Comprehensive Analysis of Tour Operations Management Strategies

This report provides a comprehensive analysis of tour operations management, focusing on the effects of current trends and developments in the tour operator industry. It assesses the stages and time scales involved in developing holidays and evaluates the suitability of different contracting methods for various components and tour operator types, including a calculation of holiday selling prices. The report also evaluates planning decisions for brochure design and assesses alternatives, recommending the most appropriate options. Furthermore, it evaluates different distribution methods for selling holidays and examines strategic and tactical decisions made by different tour operators in various situations. The document is available on Desklib, a platform offering study tools and solved assignments for students.

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Table of Contents
INTRODUCTION..........................................................................................................................2
TASK 1.........................................................................................................................................3
1.1 ANALYSE THE EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON
THE TOUR OPERATORS INDUSTRY.........................................................................................3
TASK 2.........................................................................................................................................5
2.1 ASSESS THE STAGES AND TIME SCALES INVOLVED IN DEVELOPING HOLIDAYS..............5
2.2 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF CONTRACTING FOR
DIFFERENT COMPONENTS OF THE TOUR HOLIDAY AND DIFFERENT TYPES OF TOUR
OPERATOR..............................................................................................................................8
2.3 CALCULATE THE SELLING PRICE OF A HOLIDAY.............................................................10
TASK 3.......................................................................................................................................11
3.1 EVALUATE THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A SELECTED
BROCHURE...........................................................................................................................11
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..........................................................................................................13
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 YOUR TOUR PACKAGE...........................................................................15
TASK 4.......................................................................................................................................17
4.1 EVALUATE THE STRATEGIC DECISIONS MADE BY DIFFERENT TYPES OF TOUR
OPERATOR............................................................................................................................17
4.2 COMPARE THE TACTICAL DECISIONS THAT COULD BE TAKEN BY A SELECTED TOUR
OPERATOR IN DIFFERENT SITUATIONS................................................................................18
CONCLUSIONS..........................................................................................................................19
REFERENCES.............................................................................................................................20
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INTRODUCTION
The travel experiences of a person can be made an astonishing experience by the role
played by the tour operators in managing the operations of the tour. The duty and
responsibility of tour operators are management of the various components and elements
so as to avoid any kind of mismanagement in the vacations of the individual. Having tour
operators is advantageous for the travellers and tourists who plan and organize the touring
packages for them (Robinson, et al. 2016). Tour management companies have to manage
the activities of the tours by customising the holiday packages on the basis of preferences,
budgets and interests of the customers by adding and subtracting the available options.
Tour operator coordinates and cooperates with the tour managers in another country so as
to ease the activities to be carried out in planning the packages for the customers.
The aim of the assignment is to depict the operations management of the tour operators.
The impact of present trends in the tourism industry has also influenced the operations of
the tour operator which is explained in the assignment. It also represents the stages
required to develop the tour packages for the customers by contracting with different
intermediaries such as suppliers and also identify the selling prices for the tours (Shyju and
Lama, 2015). Various methods of distribution are also included to market the holiday
packages as well as designing of the brochure is explained. It also helps in understanding the
strategic as well as tactical decision to be made by the tour management companies.
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TASK 1
1.1 ANALYSE THE EFFECTS OF CURRENT AND RECENT TRENDS AND
DEVELOPMENTS ON THE TOUR OPERATORS INDUSTRY
INTRODUCTION
Tour operators play a very important role in developing the tour package while
considering the budget as well as arranging various facilities such as transport
management, lodgings, and other amenities such as tour guides, meals, optional tours
and flights (Mowforth and Munt, 2015). The aim of the Trailfinders Ltd is to offer the
attractive package with efficient services to its customers. The goal of the company is
the stay ahead of the expectation of the customers.
Fig 1 bookings
[Source: https://abta.com/assets/uploads/general/Holiday_Habits_Report_2017.pdf]
As seen from the chart, about 83 per cent of the bookings were made through online
whereas about 17 per cent of the customers visited in store to book the holiday
package. 16 per cent of the people booked holiday package over the phone and for 9
per cent people someone else had made the bookings.
