Tour Operations Management: Analyzing Trends, Strategies, and Pricing

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Tour Operations Management
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Table of Contents
Introduction................................................................................................................................3
Task 1 (LO1)..............................................................................................................................4
Task 2 (LO2)..............................................................................................................................7
Task 3 (LO3)............................................................................................................................10
Task 4 (LO4)............................................................................................................................14
Conclusion................................................................................................................................16
Reference List..........................................................................................................................17
Appendices...............................................................................................................................19
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Introduction
The Tour Operators industry has grown and extended a lot by adopting an integrated
planning. Hospitality is the way of providing service to people and demonstrating excellence
and quality consistently is considered as a “place” of exhibiting a person’s individuality with
own style. The hospitality industry is composed of a large group of different companies
known as ‘travel and tourism industry’. The tour and travel industry is considered as one of
the fastest growing industries in the world. There are five integrated parts of the tour and
travel industry such as, The tourism lodgings (motels, hotels), transportation service
(aeroplane, ships, buses and trains), food-beverage service (bars, restaurants, catering),
special activities (educational excursions, recreation, events of sport) and retail stores (art and
crafts, gifts). Therefore, the tour and travels industry concentrate on the quality, guest
satisfaction, interactions conducted with the tourists irrespective of religions, cultures, races,
colours, genders, ages, and their sexual orientations.
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Task 1 (LO1)
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry
Current trends in hospitality and tourism
Tour operators which is a company helps in purchasing different products that results in an
exclusive holiday at large and combines them altogether and then sells its final product to the
public (Ballantyne et al., 2018). In this modern era, people are more interested in travelling
and roaming freely around the world. Therefore, the tour operators must be following the
recent trends for the development of tourism. The trends have been developed from the
expectations of tourists, behaviour and attitudes that lead to generation of a number of new
trends. Some of the new trends have exhibited an important impact in the industry.
Changing Face of Tourists
Time is changing day by day and hence the expectations and demands of the new travelers
are increasing. The thirst for searching for new and different experiences, different
adventures, different lifestyles has led to the rising of ‘new tourism’. In this new era, there is
an emergence of new tourism that is more sustainable, environmental as well as socially
flexible, and selectable according to individual choice. A number of approaches are fueling
the growth of tourism. These include initiatives on network tourism and creation of
interpretive leads. The new tourists are driving it since they are independent, prefer individual
travelling highly educated, mature, experienced, conservative in nature, respects different
cultures, and assertive in value for money. They are turning the travel and tourism by
engaging themselves into organizational perspectives of the trip (Huang et al., 2017).
Technological advances
To date nobody can deny the importance of technological advances in tourism. Technology
has influenced the shape and the way of travelling starting from selection of destination of the
vacation, detailed planning of the vacation when and what to do even after returning home
after the adventure spent in the vacation. According to a study done by Google, 74% of the
travellers made their plans of the trips on Internet. On the other hand, 13% still are dependent
on the travel agencies to prepare plan for them. This has been possible due to easy sharing of
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information, availability of resources online and tailor-made holidays. For example, in mobile
technology, our cell phones are now our new tour guide, travel agency, locating best
restaurant, map, etc. This is completely eco-friendly and saves unnecessary wastage of paper
printing. Many hotels can offer digital services and mobile check-in services. In some hotels,
high tech cards are issued for the guests that can detect presence or absence and do automatic
unlocking of the doors before they reach (Riley, 2019). Many hotels are providing solar
panels and advanced systems for controlling air conditioners and electric appliances such as
turning on/off the lights or fans automatically as soon as the guests leave the rooms.
Dynamic Packaging
Dynamic Packaging, also known as Dynamically Packaged holiday is a great option to
customize the holidays, book airlines, meals options in flights, accommodation and
entertainment. Thus travellers are now choosing a dynamic package where they uses internet
to do a thorough research of their holidays and enable to make their arrangements directly by
the hotels, airlines etc. It offers high flexibility where the cost of the vacation becomes
cheaper than the holidays from travel agencies.
Influence of ICT in tourism
There is a recent trend in tourism that uses Information Communications Technologies (ICT).
The ICT integration in tour and travel industry is essential and it enables travellers to access
information anytime and anywhere. The e-tourism is a current buzzword.
World Wide Web (Internet)
The potential use of the World Wide Web (WWW) through internet in hospitality industry
helps in the exchange of information in this digital age. The travellers can find a place of
interest for their vacation, collect images of the places, and perform several operations. Many
hotels advertise their services on Facebook and Twitter by floating the images of the guests
with their review (Mason, 2015). Web service is so fast to identify customizable alternatives,
booking holiday packages etc.
Chatbots and Robotics
Chatbots are the brand new hospitality trends featured in 2018. These can take in charge of
the tasks and therefore saves time and lead to improving the efficiency of the professionals.
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They can even operate in the front desk. These robots can interact with the guests and the
cognitive behavior of the guests can be easily analyzed.
Transport and accommodation
Transport plays a huge impact on travel and tourism industry since the industry is basically
dependent on the available transport systems. The travel and tourism company would suffer a
lot if there is any transportation problem and there will be a huge loss. Therefore, the
transport system should not go down and the consumers should reach their destination and
travel properly around their destination.
