Tour Operations Management: Analyzing Recent Trends & Developments

This report provides a detailed analysis of the tour operations management industry, focusing on recent trends and developments. It examines the impact of changing tourist demographics, technological advancements, vertical and horizontal integration, and responsible tourism. The report also discusses the role of trade bodies like ABTA and AITO in the UK. Prepared from the perspective of a product development worker at Trailfinders Ltd., the report assesses the stages and timescales involved in developing holiday packages, including destination exploration, seller arbitration, and brochure creation. Strategic decision-making for effective tour operations management is also explored. Desklib offers a platform for students to access this assignment and other study resources.

Tour Operations Management
1

Table of Contents
Introduction......................................................................................................................................3
Task 1:.............................................................................................................................................4
Task 2:.............................................................................................................................................8
Task 3:...........................................................................................................................................11
Task 4:...........................................................................................................................................15
Conclusion.....................................................................................................................................19
Reference list.................................................................................................................................20
2

Introduction
With the advancement of time, the industry of travel and tourism has gained huge success and
has become an important source for generating revenue in every economy around the globe. Due
to the increasing demand of travel and tourism products and services, the industry of tour
operators has also improved. The tour operators industry has also become popular in the present
world of business. This report has been prepared on the tour operators industry and will provide
an understanding of the industry in detail.
The report has been prepared with reference Trailfinders Ltd. The Trailfinders Ltd. is a company
based in Ireland and UK, which deals with travel and tourism services and is the biggest travel
company in UK that is independently owned. All the discussions made in this report are prepared
by assuming the role played by a worker of the product development department of Trailfinders
Ltd. It discusses about the stages involved in the creation of holiday packages for customers, the
methods and brochures for distribution that will help in selling holidays as well as the strategic
decision-making required for an effective tour operations management. It will also discuss about
the recent trends in the industry.
3

Task 1:
P 1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry.
There has been a huge progress in the tour operators industry since the first packaged tours after
the World War II (Cetin and Yarcan, 2017). However, it is necessary for tour operators to be in
line with the recent trends and developments in tourism. The expectations, behavior and attitudes
of tourists have resulted into the development of a wide range of new trends and most of them
have crucial impacts over the tour operators industry. As per the definition of the EU Package
Travel Directive, a tour operator is a travel agent that specializes on package holidays (Peters,
2017). One of the current trends in the tour operations industry is the emergence of various types
of tour operators who provide a wide range of specialized package holidays to tourists. The
different types of tour operators presently operating within the sector of travel and tourism are as
follows -
 Outbound operators - The outbound operators in the tour operators industry are the ones
who create tours and packages for allowing tourists of one country to visit another
country conveniently and usually work with tourists interested in international tours (Dai
et al., 2017).
 Domestic operators - Unlike outbound operators, the domestic operators in the tour
operations industry operate within the boundaries of a country only (Holland and Leslie,
2017). They do not provide international tour packages and are limited to the domestic
tour packages only.
 Specialist operators - The specialist operators of the tour operators industry are the ones
who offer a wide range of tour packages including family holidays, hiking, cycling,
special wildlife watching, safaris, sailing, cross country skiing, etc. both at a domestic
and international level (Buckley and Mossaz, 2016). In the present scenario, specialist
operators have become increasingly common all over the globe.
The organization Trailfinders Ltd. has to become a specialist, outbound as well as domestic
operator in order to cope up with the recent developments and trends within the tour operators
industry. In addition to tour operators, the tour operators industry also has certain recent trends
4

