Analysis of Tour Operations Management: Case Study of Trailfinders Ltd

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Tour Operations Management
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Table of Contents
Introduction......................................................................................................................................2
Task 1...............................................................................................................................................3
Task 2...............................................................................................................................................5
Task 3.............................................................................................................................................11
Task 4.............................................................................................................................................15
Conclusion.....................................................................................................................................17
Reference List................................................................................................................................18
Appendix........................................................................................................................................20
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Introduction
The tour operations industry is regarded as one of the most composite and profitable industry in
UK. Organisations are required to carry out their business activities with certain tour and travel
component sectors, comply with appropriate legislations in order to manage the emerging
challenges. The study is going to shed light on the impacts of emerging developments and trends
in the tour operations industry. It is going to highlight the different types of contracts travel
operators along with the various stages involved in designing the holiday packages. Trailfinders
Ltd is going to be taken into consideration for preparation of the study. There are certain
planning decisions to be developed for designing a selected brochure, which will be highlighted
in the study. It will provide relevant details regarding the decisions formed by various tour
operators for enhancing their business performance. In addition, the study will provide the
appropriateness of different distribution methods for sale of a holiday to various kinds of travel
operators.
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Task 1
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry
The EU Package Travel Directive defines Tour Operators as those people who act as the
facilitator between travelers and the travel destination, which they want to visit for a given
charge. There are several types of tour operators in the tourism industry, which include domestic
operators, outbound operators, and specialist operators. All these Tour Operators have expanded
a lot ever since the incidents of World War II and this has all been made possible through the
improve attitudes and behavior of tourists within the tourism industry.
The current and recent trends and developments in the tourism operators industry have been
enlisted here down below:
Technological Advancement – Through the advancement in technology there has been an
increase in the level of information, which is being shared amongst the travelers as well Tour
Operators. This is made possible with the availability more resources through websites on the
World Wide Web, which act as a place where travelers can create custom, made tour holidays.
Dynamic Packaging – Through this form of tourism holiday purchase, travllers have the
flexibility customize their travel experience, as they want by making arrangements on their own
accord. They perform research on the locations they wish to go and the make booking
arrangements of transportation, hotels, airlines and others. Through dynamic packaging tour
operators are also able to charge high prices as well which help them make more operators which
assist them have more scope of expansion of business and employee better and more diversified
employees.
Vertical Integration – In this form, integration a tour operator organization has a high degree of
control and power over another enterprise on several levels of operation, which includes the
distribution chain the tourism industry as well (Atalay et al., 2014). In the UK market, TUI
travel was the first tour operator to perform vertical integration with Thomson travel tourism.
Through this form of integration, dominance is maintained there are more chances of being
recognized in the tourism market.
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Horizontal Integration – Through this form of integration, a tourism enterprise expands into a
larger geographic area or region by elevating the extent and range of services and products,
which is being offered in the recent tourism market (Buckley, 2014). Through horizontal form of
integration, acquisition of another tourism enterprise is made possible. Through this form of
integration, the enterprise has higher workforce to deploy in the market and make more tour
packages available to the consumer.
Low cost Industry - With there being so many tour operators present in the tourism industry.
Every tour operators tries to undercut the other by providing more discounts and offers in the
market to the travelers. Low costing budget airlines such as AirAsia, Cebu Pacific, Jet Airways
and other meaning of low costing air transportation have given travelers more options to travel
several locations on small budget. ICT helps in providing travelers with high levels of internet
speed as well which helps them browse more travel products and services.
ICT Tourism Influence- Information Communications Technologies (ICT) helps tour operators
to change marketable innovation of products and services in a huge range of customers (Ali, and
J. Frew, 2014). Through ICT the buyers have reduced and minimal buyer search costs and have
lowered costs when trying to access markets. Through ICT through is a shift in the power
balance in the travelers and the suppliers in the tourism landscape with there being data being
freely accessible.
There are several trade bodies in the tourism industry which keep a track of all the trends that
prevail the tourism Industry these authoritative bodies include Association of Independent Tour
Operators (AITO), the UK Civil Aviation Authority (CAA) , UK inbound, Federation of Tour
Operators (FTO), and The Travel Association (ABTA). All these bodies help analyze and
interpret the trending data in the tourism industry so that tour operators can be better facilitated
with information.