The accommodation system has an important role in affecting the popularity of a holiday
destination. One of the most important factors is holiday home ownership, which can affect
the hotels in terms of revenue.
Other important technological advances
There are other advanced technologies that are observed in current trends of tour and travel
industry. For example, Knowledge-based web pages, Online Travel Guides, Information
portals, electronic payments, mobile apps, online world of mouth (e.g. Trip Advisor), Google
Street View, and Internet based travel agents (e.g. Expedia, Flight Centre)
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Task 2 (LO2)
Introduction
In the due course of time, the functionality of the tour and travel industries have become
divergent due to increase in scope and structure of the tours. Nowadays, tour operators are
facing immense pressure in competition at international level. This remains as a challenge to
meet demands of sophisticated consumers.
2.1 Assess the stages and timescales involved in developing holidays
There are different stages involved in developing a holiday package. One of the most
important stages is planning. Trailfinders Ltd. Planned to introduce different techniques that
would attract diverse customers with the series of stages stating with a thorough market
research. Here, a new assignment has been given by Trailfinders Ltd. to create and arrange a
luxury coach and to plan an educational tour for the adult students of over 18 years old
students starting from London, the United Kingdom to Brussels and Bruges, Belgium in July
2020. The students were grouped into a size is 50 students per group and the duration of the
tour is 5 nights in Bruges. Grand Casselbergh has proposed a special rate for the group of
students at 89 Euros per student who will be provided with twin room with a combo of
breakfast and lunch. The seats or rooms should be booked in advance on first come first
basis.
The educational tour consist of mainly adults of age group 18 years, therefore there should be
a choice of destination selection, food preference and interests. The change in fashion must
be kept in mind about the popular hotels. In addition, the excursion should be novel since, old
programmes are not attractive. Moreover, the duration of the tour would be framed according
to student and teacher’s feasibility. Therefore, the stress must be given on the importance of
performing market research before investing amount and time on the educational tour.
Planning and scheduling of a tour is very important (Gür and Eren, 2018). A 54-seater luxury
coach will be designed according to the number of students and teachers. The cost would be
£6,949 which inclusive of all taxes and fuel along with two drivers and a tour manager. The
company has a special offer for the visitor’s attractions charge at €45.60 per student. A local
tour guide can be hired at a cost of €896 during the entire tour.
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The standard of accommodation should also be verified and provided accordingly (Chi et al.,
2018). The students can be given questionnaire for feedback. The students can enjoy the
spring and fall weather and feel refreshed in the month of July.
2.2 Evaluate the suitability of different methods of contracting for different components
of the holiday and different types of tour operator
Contracts are done different components of a holiday and are typically fixed in advance about
12 months before the commencement of the tour. Thus, the tour operators should estimate the
capacity in order to confirm the contracts agreements done with hotels and airlines (Mazur,
2017). However, making contracts too early with the tour operators is very difficult. Decision
should be taken on sales and market research and about the content of the programs. There
are fixed and committed contracts. In these contracts, all the seats or rooms should be booked
on advance payment basis. This is beneficial to the suppliers since accommodation not sold is
already paid. Although, the tour operators are flexible enough to shift their guests, negotiate
prices, or upgrade. The tour operators should be familiar with the hoteliers. The hoteliers
contract the tour operators to ensure the selling of their beds and available more beds. The
tour operators must confirm a specific date on which they can provide the number of beds
actually needed. The hotel gets enough time to sell their remaining beds in a high competitive
price. Contracts are also made with the airlines for the allocation purpose.
In case of a small tour operator, they always book seat allocation on a flight and as soon as
the allocation is sold, they can ask for extra booking of seats. On the other hand, if an
allocation is not sold the unsold seats are returned back to the airlines. They are given a
deadline of about 6-8 weeks before departure for this purpose. The tour operators usually
make ad-hoc contracts when there is a requirement of beds/flight seats. This involves least
risks and has cheap administration charge. These types of contracts are very popular in case
of tailor made, specialist, or luxury travel companies. In addition, there is charter flight,
which is paid by the company such as Club Med. For ticket delivery, the contractor shall
deliver ticket and boarding passes. Tickets should always be delivered not before five days in
advance of the tour. The independent contractors can perform specific tasks and none can
control the independent contractor (Williams and Baláž, 2015).
2.3 Calculate the selling price of a holiday from given information above.
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The calculation of selling price for 50 British students for 5 night’s holiday package from
London, the United Kingdom to Brussels and Bruges, Belgium for educational tour is as
follows:
Calculation of accommodation cost:
Number of
students
Rent of Room Transportation
Cost
Guide Visitor
attraction
charges (per
person)
50 €89 £6,949 €896 €45.60
In Euros In Pound (per
person)
Sub total
Students 50
Room Rent €89 £78.61 £3930.5
Transportation
Cost
£6,949 £6,949
Guide €896 £791.42 £791.42
Visitor attraction
charges (per
person)
€45.60 £40.28 £ 2014
Exchange Rate €1.14 per £1
Total Cost 13684.92
Mark Up 28 % 3831.77
Conclusion
In conclusion, to the understanding of the tour and travel operators industry is very important
in a successful tour management. The thorough analyses of the effects reflected in the
current/latest trends, and developments on the tour operators industry have been done.