and developments. The following are the factors of recent trends and developments and their
effects over the tour operations industry -
 Changing face of tourists - In the recent times, the face of tourists are changing (Lozano
et al., 2016). This means that the types of tourists are changing with time. In the present
scenario, most tourists are mature travelers, individual travelers or independent travelers.
Travelers have also started coming from minority groups such as Asian-Americans,
African-Americans and Hispanics. Due to this reason, the needs and demands of travelers
are changing, thereby making it difficult for tour operators to deal with them.
 Technological advances - Technological advances is another factor that affects the tour
operators industry (Gretzel et al., 2015). Due to technological advancement, the
availability of shared information, tailor made holidays and availability of resources have
increased. Travelers are now focused on dynamic packaging on the internet. Mobile apps,
electronic payments, knowledge-based web pages, the online trip advisors, etc. are other
technological advances that are having huge impacts on the tour operators industry.
 Vertical and horizontal integration - Both horizontal and vertical integration have an
impact on the tour operators industry (Baerenholdt et al., 2017). While vertical
integration involves the merger of two businesses at different stages, horizontal
integration is the merger of business at the same stage. Such mergers are increasing in the
tour operators industry day by day, thereby making it difficult for the tour operations
industry to cope up with these.
 Responsible tourism - Responsible tourism can be referred to as the type of tourism in
which the hoteliers, the local people, the government, the tourists as well as the tour
operations have to take action in a way such that tourism is more sustainable in nature
(Caruana et al., 2014). This is another current trend with the industry of tour operators
industry and has an impact over the activities of every tour operator.
The organization Trailfinders Ltd. is also influenced by the recent trends and developments
mentioned above. Each factor affects the company in different ways, which in turn makes it
important for the company to take necessary measures that will help the company in coping up
with these trends and reducing their respective impacts on the company. However, apart from the
5

trends and developments mentioned above there are various trade bodies, which also have an
effect on the tour operators industry and the companies working in it.
In UK, trade bodies such as the ABTA (Association of British Travel Agents), the AITO
(Association of Independent Tour Operators), the UK inbound and the CAA (UK Civil Aviation
Authority) are the ones that influence the operations of tour operating companies such as the
Trailfinders Ltd. For example, the ABTA provides different schemes of financial protection,
provides guidance related to issues of wellbeing and feasibility, offers tour operators with
itinerary of redness in case mishap occurs and helps customers getting fair deals (Jenkinson and
Felton, 2018). On the contrary, the AITO ensures sustainable tourism is conducted in UK, tour
operators have accurate websites, and brochures, monitors standards, ensure fair customer
relations, etc. (Dodds and Joppe, 2017). In this way, each trade body has an effect on tour
operators in UK, such as Trailfinders Ltd.
6

One of the current trends in the tour operations
industry is the emergence of various types of
tour operators who provide a wide range of
specialized package holidays to tourists. The
different types of tour operators presently
operating within the sector of travel and tourism
are as follows -
Outbound operators - The outbound operators
in the tour operators industry are the ones who
create tours and packages for allowing tourists of
one country to visit another country
conveniently and usually work with tourists
interested in international tours (Dai et al.,
2017).
Domestic operators - Unlike outbound
operators, the domestic operators in the tour
operations industry operate within the
boundaries of a country only (Holland and
Leslie, 2017). They do not provide international
tour packages and are limited to the domestic
tour packages only.
Specialist operators - The specialist operators
of the tour operators industry are the ones who
offer a wide range of tour packages including
family holidays, hiking, cycling, special wildlife
watching, safaris, sailing, cross country skiing,
etc. both at a domestic and international level
(Buckley and Mossaz, 2016). In the present
scenario, specialist operators have become
increasingly common all over the globe.
In addition to tour operators, the tour operators industry also has certain
recent trends and developments. The following are the factors of recent
trends and developments and their effects over the tour operations
industry -
Changing face of tourists - In the recent times, the face of tourists are
changing (Lozano et al., 2016). This means that the types of tourists are
changing with time. In the present scenario, most tourists are mature
travelers, individual travelers or independent travelers. Travelers have
also started coming from minority groups such as Asian-Americans,
African-Americans and Hispanics. Due to this reason, the needs and
demands of travelers are changing, thereby making it difficult for tour
operators to deal with them.
Technological advances - Technological advances is another factor
that affects the tour operators industry (Gretzel et al., 2015). Due to
technological advancement, the availability of shared information,
tailor made holidays and availability of resources have increased.
Travelers are now focused on dynamic packaging on the internet.
Mobile apps, electronic payments, knowledge-based web pages, the
online trip advisors, etc. are other technological advances that are
having huge impacts on the tour operators industry.
Vertical and horizontal integration - Both horizontal and vertical
integration have an impact on the tour operators industry (Baerenholdt
et al., 2017). While vertical integration involves the merger of two
businesses at different stages, horizontal integration is the merger of
business at the same stage. Such mergers are increasing in the tour
operators industry day by day, thereby making it difficult for the tour
operations industry to cope up with these.
Responsible tourism - Responsible tourism can be referred to as the
type of tourism in which the hoteliers, the local people, the
government, the tourists as well as the tour operations have to take
action in a way such that tourism is more sustainable in nature
(Caruana et al., 2014). This is another current trend with the industry of
tour operators industry and has an impact over the activities of every
tour operator.
However, apart from the trends and developments mentioned above
there are various trade bodies, which also have an effect on the tour
operators industry and the companies working in it.
In UK, trade bodies such as the ABTA (Association of British Travel
Agents), the AITO (Association of Independent Tour Operators), the
UK inbound and the CAA (UK Civil Aviation Authority) are the ones
that influence the operations of tour operating companies such as the
Trailfinders Ltd. For example, the ABTA provides different schemes of
financial protection, provides guidance related to issues of wellbeing
and feasibility, offers tour operators with itinerary of redness in case
mishap occurs and helps customers getting fair deals (Jenkinson and
Felton, 2018). On the contrary, the AITO ensures sustainable tourism is
conducted in UK, tour operators have accurate websites, and brochures,
monitors standards, ensure fair customer relations, etc. (Dodds and
Joppe, 2017). In this way, each trade body has an effect on tour
operators in UK, such as Trailfinders Ltd.
Effects of current and recent trends and developments on the tour operators industry
7