CURRENT TRENDS IN THE DEVELOPMENT OF TOUR OPERATION INDUSTRY
With the change in the business market, the tour operation industry has also faced
some positive and negative impact of trends in the tourism industry (Mariani, et al.
2014). The Brexit has impacted the tourism industry as due to Brexit referendum of
2016, the UK faced both the economic and political changes that affected the tourism
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industry. The trends that have made the positive and negative impacts are given
below:
Technological development: progress in the industry has been beneficial for every
organization. It has positively impacted the business organizations by providing better
option to book or reserve the holiday package through both online and offline mode
(Henderson, 2017). The technology is interrelated with marketing which offered
endless opportunities to the tour operators to reach out and communicate with the
potential customers and also positively affects the customer relationship.
Increased safety measures: this has a somewhat negative impact on the tourism
industry as different hazards situations such as human trafficking, assaults, terrorist
attacks and robberies have negatively impacted the business of the tourism industry
(Mowforth and Munt, 2015). This resulted in enhancement in the safety measures and
also aims to protect the tourists by undertaking various measures to discourage the
incidents at hotels, restaurants and various other tourist sites. Majority of tourists
want wants its holiday package to be ATOL protected which protects the customers at
the time of booking tickets to ensure not to get trapped or go out of pocket.
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TASK 2
2.1 ASSESS THE STAGES AND TIME SCALES INVOLVED IN DEVELOPING
HOLIDAYS
Tour operator such as Trailfinders Ltd searches and analyses al the elements while creating a
tour package for its customer which basically include 12 steps (Henderson, 2017). The
following are the 12 steps that help in creating an effective plan so as to increase the level of
customer satisfaction:
CONDUCT MARKET RESEARCH: this is the first phase where the tour operator such a
Trailfinders Ltd carries out a study regarding the tourist destinations as well as tourism
market. The aim of the Trailfinders Ltd is to exclusively conduct research to identify and
include education sites in Belgium.
TOUR ITINERARY DEVELOPMENT: in the second phase planning and scheduling for tour
holiday package it did. Proper planning and scheduling are to be done by the Trailfinders by
considering the flexibility in operations for successful completion of the educational tours
for five days.
INTERMEDIARIES’ CONSULTATIONS: after the planning and scheduling, Trailfinders Ltd have
to finalised the contracts with the intermediaries such as vendors and suppliers by
negotiating for the activities such as bookings for airlines, ground operators, renting cars,
seeing the sights, transport operators with an aim to get satisfactory quality at a reasonable
price (Paquin, et al. 2016).
PACKAGE TOUR COSTING: it is essential for the company like Trailfinders Ltd to prepare the
cost sheet for the holiday tour package in order to calculate the price value of holiday tour
package by including the cost of air travel, payroll, local guides, supplements, marketing
cost, research cost etc.
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PRICING AND FINANCIAL EVALUATION: once the package tour cost is determined the next
task for Trailfinders is to calculate the projected selling price by adding a profit margin to the
cost of tour packages. It also needs to evaluate the financial risks such as inflation rates,
exchange rates, the rate of return, price competition, share in market etc (Piekarz, et al.
2015).
STAFF ADMINISTRATION: the tour operator should also analyse the needs of personnel in
peak seasons in order to deal with the consistent requirement of the tour operators as well
as customers. Recruitment for reservation staff, international agents, resort staff, local
guides, marketing agents, representatives to sales and much more is to be done by the tour
operator such as Trailfinders Ltd.
TOUR PACKAGE PROMOTION: all the elements of the travel industry such as by
encompassing the airlines, hotels and other transport operators are combined together to
form a tour package that is affordable and standardized. It is imperative for tour operators
to adopt a systematic and structured marketing plan for tour packages to create the image
required to achieve volume sales.
