Tour Operations Management Report: TUI and Package Holiday Analysis

This report provides a comprehensive overview of tour operations management. It begins by exploring the tour operating sector, detailing the roles and functions of various tour operators like TUI, and examining the industry's scale and structure, including the impact of integration. The report then delves into the process of creating and costing package holidays, offering step-by-step guides. A review of package tour programs follows, including comparisons, contrasts, and evaluations. Finally, the report analyzes strategic and tactical decision-making in tour operations, using TUI as a case study, and examines external factors affecting these decisions, concluding with a critical examination of current practices.

Tour Operations
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
Exploring the tour operating sector..................................................................................................1
Different roles and functions of a range of tour operators..........................................................1
Scale and structure of tour operating industry............................................................................3
Impact of integration on scale and structure...............................................................................3
PART 2............................................................................................................................................4
The process of creating and costing a package holiday...................................................................4
Step by step guide on 'How to create a package holiday'............................................................4
Step by step guide on 'How to cost a package holiday'...............................................................5
PART 3............................................................................................................................................6
A review of package tour programmes............................................................................................6
Review of a range of package tour programmes.........................................................................6
Comparison and contrast of package tour programmes..............................................................9
Evaluation of a range of package tour programmes..................................................................10
PART 4..........................................................................................................................................10
Strategic and tactical decisions review..........................................................................................10
Explanation with examples of strategic and tactical decision making in tour operations.........10
The external factors which are adversely affecting strategic and tactical of TUI....................11
Critical examination of present strategic and tactical decisions made by tour operators ........12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
For the tour operation management, tour operator plays an important role for creating a
holiday packages and they combines the components of tour and travel. It is mainly related to the
management of operations of travel so that customers can be provided with the better services in
order to meet their requirements. Tour operators plays a most significant role in the
strengthening of travel and tourism industry by getting huge attention of customers through their
attractive packages. For this TUI AG that is an Anglo-German multinational travel and tourism
business which headquartered in Hannover, Germany. In this In this assignment, the roles and
functions of tour operators along with the scale and structure of tour operator business and stages
of creating holiday packages are discussed. In addition, the strategic and tactical decisions are
considered by the tour operators will be studied. Lastly, review about the holiday packages and
programmes so that decisions can be made while taking decisions towards the pricing decisions
of tour packages are also discussed.
PART 1
Exploring the tour operating sector
Different roles and functions of a range of tour operators.
There are several types of tour operators who plays an important role in operating the
different types of functions and tour operations regarding organising tour packages (Dodaro,
2015). Tour operators helps in managing itineraries and arranging accommodation,
transportation, food etc. services so that they can able to formed a complete holiday packages of
individuals or groups. TUI is a tour operating business that plans holidays for their customers
and provide better quality of services so that they can be generated high value for them.
Types of tour operators:
Mass market operators: These type of operator designs holiday packages for the
individuals or group of persons by having the detail knowledge about the tourism business so
that the tours of people can be properly designed at affordable prices. For instance, TUI is a well
known company for creating holiday packages for mass population at the affordable fairs and
with the superior quality of services.
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Incoming operators: These are associated with those operators who make arrangements
for travellers who wants to travel from different locations. Services of these operators are tourist
guides, car rental, sightseeing and so on (Goffi, 2018).
Independent operators: These are that kind of operators who works for organising
packages for people in the individual capacity as well as making arrangements regarding the
accommodation, travelling, food services as well. They are mainly focused on the customers
affordability while making tour packages and satisfy customers.
Outbound operators: They make holiday packages for their customers who want to
travel from one nation to other of their choices as it helps in increasing the promotion of
international tourism.
Domestic operators: These are related to that people who manages tour packages in the
local or national boundaries that means they promotes the local tourism.
Roles of tour operators:
Product development: It is related to the development of products and services as per the
requirements of travellers so that the services which are being offered by company can be
customised according to the customer preferences and budget estimations. TUI develops their
offerings according to the needs of customers so that they can able to provided maximum value
for their customers.
Marketing & sales: TUI markets their services of travelling and packages through the use
of social media, internet, print media for the advertisement of services in order to attract large
number of customers and increase sales.
Advising customers: Tour operators play a role to provide advice to their customers
regarding the prices and suitable locations and budget which will be needed and facilitate detail
information to the customers regarding the tour packages (Manente, 2015).
Travel information: Tour operator is responsible for providing information to their
customers related to the destinations, travelling mediums, itinerary as well as accommodations so
that travellers can happily and safely travel to their wanted destinations.
Operations support: For handling the operations of businesses tour operator plays an
important role which includes hospitality, transportation, accommodation, travel etc. so that they
can assist customers in having the comfortable experience of their travel.
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Scale and structure of tour operating industry.