Moreover, an insight is gained through the stages involved in creating holidays.
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Task 3 (LO3)
Executive Summary
From the given detail, it is evident that the management of the issues are going to be solved
because new technologies are needed to be taken into consideration. The majority of the
cases it is seen that the department needs to evaluate the service s provided by them and make
changes in accordance with demand.
Introduction
In order to have a better publicity the management needs to think of different medium
through which they can have better kind of publicity in the market. In this context, the best
option to be taken into consideration is the brochure. The following segment is going to
discuss about the factors precisely.
3.1 Evaluate the planning decisions taken for the design of a selected brochure
Designing a proper brochure the management of the organisation Trailfinders has to make
proper decisions regarding framing a brochure. In the following part, detailed information
will be provided as well. There are several aspects to be taken into consideration as well
Cost- The first thing that comes into mind before making any kind of decisions practical is
the cost related to it. The selection of segments where the cost should be intrigued needs to be
made managed as well. According to several reports, the brochure takes around half of any
travel and tourism service provider’s profit. Before making any kind of approach the service,
providing organization needs to make proper kind of analysis of what the market want
otherwise the possibility of having issues related to it will be magnified (Chang et al., 2017).
Deciding the format- In the format selection process the involvement of different kind of
aspects is important. The theme of the brochure gives proper idea of what is needed. The
front cover is the first thing the people will come into contact, the content comes after it, and
it is necessary that both of them are precise and eye catchy. The structure, text and colour
needs to be appealing. The writing style needs to be appealing as well and the photos need to
be attractive and defining as well. The paper style and quality needs to be adequate too
because touch sensation is going to be an important thing as well.
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Target market and budget- The demand of the target market needs to be clear to the people
as well because this is going to provide a better kind of support to the management as well.
The budget idea will be beneficial factor as well.
Determining print specifications- The printing segment needs to be analysed as well before
approach. The colours of the paper needs to be catchy and the management should make
proper kind of analysis as well in order to have better decisions regarding the printing
segment (Xiang et al., 2015).
Timescales and stages of production- the time of the production of brochure needs to be
minimised as much as possible. The majority of the cases it is seen that the issues associated
with the production need to be normalised as well. This is the most important aspect that
needs to be managed as well.
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.
There are different types of alternatives and their sustainability in the current ambience is
going to be analysed as well. The main alternatives of the traditional brochures are CD-Rom,
I-pad, outdoor media and many other things that are necessary for alternate options. Some
of them are going to be described in the following segment and the sustainability factors will
be detailed as well.
In accordance with the recent trend, the social media and the internet cannot be overlooked as
well. The social media is one of the most sustainable options to be taken into consideration
and the majority of the cases it is seen that it provided the best promotional strategies that are
needed for proper kind of management (Chon, 2015). Apart from that, the internet is another
thing to be considered. The internet is the leading trend in the medium the majority of the
cases the Trailfinders are going to get results that are more productive and in this segment,
the option is going to have a better kind of results from promotional perspectives. The CD-
Rom is going to give a detailed analytical aspect where the company can give better
description of the services taken and provided by them. The leaflet and the flyers are another
option that can replace the cost of the brochure and it is a necessary option that is going to
make people believe that one company can provide proper kind of services related to the
aspects (Roger-Monzó et al., 2015).
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These promotional aspects are one of the most reliable ones, which are going to be the best
aspect to minimise cost and being modern the service providers can magnify the productions
from it. This is going to make proper contribution to the management of the issues that come
with the aspects related to marketing and proportioning.
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 a luxury tour
package.
There are many distribution channels that can be taken into consideration and in this case, the
service providers have to analyse all of them in order to take one of them as the selected one.
The distribution channels are direct distribution channels, indirect channels, website and
social media and online travel agencies. All of them are going to be evaluated in order to
make proper justified approach.
Direct distribution system- the system is one of the most preferred ones but it has some
advantages and disadvantages. The process is flexible, it can adapt almost every change, and
it is one of the most time saving options to be taken into consideration (Fountoulaki et al.,
2015). Controlling this option is easier and it is easy to access. There are some disadvantages
too like the sales force is higher and the intermediary system may get dissatisfied with the use
of it.
Indirect distribution system- the indirect distribution system is going to provide the
necessary services that are related with the benefits of the customers. The price becomes
lower and the professional consultation can provide better flexibility. The demerit is the
option cannot provide necessary prompt actions just because of being indirect to the people.
Online travel agencies- the travel agencies are going to provide the best options related to
one travelling aspect. The majority of the cases it is going to be delivered to the needed
people but the demerits are, people often do not get what they have been offered. In case of
Trailfinders, the possibility of such kind of activity is lower (Tran et al., 2016).
From the given detail, it is evident that going for better kind of option means having better
kind of services and the organisation Trailfinders needs to go for the direct distribution
channel to so that they can contact with the customers properly and provide necessary
services to the people.
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