DEVELOPMENT OF MARKETING PLAN FOR TOUR: the marketing plan of the tour has
organizational objectives to get a clear understanding of the desires and wants to be
achieved through it (Arnall and Kothari, 2015). Ascertaining the budget is the prime stage in
developing a marketing plan for the tour. It is generally a short-term plan with an aim of
getting the clear direction of the tour marketing operations by adopting a systematic
approach to plan and take actions.
MARKETING OF INBOUND AND OUTBOUND TRIPS: It is easier to develop marketing for the
domestic tour as compared to the marketing for an international tour. There are differences
in getting contracts for inbound tours as compared to outbound tours (Morgaine, et al.
2015). The services are provided by the inbound tour operators or ground operators by
providing the service that is prescribed in the tour programs in outbound tours.
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BROCHURES OF TOUR OPERATORS: one of the crucial marketing tools of tour operators is
the tour brochure that contains all the detailed information which aims to induce the
travellers or vacationers to buy the tourist products or services (Liu and Morales, 2014).
TOUR OPERATION AND IMPLEMENTATION: It is very important for a tour operator to
develop a tour manual for the tour manager as well as tour escorts and tour guides to have
a clear understanding of the management and operations of the tour. This tour manual
comprises the daily duties, policies and guidelines to be followed while operating with
vendors and other tour participants and also manage the emergencies.
POST TOUR MANAGEMENT: several reports are prepared to be evaluated to identify the
success of the tour. This report helps in identifying the real issues or potential problems so
as to improve the tour planning for next tour package (Chen, 2016). Overall opinions of the
tour members are to be determined by calculating the mean average of each evaluation
response.
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2.2 EVALUATE THE SUITABILITY OF DIFFERENT METHODS OF
CONTRACTING FOR DIFFERENT COMPONENTS OF THE TOUR HOLIDAY AND
DIFFERENT TYPES OF TOUR OPERATOR
COMPONENTS OF TOUR HOLIDAY
Different methods of the contracting are to be evaluated to identify its suitability with the
various components of the tour holiday:
HOTELS (ACCOMMODATION): hotels components consists of accommodation as well as
catering in which the travellers are provided with the facilities of providing accommodation
in hotels, camps, apartments, guesthouses etc. the contracting methods can be used is the
fixed contract which is to be managed by the Trailfinders as it is a cost-effective contract by
providing huge discounts but it contains high risk due to non-usage of the services
(Akoumianakis, 2014). It also needs to take care of catering services by including a huge
cafeteria, fast food outlets and other forms of Galleria. For example, middle class
vacationers will prefer the arrangement of accommodation in small, medium hotels or may
be in guesthouses or lodges as compare to high-class vacationers who will prefer either
apartments or star rated hotels.
TRANSPORT: transport providers are the airlines, car rentals, cruise lines and rail companies
which are to be selected by taking into consideration the budget, time, convenience or
purpose of the tour as proposed by the tourists (Arnall and Kothari, 2015). The existence of
the tourism industry is based on the transportation. Trailfinders Ltd should have fixed
contract with the airlines and other travel providers. As it has a huge scope of discounts but
it comprises the high-risk factor of non-usage.
VISITOR ATTRACTIONS: visitor attractions include the theme park, gallery, museum,
heritage building and educational centres which is the main purpose of any travellers in
getting tour packages (Akoumianakis, 2014). Tour operators such as Trailfinders need to
make contracts such as seasonal contracts with these tourist attractions. Fascinating the
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travellers to these locations result in the generation of revenues, also generate employment
facilities, building infrastructures, thus thereby increasing the earnings in foreign exchanges
by providing its contribution to the economy.
TYPES OF TOUR OPERATORS:
INBOUND TOUR OPERATORS: inbound tour operators are the ones who provide the
products and services according to the needs and wants of the customers such as foreign
tourists who visit our country. They are the host representatives for the foreign tourists and
market their packages directly or through intermediaries by making their valuable
contribution in earning foreign exchanges for the economy of the host country (Piekarz, et
al. 2015). Fixed contracts are to be made with the inbound tourists that include the
discounts for the services such as accommodation, transport, sightseeing etc.