The scope of travel and tourism industry is rapidly increases so the role of tour operators
is also increasing so that it has been seen that the annual growth of number of tour operators in
UK is 2.3%. whereas, the estimated value of those tour operator industry is approximate £14.9bn
along with the raise in packages which are being purchased by the UK travellers. Total number
of workers in that industry are 29,038 (How is the Industry Trending in the UK?, 2020). There
are several tour operators such as AITO, Thomas Cook etc. that operates within UK. Comparison
between mass market and independent specialist operators are:
TUI company: It is well known as a mass market tour operators that creates tour
packages for the people and provided them at a low cost because of the bulk purchases. The
company has their operating income more than the £297 million and the product range includes
travel agency, passenger transportation, accommodation etc. so that the travel of travellers can be
result in high convenient and comfortableness (Snyman, 2015). The employees of TUI are more
than 70000 and their operations are in around 100 countries. The tourism information board is
termed as an authority which operates the structure of tourism industry.
AITO: It means Association of Independent Tour Operators which is a trade group that
shows 120 specialist & independent tour operators along with the operations in more than 170
nations. AITO agent facilitate specialist offerings to their travellers on the basis of customised
according to their requirements and budget requirements so that the experience of customers can
be increased. Mainly they focused on promoting quality as well as choices by providing
customers a huge variety of choices of their travel destination as well as facilitating them special
services with the expertise, knowledge and experience.
Impact of integration on scale and structure.
As the scale and structure of large mass market and specialist tour operators are governed
by the board of tourism information that ascertain the way in which companies work legally and
ethically. The mass market tour operators supply to the expectations of group of people so that
tour packages can be made at best fairs and provide better quality of services as well. The
specialist tour operators supply to the niche market tours and specialise in the specific
destinations. The integration of specialist and mass market tour operators can assist in raising the
scope of tourism along with the better quality of services to their customers. It will also assist in
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expanding the tourism industries in the UK market that will lead to the development of countries
along with the employment opportunities (Allahyari, 2015).
PART 2
The process of creating and costing a package holiday
Step by step guide on 'How to create a package holiday'.
For creating holiday packages several stages are followed by the company TUI in order
to provide satisfaction to their customers and create high value for them. Such are as follows:
Market research: It is done by the TUI so that the customers expectations of tour
packages can be ascertained with the better understanding of the key aspects that are closely
associated with the tourist market and destinations. This will help in determining the
requirements which are to be satisfied by the tour operators such as tour packages for couples,
students and pilgrimage as all these have different requirements (Khairat, 2017).
Tour itinerary development: It involves the sequences of activities that are organise at a
time of trip which starts from the assembling point and ends to the departure so that a well
systematic and planned travel can be created. This will aid travellers in keeping informed about
the different places which will be visited with the required time.
Contracting suppliers: In this, prices are negotiated with several vendors on the basis of
size and nature of tour such as lodging services, hotel, airlines, car rentals etc. This will ascertain
the entire cost of holiday packages that will be different according to the varied requirements of
customers.
Costing of packages: It is related to the cost of all facilities in which the tour packages
after adding profit margin of company includes (B. DiPietro, 2019). This assist in ascertaining
the entire cost of holiday packages so that travellers can buy them as per their requirements and
affordability.
Brochure production: In this stage, brochures are prepared which assist in marketing
their services and brochures to the target audience. This will aid in making attractive promotion
of services so that the sales of TUI can be raised.
Marketing & sales: Through the marketing strategies as well as advertisements TUI can
attract large number of customers and increase their sales which will help in raising the profits of
company as well.
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Critical path analysis: It includes the determination of time for completing all the
activities with the dependencies on each other which will help in ascertaining the required time
for finishing all the stages successfully so that the better services are provided to the customers.
The timescale of all the above activities are discussed as:
Activities 1 to 10
Day
10 to
14
Day
15 to
30 Day
30 to
38 Day
39 to
52Day
52 to
65 Day
65 to
78 Day
78 to
90 Day
Market research
Capacities
Contracting supplier
and pricing
Brochure production
and marketing with sales
Critical path analysis
Forecasting changes in customer demand
With the emerging market situations the customers preferences are changes over the
period of time which is needed to be traced by the TUI in order to predict customers demands so
that customers needs can be satisfied effectively (Evans, 2016). On the basis of past demand
pattern the future needs are also be forecasted by the analysis of factors. Such are as follows:
1. Economic factors: Emerging economic conditions of a country impacts on the buying
power of customers that impacts on the travel and tourism industry. If economic factors is
strong in nation then people can easily afford tour packages that helps in growing the
businesses of tour operators.
2. Social factors: It is associated with the demographical aspects of nation which includes
age, caste, sex etc. that determine the living of standard and preferences of customers
towards the spend of money on leisure and travel events. These trends are closely related
and in favour of TUI as they followed in order to predict the demand of customers.
