Tour Operations Management: Analysis of Trends, Pricing & Decisions

This report provides a comprehensive analysis of the tour operator industry, covering current trends, holiday development stages, pricing strategies, and strategic decision-making. It examines the impact of technology, disposable income, and product development on the industry, evaluating the suitability of different contracting methods and pricing models. Furthermore, the report assesses the planning decisions involved in brochure design and explores alternative marketing approaches. It also compares the strategic and tactical decisions made by various tour operators in different market situations. The document is contributed by a student and available on Desklib, a platform offering study tools and resources for students.

Tour Operations Management
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Table of Contents
Introduction......................................................................................................................................4
LO1..................................................................................................................................................5
P 1.1 Analyse the effects of current and recent trends and developments on the tour operators
industry........................................................................................................................................5
LO2..................................................................................................................................................7
P 2.1 Assess the stages and timescales involved in developing holidays....................................7
P 2.2 Evaluate the suitability of different methods of contracting for different components of
the holiday and different types of tour operator..........................................................................9
P 2.3 Calculate the selling price of a holiday from given information......................................11
LO3................................................................................................................................................13
P 3.1 Evaluate the planning decisions taken for the design of a selected brochure..................13
P 3.2...........................................................................................................................................15
P 3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of the tour operator and recommend the most appropriate for your tour
package......................................................................................................................................16
LO4................................................................................................................................................18
P 4.1 Evaluate the strategic decisions made by different types of tour operator.......................18
P 4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations....................................................................................................................................20
Conclusion.....................................................................................................................................22
References......................................................................................................................................23
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Introduction
The report will conduct a study of the tour operator industry. Tour operator industry is a huge
segment of the travel and tourism industry. The industry is an ever-growing industry. The
industry is engaged in organising multi-national tour packages. The tour operators include
manages the booking and providing with services related to the tour management. There are
various tour operators mainly as mass market tour operatives, niche market tour operatives, and
inbound and outbound tour operatives, national and international tour operatives etc. The report
will evaluate the stages involved in developing a tour package. The report will present with a
management report to demonstrate the application of planned and premeditated decision made by
various tour operators in the industry.
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LO1
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P 1.1 Analyse the effects of
current and recent trends
and developments in the
tour operators industry.
Introduction
In this report, the impact of
trends and developments,
present and modern on the
tour operators industry is
analysed. The report will
study the trends from the
travel and vacation industry
and the tour operators
industry.
The tour operator industry is a
growing industry. The
industry is growing rapidly
due to the increase in the
travel and tourism industry.
The production of packages
for various destinations,
providing the required
services, recreational activities
etc. all is the part of tour
operator industry (Mowforth
and Munt, 2015). The effect of
the recent trends and
development over the industry
Product development- The
industry is engaged in providing
with customised product and
packages to the consumers
rendering to the needs and
demands of the customers. These
packages are developed on the
new concepts and themes which
have emerged over the period of
time. In a recent survey executed
by Trivago, it was found that
more than 42% of the tours are
organised according to the needs
and requirements of the tourist.
Increase in the income
disposable- The consumers of
the industry have more
disposable income than before.
With the development of the
living standards of the
population, the income
generation and disposable income
have also increased. The increase
in such income has altered the
tour operator industry. Now the
industry provides leisure and
luxurious tours and packages for
the elite classes of the society.
Conclusion
The report has identified
the increase in the
application of technology,
more disposable income
and product development
has the impact of present
and new movements and
expansions in the tour
operators industry.
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are studied as below.
Increase in the application of
technology- The travel and
tourism industry has been
developing on a rapid growth.
All the transactions and
activities are not facilitated by
the application of technology.
Due to this increase in the
application of technology the
tour operator industry has
evolved with online payments,
online bookings and
transaction to match the
requirements of the industry.
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LO2
Introduction
The report has described the various stages involved in the development of the holidays. The
report evaluates the sustainability of the methods adopted to develop the packages. Lastly, the
report will be calculating the marketing price of a holiday package.
P 2.1 Assess the stages and timescales involved in developing holidays.
There are certain phases that are involved in developing the holidays. These stages are discussed
as below:
Exploring the destination- The initial stage is to explore the destination amongst the hundreds
and thousands of destinations available in the globe. The selection of the destinations is based on
various factors and analysis. The factors that influence the destination selection are the needs and
requirements of the tourist, the economic conditions of the destination, the social and cultural
factors of the destination etc. The analysis to select the destination includes the Pestle analysis
which analyzes the economic, social, political, environmental factors of the destination.
Scheduling the destination- The next stage is to schedule the destination. This stage includes
the decision-making process, the booking and confirmation, the section of the route, tour
accommodation, services and facilities etc. (Kärcher, 2013). The stage includes the selection of
the tourist attractions that are to be visited in general.
Determination of the price- The next stage is to determine the costing of the packages. In this
stage, the tour operator company negotiates the prices with the suppliers of different services and
accommodation facilities. The stage involves in the determination of the prices, the discounts,
special offers, coupons etc. The final element is to determine the selling costs of the package to
the consumers in the market.
Marketing the packages- At this stage, the tour operator companies market the packages
developed in the above stage. In this stage, the companies engage into aggressive promoting and
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marketing activities and programs in order to sell the packages to the consumers in the market
and gain a higher share in the market as compared to the other tour operators.
Execution of the tour- This is the last stage of developing the holiday. In this stage, the tour is
executed in the real life (Kerosi, 2014). All the marketing strategies and the planning come into
action and the tour is executed. The services are provided to the consumers and the costs are
exercised.
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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
The different types of tour operators in the tour operating industry are as follows:
 Inbound tour operators
 Outbound tour operators
 Mass market tour operator
 Specialist tour operator
 Domestic and international tour operator
The different components of different holidays are as follows:
 Accommodation
 Tour routes
 Recreational activities
 Niche markets
The types of methods used in contracting the tours are mostly classified as the fixed contracts
and sales only contracts. In the fixed contracts the tour operator contracts in volumes or in full
capacity in order to maximise their profits and revenues. In this contract, the vendor has to pay
for the full volumes regardless of the seasonal bookings and programs. The tour operator
provides high discounts and offs to the consumers to avail the maximum capacity. In the sales
only contract the tour operator has to pay only for the capacity that is actually used by the
operator (Evans, et. al., 2012). Such contracts help the tour operator to avail the advantage of
high demands and holiday seasons. The tour operator has no worries about the un-utilized
capacity. In such contracts, the tour operator sells the capacity individually to the consumers and
the packages are designed according to the needs and requirements of the consumers.
As per the above discussion, it can be stated that both the contracting methods are applicable
according to the situations prevailing in the dynamic market. The sale only contract is
sustainable in the less operational seasons and when the packages are to be customised. The
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fixed contracts method is sustainable in the high demands and holiday seasons to maximise the
revenues and profits of the tour operators.
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P 2.3 Calculate the selling price of a holiday from given information
Particular Amount in £
Cost per person
[96*42/2*1.12*5]
11,289.6
Bus costs for luxury coach 11200
Costing of the tour guide £945
Total cost 23,434.6
Mark-up 33% 7,733.42
Sales price 31,168
Calculations-
 Exchange rate= €1.12
 Per person selling price= 31,168/42 = £742
 Total sales price= £ 31,168
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Conclusion
The report has identified determination of price, execution of the tour package etc. as the stage
involved in developing the tour package. The report has evaluated sales only contract as a
sustainable method of contracting for the off-season and customised packages. The method of
fixed contracting has been identified sustainable for the peak seasons and huge group bookings.
The report has calculated £742 as the price person in a tour package for 42 students for 5 nights
stay.
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