OUTBOUND TOUR OPERATORS: outbound tour operators are efficient enough in providing
the services to its people while visiting other nations for specified and pre-determined time
period. All the arrangements starting from getting a visa to various other services
throughout the travel is done by them. These operators make contracts with inbound tour
operators or ground operators for providing the services to the travellers in their tours.
DOMESTIC TOUR OPERATORS: this type of tour operators manages their operations within
the boundaries of the country by promoting the beauty, diversity in culture and traditions of
the country among its citizens (Paquin, et al. 2016). They make contracts with local ground
operators to create the holiday package of their choice for the customers by tapping
enormous potential tourist market.
GROUND OPERATORS: Destination management companies in the UK are considered as
ground operators who have the responsibility to make land arrangements at a specific
destination site (Robinson, et al. 2016). Big tour operators make contracts with these
ground operators by dealing in the supplies such as hotels, car rentals, transport vendors
etc. invaluable services are provided by the ground operators for the successful and efficient
operations of big tour operators.
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2.3 CALCULATE THE SELLING PRICE OF A HOLIDAY
Trailfinders aim to calculate the selling price of an educational tour for the 42 adult students
and also 2 drivers and 1 tour managers from London, the UK to Brussels and Brugge,
Belgium in July 2019 is as given below:
Exchange rate of the room for 1 person (€1.12= £1) = 96€ / 1.12€
Exchange rate of the room for 1 person = £85.71 (as assumed cost of room for 1 day)
Particulars Cost For 45 members
(including 42 students,
2 drivers and 1 tour
manager) for 5 days
(£)
Cost per person (£)
Hotel Cost £85.71 per person twin
sharing
(45*85.71*5)
19,284.75
(85.71*5)
428.55
Luxury Coach Cost - 11,200 248.89
Local Tour Guide Cost - 945 21
Total Tour Cost - 31,429.75 698.44
Margin of Profit
(33%)
- 10,371.82 230.49
Actual Selling Price - 41,801.57 928.93
Therefore the cost of tour package for 45 members (including 42 students, 2 drivers and 1
tour manager) = £31,429.75
Profit margin for tour (33 Per cent) = 10,371.82 and for 1 person = £230.49
The actual selling prices of the tour package = £41,801.57 and selling price per person =
£928.93
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TASK 3
3.1 EVALUATE THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A
SELECTED BROCHURE
It is very important for the tour operators to advertise or promote the holiday packages in
an effective manner (Veal, 2017). The brochure is one of the best marketing tools utilised by
tour operators to promote their holiday package by representing all the information about
the organisation as well as about holiday packages.
Comparing the brochures of the two companies that are Trailfinders and Holidaybreak Ltd,
the various aspects of the brochures are considered:
FORMATTING AND STRUCTURING: formatting a brochure means describing all the
information related to the company and holiday package in a very systematic manner
(Vainikka, 2015). The formatting of the brochure of the Trailfinders is in z-fold whereas the
format of the brochure of Holidaybreak Ltd is in Tri-fold. The structure of the Brochure of
Trailfinders is very well-framed and all the information regarding the packages,
accommodation, and contact details are presents whereas the brochure of Holidaybreak
includes images of sites with famous destinations in each page.
STYLE AND SIZE: the style and size of the paper should be in such a way that it attracts the
customers by providing all the relevant information required for the holiday packages. The
size and style of the brochure of Trailfinders are very effective as compared to that of
Holidaybreak Ltd.
COLOUR: selecting appropriate colour is also important in designing the brochure by
considering the end users and recent trends in the market (Vainikka, 2015). The colours
selected by the Trailfinders where according to the summer trends in developing the design
for the brochure. The colours selected by the Holidaybreak Ltd are asymmetrical with that
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of Trailfinders Ltd. Bright and vibrant colours are used by Trailfinders which is very attractive
and simple which makes it more fascinating.
PAPER QUALITY: the brand image is set through the paper quality used in designing the
brochure (Huertas Garcia, et al. 2014)‐ . Trailfinders uses high quality of paper in designing
the brochure in order to ensure the positive image to be created by the people.