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Step by step guide on 'How to cost a package holiday'.
Name of package: Educational tour package
Target customer: Adult students (above the age of 18 years)
Target destination: Students from London, UK to Belgium
Number of targeted students : 50
Inclusions: 7 nights tour in Ghent at Van der Valk Hotel, Nazareth-Ghent.
Price:
Particulars Cost
Luxury coach (includes cost of two drivers, a
tour manager, fuel and ferry taxes) £7,600
Charges of visitors attraction £2500
Cost of local tour guide £860
Total £10960
25% profit margin
Total £13700
Marketing and sales: Marketing of tour packages will be done by the TUI by using the
social media marketing, websites, advertisement on radio, TV as well as using brochures in
colleges and schools.
PART 3
A review of package tour programmes
Review of a range of package tour programmes
In present scenario, package tour and holidays are one of the most important thing which
any of the customers like while travelling to any of the place. Number of activities are required
to be included so that holidays can be enjoyed in a best possible manner. It is necessary for the
business organisation like TUI, to operate those tours and travel for their customers which can be
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comfortable for them and objective of tourist can be attained. It will be important for TUI to
focus more upon those students who are above 18 and mainly likes to visit new place on a
regular basis. They can prepare their programmes related to educational tours (Naji-Azimi,
2018). Traditional brochures: It is one of the effective way for attracting customers for
organisation like TUI. With the help of brochures, they will get the option to make
people aware about the product and services which they are going to offer during the
course tour and travel. Here, brochures can be distributed to public and students by
meeting them at different places such as school, colleges, traffic singles and many more. E-brochures: This are the brochures which are being used mostly as number of people
as well a students who uses social media sites to find out the best deal for completing
their desire. In context of TUI, it will be the brochures which will allow them to reduce
overall cost and time to reach customers on specific time period.
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The brochures which has been designed by TUI is just for the purpose of attracting the
student who are above the age of 18 years. It is also necessary to understand that the prepared
information is contained in three page leaflet which will describe about every single information
which traveller would like to know before visiting to any of the place.
This is the brochures where 4 page leaflet has been prepared. In this respective brochures
all of the detail information has been mentioned. The information which has been prepared is
related with dates selected on different months (Luis, 2017). The main purpose of use this form
of brochures to clarify that company like to deliver the travel experience in group which can be
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much and more entertaining. This brochures is of one of the Australia travel and tour company
which prepare different adventure trip for students about the age group of 18 years.
Comparison and contrast of package tour programmes
There are different business travel and tour organisation but their main motive is to attract
customers who can join their organisation at the time of travelling from one place to another. The
brochures which has been prepared above is helpful to attract the students who like to visit
several place at small age group. It has been found that company is providing the high quality of
accommodation and transportation facility. Their major target is those students who like to have
high comfort during the time of travelling to any of the place. Also, budget required to travel
with this respective organisation are quite high which means the major target is of uppar class
families.
There are number of other organisation who provides similar form of services which has
been mentioned within their brochures which can meet out the requirement of students above the
age group of 18 years. Below, some of the differences has been mentioned in the brochures of
two different organisation and those differences are:
 Talking about the brochures of TUI, it has less informative as compared to the brochers
of other company because they had mainly mentioned about the time duration of
travelling but in case of TUI there major focus was on attracting the customers with
pictures of attractive destinations (Wu, 2016).
 The information which were mentioned within TUI was clear and attractive but on the
other hand of side it was found that less pictures were used due to which interest to
traveller can reduce significantly.
 In present situation brochures can be prepared in number of styles which can be effective.
Similarly, in case of TUI they have adopted two different ways to develop brochures and
they are E-brochures and traditional brochures which means they will get the chances to
attract traveller from different source. But, in case of rivalry firm they only uses
traditional way of brochures which mean chances of attracting students will be very less.
 Not on brochures helps the business organisation, but it has been found that brand image
plays the crucial role in attracting the customers at a greater speed. Similarly, TUI will
have more opportunity to attract people as they have strong base in the market and in case
of rivalry firm they have rear presence in the market.
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Evaluation of a range of package tour programmes
After having the detail analysis on the brochures, it can be clearly said that business
organisation requires to deliver number of additional facilities which can attract tourist. As two
different brochures has been selected but both of them has a common object i.e., to attract more
students for educational trip (Hoyos, 2015). Among two different brochures, it can be easily said
that the brochures which has been prepared by TUI was more attractive as it providing the
information in detail which travellers like to know before travelling to any of the specific place.
Here, TUI was also able to give clear indication that in any of the situation quality and services
will not be compromised but in case of rivalry firm they were not more focused towards their
their respective goals.
In simple words, whenever students would like to take their decision regarding travelling
they will be able to take it easily. Here, high chances will be their through which customers can
be attracted and suitable quality of transportation, accommodation as well as car rentals can be
provided which will be result oriented.