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Task 2
Introduction
The task is going to shed light on the assessment of different timescales and stages included in
arranging holiday packages for the customers. It will discuss about the different contracting
methods for different holiday components and different kinds of tour operators. In addition, the
task will provide a numerical calculation of sale price of a holiday provided to educational
tourists in London.
2.1 Assess the stages and timescales involved in developing holidays
Tour operators face serious international competition and for coping with the pressure, they are
required to plan and develop attractive holiday packages in order to satisfy the demands of
sophisticated and ever demanding customers. Planning and developing travel packages requires a
series of different stages beginning with the market research and ending with managing post tour
activities.
Market research
For developing holiday packages, tour operators are initially required to conduct a thorough
market research regarding the seasonality of the demand, programmes set by competitors and the
pricing strategy adopted by them to attract customers. In addition, Trailfinders obtains relevant
information about the services provided by the hotels, quality of services provided by different
airline companies and others. It will help the organisation to develop attractive holiday packages
for increasing customers demand and sales volume.
Scheduling and planning
Subsequent to the market research, tour operators form decisions related to the venue of the tour.
In this stage, Trailfinders determine the appropriate time for travelling, the quality of
accommodation needed to be provided by the organisation to the tourists, additional facilities
with accommodation provided by the tour operators to the visitors and so forth (Holland and
Leslie, 2017). Considering the 3A factors i.e. Amenities, Accessibility and Attractions,
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Trailfinders can be able to develop holiday packages effectively in order to provide maximum
satisfaction to the visitors globally.
Contracting
Trailfinders Ltd enters into contracts with other organisations for around twelve months before
the beginning of the holiday season. It is because the organisation is required to make further
decisions about the things to be included in the programme (Vuchic, 2017). For developing the
holiday packages, Trailfinders Ltd enters into contracts with different hotels as well as airline
companies.
Pricing and financial evaluation
This stage involves the development of effective pricing strategy such as competitive pricing,
price skimming, profit margin, mark-up and others for attracting customers towards the packages
and enhancing sales volume (Klassen et al., 2017). By providing special discounts to the tourists,
Trailfinders can be able to promote the holiday packages effectively and raise significant
demand.
Creation of brochure
In this stage, tour operators create simple and attractive brochures, promote it over social media
and other channels for providing relevant information regarding the holiday packages, and
magnetise tourists to purchase the packages.
Advertising
This stage is one of the most important stages for promotion and development of holiday
packages. Trailfinders Ltd make advertisements of the holiday packages to deliver information
regarding the price, quality and the range of services provided in the package to attract customers
towards it. The organisation makes contracts with various advertisements agencies and promotes
its products over social networking sites to gain a huge response from the tourists.
Execution and operation
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The achievement of tour operators is dependent on its effectiveness in operating tour. For
executing a tour package, Trailfinders provides a tour manual to the tour escort, tour manager
and tour as well as tour guide for providing relevant information regarding how tour operators
want to handle and operate tour. The tour manual provides guidelines for handling tour
professionally. By providing guidelines to the tour managers to answer questions based on
destination or location, tour companies can enhance their brand image.
Post tour management
This stage is regarded as the most crucial phase in developing holidays. In this stage, tour
operators manage the feedback of the tourists after providing them with attractive tourism
packages (Chen et al., 2018). In this stage, Trailfinders Ltd obtains feedbacks of tourists posted
on the social media, analyse the responses and take effective steps to address the issues of
customers. It helps the organisation in providing maximum satisfaction to the customers and
gaining their loyalty towards the services. Additionally, the organisation prepares various reports
for assessing the financial benefits gained by the sale of products.
2.2 Evaluate the suitability of different methods of contracting for different components of
the holiday and different types of tour operator
Ad-hoc contracts
It is one of the most suitable methods of contracting adopted by the tour operators when there are
requirements of flights and beds for providing tourism services. It involves cost efficient and low
risky administration. This contracting method is useful in overbooking cases. Trailfinders Ltd
often observe cases of overbooking in peak seasons due to its quality services. At that time, it
becomes essential for the organisation to arrange for extra accommodation for providing quality
stay to the customers.
Fixed contracts
In this kind of contracts, rooms or seats are pre-booked and payment is made in advance. This
contracting method is advantageous for the tour operators as they are going to receive the
payments for the rooms or seats even if they are not sold. The tour operators possess the
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flexibility of moving the guests, decrease price of the services, or make further changes on their
own liability.