Holidaybreak Ltd needs to improve the quality of its paper to be given a brochure to its
customers.
CONTENT: this is the most important aspect of the brochure which influences the customers
(Morgaine, et al. 2015). The brochure of Trailfinders includes all the detailed information
regarding the offers in the package and also the tourist attractions covered by the tour
operators along with the contact details and map to get the deals from the customers to
increase sales or profits effectively. The brochure of Holidaybreak includes the details of the
destinations along with additional freebies to attract the customers.
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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
The advancement in the technology has resulted in limited use of traditional brochure by
the tour operators; the companies like Trailfinders have focused on adopting different
alternatives on marketing their products and services. The alternative methods are:
CD: the information and details of the tourist destinations are recorded in the CD in an
attractive and efficient manner and these CDs are distributed among the customers. The
customers take a look at the content of the CD and make decisions accordingly (Huertas‐
Garcia, et al. 2014). It is very helpful as it provides the comprehensive information about the
tour package along with the images of sites, hotels, and other attractive locations with
contact numbers of all the present branches of the tour operators.
VIDEO: advertisements and promotions can be made through the uploading videos on social
networking sites such Instagram, Twitter, YouTube, Facebook etc. These videos can be
shared through the websites of the tour operators such as Trailfinders so as to persuade to
watch and select the tour package.
INTERNET: internet includes medium such as e-brochure, and social media, along with the
mobile application to advertise and promote the information regarding the tour package of
the tour operators such as Trailfinders for educational tours.
INTRANET: intranet is one of the systems developed from the internet which is commonly
used by the companies as their private networks. This is accessed by the employee of the
company by using a special password (Liu and Morales, 2014). It allows the staff of the
company to make travel arrangements by using the laptops with its expanded form that is
extranet.
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TELEVISION: it allows the opportunity for the travellers to access information while
purchasing the services for travelling purpose (Piekarz, et al. 2015). This is the most
common alternative to advertise the information about the tour package to attract a large
number of customers.
Therefore, through observation, it can be said that television and internet are the
appropriate medium for promoting tour packages by Trailfinders Ltd.
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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 YOUR TOUR
PACKAGE
Tour operator uses various tools and methods of distribution in the current scenario in
order to advertise the offers that are the tour packages to the target customers segment in
the market. Evaluating the methods of distributions:
DIRECT SELL: direct sale is one of the cost-effective and traditional distribution methods in
which the targeted customers are influenced by face-to-face communication (Fountoulaki,
et al. 2015). Though this method is less effective, customers do not have an inclination
towards listening to the entire information regarding the plan.
AGENCIES: agencies are available offline as well as online (Veal, 2017). Offline agencies
contact with the potential customer to sell the tour packages however the travel agencies
running online allow the customers to select the appropriate package according to their
needs from different tour packages by clicking on them.
CALL CENTRES: these call centres contact the customers by asking them their requirements
for visiting a location and thus providing a tailor-made offer according to the needs and
requirements of the customers (Fountoulaki, et al. 2015). These call centres help in creating
a database of the people who are interested in visiting the tourist sites by accepting the
offers of tour operators such as Trailfinders Ltd.
INTERNET: in today’s hi-tech world, tour operators are using the internet as the most
effective distribution networks in distributing the holiday package to be availed by a large
number of people (Fountoulaki, et al. 2015). The Internet gives enormous platforms such as
email, mobile applications, company website and social networking sites such as Facebook,
Twitter, LinkedIn, Instagram etc.
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TELETEXT: Teletext is information services used to transmit the essential information to the
appropriate customers through different mediums such as televisions and mobile
applications, digital banners and hoardings etc.
TELEPHONE: telephone is another effective medium to advertise the holiday package among
the target customers. It is been slowly replaced by the mobile due to less utilization of
telephone services (Veal, 2017). The advantage is that the feedback of the customers is
received at the time of advertising.