PART 4
Strategic and tactical decisions review
Explanation with examples of strategic and tactical decision making in tour operations
The strategic decision are define as the decision that are linked with surroundings in
which resources and business activities are mage with performance of firm. It is vital for
business organisation as important decision can be made by initiating services and product. As
the decision are occur by establishment of management from which they can examine needs of
people by delivering products to them. In other words, this trade with con-cording capabilities of
resources of company and identify opportunities including threats.
The tactical decision are refer as decision which is occur on regular basis through operators
so that day to day operation can be execute. For example, the TUI has take some decision in
order to promote the performance of their organisation. It involve increment in activities of their
business. Thus, the operator involve some strategic decision by using such feature:
Images of branding and tour operator – This impact customer behaviour which includes
motivate to them so that they can purchase products from TUI organisation. As with this, loyalty
of customers can gained which also effect image of business (Cook, 2016).
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Packages variety – This occur in strategic decision in which TUI operator deliver
packages variety. The different places, regions, features, facilities and regions can attract
customers effectively. As each people have different perspective of their needs and the facility
from organisation deliver according to them.
Decision respect to distribution – The TUI operator establish strategic decision which
help in process of distributing by analysing methods. The main aim of there is to improve
activities of organisation that influence goal of organisation.
Funding – This feature is linked with decision that are linked with decision that are
associated with investment. The management of TUI create decision according to investment so
that business activities can be increased effectively that includes services of tour (Robinson,
2017).
Therefore, decision are enhance by management and operator of tour. This help in
increasing productivity and performance of organisation. In addition to this, TUI management
implement decision by positioning of market. This help in remaining competitive which result in
high performance in market.
The external factors which are adversely affecting strategic and tactical of TUI
Business can grow and develop in the international market by understanding the demand
and preferences of the customers. By this set goals and objectives can be attained easily in the
specified time duration. The strategies are influenced by external factor because organization
need to alter their plans respectively. In order to overcome the issues which are emerged due to
external forces business associates invite staff members in their decision making process so that
best results can be attained. The external factors which are adversely affecting strategic and
tactical of TUI are illustrated as under:
Changing demands of the customers: TUI strategic and tactical are influenced by
changing demand of the customers this is because management need to modify their longer term
goals accordingly. Due to raising globalization the demand for travel and tourism is raising
tremendously (Moutinho, 2018) Customers are more demanding for solo trip and family vacation
in foreign nation. Organization is responding positively towards it and management is framing
solo trip in affordable prices as well as are coming up with innovative product and services. By
this sales ratio of the trip can be raised easily.
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Advancement in technology: Changes in technology can hamper the business overnight.
TUI strategic and tactical are influenced by up-gradation on technology because they business
associates need to makes changes in their set goals and objectives respectively. Modern plant and
machinery cut down the labour cost so firm need to modify their set standards accordingly so
that desire outcomes can be attained in the specified time duration. Business administration is
responding negatively towards it because implementation of modern plant and machinery is
incurring huge capital. This reduced profit maximization ratio which is directly or indirectly
impacting the business growth and development tremendously.
Political factor: Foreign trade policy, trade restrictions, bureaucracy, corruption and
many more are examples of political factor. TUI strategies and tactical are impacted by this
because at the time of expanding the business globally firm need to alter their marketing
strategies as per the political condition of that nation where company is going to expand its
business. Firm is responding positively because in order to remain competitive in the market
manger need to change their strategic and tactical accordingly (Bazargan, 2016)..
Critical examination of present strategic and tactical decisions made by tour operators
Recommendations for improvements:
 More innovation should be done in family and solo trip so that in limited budget best
experience can be given to the customers.
 Advance technology should be used by the travel and tourism industry in order to make
payment mode more easy and safe from hackers.
 Separate research and development team should be build in order to monitor the external
environment activity.
 More short plans should be prepare so that in the dynamic environment they can be
attained easily in less time despite of framing long term plans.
 Organization structure should be made flexible in nature so that changes can be adopted
easily with less resistance from staff members. By this competitive advantages can be
gained against rivalry.
CONCLUSION
From the above it has been concluded that operation of tour management attain an
activity which is require by management to execute. In order to enhance business, it is necessary
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to focus on factors that impact on operation. This help organisation in developing more
profitability. The operator create packages and plan which help organisation to target customers.
This assist in attracting customers more and enhance operation of business. They can also make
plan from which they achieve their business goals. The tactical and strategic decision are create
by management in business. This provide organisation to improve their activities and help in
increment in profitability. There are different role, structure and scale occur of a tour operator
with in tourism industry. As this helps in attracting people towards plan and also assist in
business run appropriately.
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<https://www.ibisworld.com/united-kingdom/market-research-reports/tour-operators-industry/>.
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