Allocation (rooms)
In order to ensure sale of all their accommodation, hoteliers often make contracts with the tour
operators to provide more accommodation when applicable. As per the contracting method, tour
operators are required to make confirmation with hotels regarding the quantum of
accommodation required within a stipulated time. It provides time to the hotels for selling the
seats or beds at an affordable rate.
The different types of tour operators are explained as follows:
Domestic tour operator
These kinds of tour operators are also known as the resident operators. They provide tourism
services to the customers within the geographical boundaries of the nation. These operators
possess specialised knowledge regarding the domestic culture, food and seasons. They can make
repetition of trips, determine the local market’s demand and recommend destination needs to the
nearest destination marketing organisations.
Outbound tour operators
These types of tour operators provide multinational tourism facilities. They provide facilities to
the residents of their nation to explore other nations or continents. These kinds of tour operators
sell attractive holiday packages to the consumers of their own nation, who are desired to explore
different nations (Cetin and Yarcan, 2017). Trailfinders Ltd provide outbound tourism packages
to UK citizens so that they can be able to visit other countries. By conducting foreign tour,
Trailfinders can increase satisfaction of their customers and gain their loyalty related to the
products and services.
Inbound tour operators
These kinds of tour operators provide tourism services in the nation to the visitors coming from
other countries. They supply local aid to the visitors visiting to their nation. The inbound travel
operators make the local arrangements for the airport drop and pickup service and provide local
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tour guides. The activities of the tour operators include arrangements for visiting local attraction,
provide excellent quality accommodation services and at a reasonable rate.
2.3 Calculate the selling price of a holiday from given information above.
The sale price of the educational tour packages from UK to Bruges, Brussels and Belgium,
developed by the tour operator for fifty students, in each group in London for five nights are
computed as under:
Number of the
students
Rent charges of
Room
Transportation
expenses
Guide Charges of
visitors
attraction
(per head)
50 €89 £6,949 €896 €45.60
In Euro In Pounds (per
head)
Total
Students 50
Rent of the room €89 £78.61 £3930.5
Transportation
expenses
£6,949 £6,949
Guide €896 £791.42 £791.42
Charges of
tourists attraction
(per head)
€45.60 £40.28 £ 2014
Exchange Rate €1.14 per £1
Total Cost 13684.92
Plus: Mark Up 28 % 3831.77
Total selling
price
£17516.70
Table 1: Calculation of sale price
(Source: Created by the leaner)
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Conclusion
By the end of the task, it can be concluded that there are certain stages to be adopted by tour
operator for development of holiday packages, which can provide maximum satisfaction to the
tourists. Various contracting methods such as, ad-hoc contracts, fixed contracts and others play
an important role in encouraging the tour operators to enhance their business, maximise
customers’ satisfaction and gain substantial profits.
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Task 3
Introduction
The task is going to provide relevant discussions on the effective planning decisions that are
taken for designing a brochure selected. It is going to discuss about the suitability of the different
alternatives for the traditional brochure for various kinds of tour operators. It addition, it will
highlight the evaluation of different distribution techniques for sale of holiday for tour operators
of different types.
3.1 Evaluate the planning decisions taken for the design of a selected brochure
A brochure refers to the publication that comprises of the relevant information regarding the
package provided by the tour operator. It should be designed in an effective manner in order to
attract the customers to procure the products and services. There are certain decisions taken by
the Marketing department of Trailfinders for designing an attractive and convincing brochure.
Cost
One of the most important decisions to be taken by the tour operators is the cost to be incurred in
designing the brochure. Usually, expenses in distribution and print of brochure consumes around
half of the gross profit amount for British travel operator. By the help of preparation of proper
budgets, tour operators can effectively avoid unnecessary costs and control the same incurred in
designing brochure.
Decisions to be taken about the format of the brochure
Marketing department of Trailfinders Ltd makes plans for the theme of the brochure, content,
choose the best quality of paper for developing the brochure as well as determines the writing
style such as calligraphy and others. Photographs to be published on the brochure, should be
aligned to the services provided and the theme used by the tour operators. Deciding format of the
brochure also includes selecting the text’s font style and size, which can be easily read and
understood by the customers.
Budget and target market
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