outbound, inbound and
domestic. TUI is example of outbound tour operator.
 Travel agents: The role of travel agents is to provide advice and data, sell and manager
booking for number of tour operator. Also, they sell flights, ferry booking, car hire,
insurance and accommodation as separate goods (Hsu and et.al., 2016). There are some
travel agents like independent travel agent, business travel agents.
 Attractions: This appeal to the domestic tourism market and inbound tourism market.
There are numbers of various kinds of attractions, but they can wider divide the as
follows: natural attractions, man-made attractions.
 Accommodation: There are various kinds of accommodation available in tour
operating industry. It involves hotels, holidays parks, self-catering, campus and so on.
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 Ancillary services: Most of the support or ancillary services for tourism are in the
public sector. There are some areas involves in it such as marketing, e-tourism, product
quality, workforce abilities, supporting people, improved information and statistic (Sari,
Bulut and Pirnar, 2016).
Impact on integration on scale and structure of large mass market and independent specialist
tour operation
There are two kinds of integrations such as horizontal and vertical integration which are
strategies utilized through businesses in the similar industry or production procedure.
 Horizontal Integration:
Organization takes over another which operates at the similar level of value chain in the
industry. Firms can select to undergo horizontal integration in relation to raise the size, diversify
good or services offering, accomplish economies of scale or decrease competition (Vellas,
2016). In case tourism business, if the tour operator purchases another tour operator at the
similar level in the chain of distribution which is called as horizontal integration. For instance:
British Airways was taken over Easy Jet.
 Vertical Integration:
The acquisition of business operations within the similar production vertical. Some reasons,
firms select vertical integration which include strength of supply chain, decreasing production
costs, capturing upstream or downstream profitability or accessing new distribution channel. It
can be backward integration for instance tour operator purchase hotel. For example: first
choice and TUI are both are tour operator, and they merged together.
PART 2
Explore the different stages included in developing packages holidays
Package can be determined as combination of two or more goods, showed as individual
sale, so that consumer gains an advantage compared with purchasing the products separately.
Packages holiday comprises transport and accommodation advertised and sold together through
vendor called as tour operator (Evans, 2015). The holiday packages are made by tour operator
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and sold to consumer through travel agents. There are various stages for developing packages
holidays such as:
Development of packages: It is necessary to develop the packages once TUI has
developed plan for “escorted luxury coach and educational tour” targeting for adult students’
market from London, UK to Belgium visiting, Ghent, Brugge, Ostend, Antwerp and Brussels
which named Summer 2021. Also, TUI operator needs to ensure that price is affordable, so that
number of students will be come on this tour.
Defining operational process: After developing packages, TUI operator needs to define
operational procedure which is very important (6 steps to creating great travel packages, 2019).
It involves people who take booking, managing inventory, takes payment and agreed terms of
fund transfer and also ensure that all employees are well-trained, aware and well-informed about
the packages.
Packages promotions: It is the necessary to promote the packages for attracting more
students, so that, TUI follow social media, e-brochure for promoting the package which name
“escorted luxury coach and educational tour”. Also, they joint logos or branding can increase
promotion and define professionalism behind the package (Faccio and et.al., 2015). They
combined displays in location and at the visitor information centre.
Review and refine: The last stage of developing holiday packages if frequently forgotten
and wider essential. In this, company needs to listen to consumers and watch online review to
collect feedbacks. It is the essential that deliver on promise of firm. Tour operator can consider
adding new good to their packages to capture new enthusiasm, be flexible enough to adjust to
meet consumer requirements and wants.
.
Therefore, tour operator like TUI make sure that following all stages effectively for
developing holidays packages for targeting adult students market.
Nature of tour: “Escorted luxury coach and educational tour” Summer 2021.
Tour Location: London, United Kingdom.
Date of Commencement of tour: 1-07-2019
Duration of tour: 7 nights
Nature of tourists: Students (Over 18 age group)
Place to Visit: London, United Kingdom to Belgium, Ghent, Brugge, Ostend, Antwerp and
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Brussels.
Tour costs: 125 euros per person.