Thus it can be seen that appropriate methods of distribution are the internet and agencies
which can be used by the Trailfinders to promote their educational package to adult
students.
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TASK 4
4.1 EVALUATE THE STRATEGIC DECISIONS MADE BY DIFFERENT TYPES OF
TOUR OPERATOR
Tour operators such as Trailfinders are needed to take various strategic decisions which are
needed to be evaluated below:
PRICING STRATEGIES: it is very important for the tours operators such as Trailfinders to
determine the prices of the holiday package and also considering the offers and discounts to
the potential customers (Abrate and Viglia, 2016).
SURCHARGE POLICY: proper guidelines and techniques should be included in the surcharge
policy by tour management companies such as Trailfinders so as to have clarity on the
additional amount to be added to the fees charged by them.
IMAGE BRANDING AND POSITIONING: the strategic decision to position the tour operator
as a unique brand by delivering the quality services to satisfy the desires and wants of the
customer in their budget by having greater control and also capture a large amount of share
in the market (Chen, 2016).
CHOICE OF PRODUCTS: various researches are conducted by the tour operators such as
Trailfinders so as to analyse the large portfolio of the customers in determining and
analysing the product to satisfy the preference and desires of the customers.
DISTRIBUTION DECISIONS: tour operators needed to take a strategic decision on selecting
apt distribution methods for the supply chain by entering into the contracts with the
intermediaries such as suppliers and vendors to target a specific market (Uusitalo, 2015).
TRANSPORTATION MODES: the strategic decision comprises the suitable transportation
modes such as airlines, cruises, roadways or rail transport. For example, cruise and airlines
are apt for foreign visitors for multinational tours and rail or roadways for domestic tours.
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4.2 COMPARE THE TACTICAL DECISIONS THAT COULD BE TAKEN BY A
SELECTED TOUR OPERATOR IN DIFFERENT SITUATIONS
Different tactical decisions are to be taken by the tour operators such as Trailfinders Ltd on
a daily or regular basis so as to increase the profits as well as the customer base for the
company (Abrate and Viglia, 2016). The tactical decisions are given:
COMPETITION: it is very important for the tour operators to select the liberal policies as
well as better advertising approaches or techniques and marinating the service quality to
keep the sustainability of company for long-term (Della Corte and Aria, 2016). The
competition is very high due to existing competitors and new entrants, careful and suitable
decision is to be made by Trailfinders.
PRICE WARS: high competition in the tourism industry has led to substantial decrease in the
prices thus creating a prices war which is impractical for the long-term survival of the
organization. Taking a tactical decision in maintaining the pricing strategies may enhance
the performance of Trailfinders. Effective management helps in creating proper and
effective strategies to resolve the issue of excessive competition and other external factors
(Knight and Cottrell, 2016).
UTILISATION OF COACH AND AIRCRAFT SEATS: These tactical decisions are taken by the
tour operators Trailfinders Ltd by providing the unique and popular coach or aircraft facility
to its clients in order to create services benchmark for the clients.
TACTICAL MARKETING: effective tools and techniques are to be used for marketing
activities and campaigns by regularly monitoring and reviewing them according to the
changing scenarios in the market.
MAXIMISE OCCUPANCY OF CONTRACTED BEDS: the tour operators such as Trailfinders Ltd
have contracts with the hotels, it is essential for the tour operators to increase the
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occupancy of beds in these hotels in order to grow or progress (Knight and Cottrell, 2016). It
helps in increasing profits and customer base along with gaining competitive advantage.
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CONCLUSIONS
Thus it is concluded that the tour operator plays a very important role in managing the trips
and tours of the travellers. The present trends have high impacted the tourism industry.
Proper planning and scheduling are required for the successful arrangements of the tours
operators (Medlik, 2016). Selling prices are also calculated to find the prices of tours and
also for a person. The goodwill of the tour operator can be increased by providing
satisfactory services to the customers ultimately leading to growth and progress in the
business. Appropriate decision such as strategic as well as tactical leads to increase in the
business in terms of profit and customer base.
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