Tour Operations Management: A Comprehensive Analysis

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TOUR OPERATIONS MANAGEMENT

Table of Contents
INTRODUCTION............................................................................................................................. 3
LO1.................................................................................................................................................4
LO2.................................................................................................................................................7
LO3- REPORT................................................................................................................................15
LO4............................................................................................................................................... 21
CONCLUSION............................................................................................................................... 25
REFERENCES.................................................................................................................................26

INTRODUCTION
Every individual wants his/her travel experience to be a memorable experience. Owing to this,
it becomes necessary to ensure that the travel experience is being enhanced by appropriately
managing the time available with the tourist for travelling. The responsibility of enhancing the
overall travel experience for any individual is of the Tour Operator. The tour operators are
responsible for making arrangements for a trip by taking into consideration the budget, interest
and choices of the individuals. This assignment is being made with the objective of gaining a
detailed understanding of the tour operations management by analyzing the different stages
involved in the creation of holidays. The assignment would also be focused on determining the
best methods of making strategic decisions and distribution.

LO1
‘EXPLORING THE TOUR OPERATING SECTOR’
The introduction of new products and services which possess the capability of enhancing the
customer experience determine the future growth and success of organizations within the
travel industry such as TUI UK.
TOUR OPERATOR
Tour operators can be defined as the person or an organization who takes up the responsibility
of making reservations for the travelling and accommodation of tourists. For instance, the tour
operators take charge of making bookings for the flight of the travellers, their commutation
from airport to hotels and also make other arrangements by making bookings for sightseeing
and hotels (Richards and Font, 2019).
ROLES OF TOUR OPERATORS
The tour operator efficiently makes a combination of the touring and the travelling components
with the objective of creating a memorable holiday plan. They are responsible for preparing
eternities. The most common services provided by the tour operator are the provision of
arranging local representatives or guides along with the bookings for flight and transfer facilities
from the hotels to airport and vice versa (Lozano et al., 2016). All these services are being
provided in the form of a package to the clients. At the niche level, the tour operators can also
provide specialized packages to the clients for providing them with experiences associated with
some special form of activity. The introduction of the internet has also been helpful in providing
opportunities for the self-tailoring of holiday packages (Cetin and Yarcan, 2017).
FUNCTIONS OF TOUR OPERATORS
The most important functions of a tour operator are as follows:
 The tour operator is responsible for planning the tour by drafting a tour itinerary which
comprises up of all the details regarding the tour.

 The tour package is being defined by acquiring different travel components and
combining them for individual customers.
 The functions include making arrangements for the tour in accordance with the
demands of the tourists (He et al., 2018).
 They are responsible for providing accurate and timely tour information to prospective
customers and tourists.
 The tour operators are responsible for making reservations by ensuring that they are
connected with the entertainment organizations, transportation sector and the
accommodation sector.
 Travel management is required from the start to the end of the tour, by taking care of
the fine details of all the facilities which are required by the tourists.
 Evaluating the available options to provide a unique travel experience to the traveller at
the pre-determined prices.
 The functions of tour operator include undertaking promotional activities and also
indulging in sales and marketing activities (Glover et al., 2016)
 They are responsible for taking care of the glitch which might arise within a tour
package.
SCALE OF TOUR OPERATING INDUSTRY
The tour operating industry majorly comprises up of a large number of small scale tour
operators. In addition to this, it is also known that the holiday packages market is being majorly
dominated by the small number of tour operators who function at a global level. The tour
operators majorly work within the private sector, which means that they work with the
objective of seeking profits and also require extensive monetary capital for surviving their
business operations (Goffi et al., 2018). The major trends which can be seen within the industry
are the economies of scale, the vertical integration and the horizontal integration. Horizontal
integration is said to exist in situations when the tor operating companies join their hands for
removing the competition within the industry. By this, the companies can increase the
economies of scale and also increase the overall purchasing power. The vertical integration is

said to exist when the businesses are being acquired at different levels of the distribution
channel. This could be either forward integration or backward integration (Camilleri, 2018). By
adopting this, the company can ensure its control over all the activities which are being
undertaken for providing tour packages to the customers.
STRUCTURE OF TOUR OPERATING INDUSTRY
The structure of the tour operating industry comprises up of six major components:
 Tourist attraction - These are the natural or man-made locations which are being
visited by the tourists. The man-made attractions are being constructed for attracting
tourists.
 Transport - When tourists are required to reach tourist destinations, transportation
plays a key role. The transportation could be rail transport, air transport and also road
transport (Hsu et al., 2016).
 Accommodation - It is very essential for the tour operators to ensure that
accommodation is available for the tourist who are visiting a place for more than the
duration of one day. The accommodation could be a guest house caravans or hotels.
 Tour operators - Tour operators are responsible for combining the components into a
package and also fulfilling the requirements of the customers.
 Travel agents - the tour operators refer the packages to the travel agents who sell the
holidays by using brochures. They earn a small commission for the services provided by
them (Glover et al., 2016).
 Tourism and development – these are situated across the countries for ensuring that
the visitors can gain information about the location visited by them. For this reason,
they are required to take an extensive promotion and advertising activities.