Note: Any modification in the tour plan will be informed before 15 days of the commencement
of the tour. Cancellation policies relating to tour will be under the single discreetness of the
organization management.
Produce the costs packages holidays
It is necessary to estimate each and every expense which involves in luxury coach and
educational tour for targeting the adult students market. There are many expenditures like luxury
coach, visitor attractions charge, local tour guide, selling and administration costs and profits.
Therefore, TUI operator needs to ensure that calculate appropriate expenses and costs for
developing holidays packages which named as “Escorted luxury coach and educational tour”
Summer 2021 for meet targeting needs of adult students (Tufano and et.al., 2018). This can help
to increase brand image and awareness towards the company, its products and services like
holidays packages. Also this can aid to increase sales and profits of TUI. Affordable pricing of
holiday package can be helped to improve consumer attraction and their experience in the
marketplace. Therefore, TUI needs to focus on calculate the overall costs of package to meet
targeting requirements of students.
Computation of cost
Particulars Amount (in Euros)
Price of the luxury coach (7800 * 1.09) 8502
Visitor attractions charge for 50 students 2700
Cost of a local tour guide 960
Total expenses 12162
Number of students 50
Cost per students
CPS = Total expenses / number of students 12162 / 50 = 243.24
25% mark-up in unit cost 243.24 * 25% = 60.81
Price per student 243.24 + 60.81 = 304.05
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PART 3
Review of range of luxury package tour programmes
It is necessary to take review the range of luxury package tour programmes. This can help
to meet the target market needs. Therefore, TUI can collect luxury holidays brochures from high
street travel shops and online brochure from respective tour operate websites (Farmaki,
Georgiou and Christou, 2017). There are many websites and social media platforms which are
followed by the TUI to take review about the “Escorted luxury coach and educational tour”
Summer 2021, because majority of consumers follow online platforms like social media for
giving feedbacks about the tour and information relating to packages. The high street tour travel
shops is called as traditional brochures. The conception of designing traditional brochure have
been challenged through the existence of some suitable alternatives which have copped up. For
example:
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The alternative brochure of TUI can be taken as references. Company has decided to
introduce the new website for accommodative the TUI Booklet store. This respondent website is
the most updated version of largely impactful project to deliver the brochure regarding package
which is “Escorted luxury coach and educational tour” Summer 2021 through online. This can
assist the firm decrease printing costs and also appreciable reduction in waste which has been
accomplished (Szopiński, 2017). It can also respectable advantages to the environment. This
website enables availability of consumers to the all TUI brochure and specially brand on any
internet allowed device such as computer, mobile, etc.
In this context, TUI should follow other methods of distribution for aim of selling holiday
exist. This can be evaluated with references to TUI Group. The Omni channel distribution
system of TUI involve retail store, websites and call centres. The broad network of distribution
channels allows more choice to the consumers. This kind of method should help to take review
of range of luxury packages tour programmes like “Escorted luxury coach and educational tour”
Summer 2021 which is organized by TUI. Through this, company should collect feedback and
review relating to luxury coach holidays package for adult students and targeting them (Picazo
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and Moreno-Gil, 2018). The aim is to become leading tourist operator consisting of platform
hosting wider range of goods and services.
For example: direct distribution channels are leading strategy followed by TUI group. Raising
the direct distribution of holidays reduce on distribution costs and also decrease the dependency
on third party distributors which aim to consumer relationship aspect. This can help to increase
brand image and awareness towards the company, its products and services like holidays
packages which named is “Escorted luxury coach and educational tour Summer 2021”. Also this
can aid to increase sales and profits of TUI.
PART 4
Different strategic and tactical decisions made by TUI and other specific tour operators
Strategic planning is procedure of firm to describe strategies, direction and making
decisions relating to allocate resources to pursue strategy of company. Tactical planning is the
current operations of different parts of the company (Çetı̇nkaya and Öter, 2016). Strategic
decisions are taken by TUI for the developing holidays package which title “Escorted luxury
coach and educational tour Summer 2021”. These kinds of decisions are taken through company
to give quality services to the students and make purchaser aware about the facilities of TUI.
This kind of decisions comprises costs of packages, brochure designing, appropriate distribution
channels and targeted consumers (Hsu and et.al., 2016). These all kinds of strategies can assist
the TUI to gain sustainable development and maintain market orientation. Some of strategic
decisions are such as follows:
Strategic Decisions:
Promotion strategy: It is centred portion of the company which aid the firm like TUI to
increase profitability and keep market orientation of the firm within the market. Therefore, TUI
operator's needs to follow different promotional tools like social media marketing, digital
marketing, advertisement and so on. Through these strategies, company easily promote the
holiday package which is “Escorted luxury coach and educational tour Summer 2021”. This type
of strategic decision aids the firm to gain competitive edge and enhance profitability of TUI.
Also, operator make sure that strategy management can aware the purchaser about holiday
packages and also mention the discount and price of the packages (Faccio and et.al., 2015). This
kind of solution can improve the consumer experiences towards the holiday packages of TUI.
This can help to increase sales and profits within market environment.
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Segmentation, targeting and position: It is the leading strategy which can be made and
implemented by TUI. In this strategy, company can create the plan for selected segments,
targeting audience and making position within the marketplace. In this strategy, company select
demographic, geographic consumer group segment in the market. In this context, tour operator
target adult students market over 18 age groups for developing the holidays packages and
targeting needs. These kinds of decisions are take through TUI to serve quality services to the
customer and retain them with the firm (Tufano and et.al., 2018). This kind of solution can
improve the consumer experiences towards the holiday packages of TUI. This can help to
increase sales and profits within market environment.
Pricing strategy: It is the main strategy while organized the holidays packages by the
TUI. Company has followed competitive pricing strategy which helps in giving competitive edge
for tour operator through directing on holiday packages price which other tour operator are
offering to customers. These all kinds of strategies can assist the TUI to gain sustainable
development and maintain market orientation. This kind of solution can improve the consumer
experiences towards the holiday packages of TUI. This can help to increase sales and profits
within market environment.
Tactical Decisions:
Tactical decisions are taken by TUI for the developing holidays package which title
“Escorted luxury coach and educational tour” Summer 2021. This can help to increase consumer
base for the firm (Picazo and Moreno-Gil, 2018). There are various external factors can influence
the tactical company. The main direction of the TUI is to increase profitability of the firm and
take decisions in favour of the firm. Also, this can help to improve consumer experience towards
the holiday packages which is organized by TUI. There are some tactical decisions taken by
company such as:
 Tactical decisions help in assuring smooth and flexible operation of the firm and also aids
in avoiding the potential of any kind of confusion in relation to daily company matters.
Also this can help to improve consumer experience towards the holiday packages which
is organized by TUI.
 There are certain tactical decisions made through tour operator like TUI take into
consideration the view of negotiation with services provider, creating different
management in relation to transportation, lodging and so on (Szopiński 2017).
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 This can help to maintain healthy relationship with stakeholder and informing them in
relation to organization behaviour. Also this can help to improve consumer experience
towards the holiday packages which is organized by TUI.
 Use of coach: It is kind of tactical decision which can be taken by TUI that is to give
luxury coach to students. It is very easy and specific service for the consumers. This type
of decisions can aid the company to increase profitability, sustainability and
overcoming risks of the business (Farmaki, Georgiou and Christou, 2017). Also this can
help to improve consumer experience towards the holiday packages which is organized
by TUI.
 These kinds of tactical decisions help to increase sales of holiday packages organized by
TUI which named as “Escorted luxury coach and educational tour” Summer 2021. Also,
this can help to efficiency and uniqueness of business within the travel and tourism
industry.
CONCLUSION
This report has summarized that role and function of tour operator which planning,
organizing, promoting, marketing and selling of tour packages in the market. It can be concluded
that scale and structure of tour operating industry and integration impact on the industry. It can
be discussed that process of creating holiday package which involves different stages like
development of packages, promotion strategy, review and refine of overall packages provide by
tour operator for adult students to meet targeting needs. It can be concluded that company has
taken different strategic and tactical decisions like promotion, pricing, segmentation, targeting
and positioning to improve consumer experience towards the firm.
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