LO2
Step-by-step’ guide on ‘How to create a package holiday’
For the creation of the package holiday following are the stages which need to be considered by
the tour operators and which are as below:
Research: This is the first stage that includes planning and developing of the holidays and it will
undertake the recognition of the key essentials and requirements of the destinations and to
make the proper tourist arrangements. As for instance the research will cover the political and
economic conditions of the Belgium to assess the favorable factors of the Belgium market that
can affect the student’s holiday trip. The research planning goes for two years where the
different destinations are being compared and along with this, hotels. Destinations, tours etc
are also being determined (Ivanov, et al. 2015).
Negotiation: The second stage is the negotiation which is being followed after the final
selection of the destination and it includes tendering for the design, printing and production of
the brochures. It also includes doing negotiation with the airlines for charter flights, hotels,
services, tour operators etc. After some month, all settings have been completed and contract
has also been completed with airlines, hotels and transfer services (Leung, et al. 2015).
Administration: This step includes the production and preparation of the brochures. After it the
exchange rates is being determined so that the selling prices is estimated on the basis of the
inflation and other factors. It also includes the training of the staff and new hiring. The last step
ensures to have the finalizing of the tour prices and which is being followed by printing of
brochures and establishment of the reservation system (Ivanov, et al. 2015).
Marketing: The next step is the marketing and which ensures to distribution of brochure in the
market and to the agents. The marketing activities include sales promotion and launch of the
product. The advertisement and promotion of the product to trade and pubic takes place in this
stage (Leung, et al. 2015).

Tour management: It is the final stage of creating the tour package and which includes
customer care, customer correspondence. The actual tour is being initiated and payment to the
suppliers is made. The payment to the suppliers is also being given.
Figure 1: Steps to create the package holiday
Source: Author’s work
The timescale for the holiday planning from London to Brussels as under:
Developing
package holiday
Research/
Planning
Negotiation
Administration
Marketing
Tour
management

Activities March 2017-
Jan 2018
Feb/Mar
2018-
April/May
2018
July 2018-
August 2018
Sept/Oct
2018- May
2019
July 2019
Market
Research
Negotiation
Administration
Marketing
Tour
management
The stages of the development of the tour packages differ between the different tour
operators. It depends upon the requirement of tour operator of tour development. The tour
development processes vary as per the standard set by the different tour operator. TUI group
follows the above mentioned stages for the development of the tour package. On the other
hand, the development process of the package holiday for Virgin group is different, because the
time taken for the development of the holiday package is longer than the TUI group and they
take more time for each of the stage (Leung, et al. 2015). The stage for the Virgin Group starts
from the destination research, and after it the tour itinerary development also takes place for
the Virgin Group, they also go for the costing after the negotiation of the different suppliers.
The pricing of the different tour operator is being developed separately.
Brochure-

‘STEP-BY-STEP’ GUIDE ON ‘HOW TO COST A PACKAGE HOLIDAY’
Within the packaged holiday tours, the costing would comprise up of local transportation and
air travel, accommodation and other expenses which would be incurred during the holidays.
The following is a step by step guide of determining the costs of a holiday package:
Step 1: determining and defining the travel itinerary
The cost of the travel package can be determined by analyzing and defining the overall travel
itinerary, in this case, it has been decided that the trip would be for fifty students who would
consider the trip for seven days willing to visit destinations from London to Belgium during their
trip.
Step 2: Making reservations for the transportations, by making bookings for railway seats,
airlines or other coaches
The tour operators should make appropriate reservations for the transportation by analyzing
the total number of people involved in the tour and also the distance of computation based on
the placed which would be visited (Soyk et al., 2017). In this case of the educational tour, the
transportation bookings comprise of the cost of a luxury coach. This includes drivers, tour
managers, taxes and fuel.
Step 3: determining the costs of hotels and meals
The costs of the meals and hotels are needed to be determined by considering the type of hotel
room, the number of people that can be occupied and also the inclusions of meals if any
(Eugenio-Martin and Inchausti-Sintes, 2016). In case of this educational tour, the costs of the
hotels as accounted for £68.12 for per person. This includes standard twin room including
breakfast.
Step 4: making ground arrangements

The other additional costs are also required to be taken into consideration by the tour
operators. In this case, the cost of ground arrangements comprises up of the extra costs
comprising up of visitor attraction charges, travel insurance and holiday money.
Step 5: deciding the final pricing
The overall cost of the package tour needs to be determined after taking into consideration all
the costs (Halpern et al., 2016). In this case, it is evident that the company would add a mark-up
of 25% with the objective of obtaining profits and covering the administration and selling costs.