Task 2:
P 2.1 Assess the stages and timescales involved in developing holidays
For effective planning on holiday, timescale need to be developed. This planning will provide
better utilization of entire holidays. On the other hand, development of time scale is effective for
between time management during holiday. In order to create this holiday, following time scales
need to be processed. Tour operator, in ‘Trailfinder’ has to develop the market plan based on this
time scale.
Exploration of destination
In the first stage, exploration as well as analysis is required for developing the holiday plan. Tour
operating organization has to decide various destinations within countries. Market research need
to be conducted for understanding external factors in regards to destination image. Analysis is
also required to understand the transportation cost and visa charges.
Arbitration
After exploring the destination through market research, tour operators have to arbitrate different
sellers. This arbitration need to be done through communicating with transportation operators,
ground operators, accommodation companies and other important sellers. Tour operators have to
get in touch with the other service providers, who can provide better service to students at the
destination country (Dodds and Joppe, 2017). This task requires huge time for convincing all the
sellers to provide least expensive holiday packages
Financial estimation of the tour package
After accomplishing the above two objectives, estimation is the third stage. This estimation is
related with the financial statement. In this stage, operator will create the budget for delivering
the holiday package. Trailfinder Plc arranges this estimation through specifying the
accommodation charges, travelling facilities and other additional charges. After proper
estimation, the package can be delivered.
Promotion of tour package
8

This stage will improve the tour plan in a better way. Promotion of tour package is
required for understanding the consumers’ attention to this structured plan.
Main activities 1-2 weeks 3-4 weeks 5-6 weeks
Exploring new destination 
Arbitration  
Estimation of the entire tourpackage 
Promotion of tour package 
P 2.2 Evaluate the suitability of different methods of contracting for different components
of the holiday and different types of tour operator
Trailfinder has to recognize the suitable handling process for improving the overall managing
style of the tour operator. It is required to maintain higher profit along with consumer
satisfaction. In this scale, various methods need to be applied for getting more profit.
Allocation: The operator has to allocate the overall investment as per the previous tour
experience. This experience is related with the market process as well as opportunities (Peters,
2017). In this case, operator has to give confirmation to visitors about the available
arrangements. Therefore, allocation is required to understand the room capacity as well as other
facilities.
Contract Fixing:
Tour operators have to commit the guesthouses and hotels for 42 persons in each group.
Therefore, contract need to be signed for taking some advance money from the clients. This
money is required for booking purpose.
Inbound operators
9

In the holiday package, operator has also need to provide special service like currency exchange,
entertainment and other local amusement activities. Operators will deal with the customer
directly for such services.
P 2.3 Calculate the selling price of a holiday from given information
As per the given information, in the present scenario, Trailfinders Ltd. is aiming to create a
luxury educational and coach tour for students above the age group of 18 years from London to
Brugge and Brussels in Belgium. The number of students in the tour will be 42 and the tour will
be for 5 nights. As per the given information, the following are the costs of Trailfinders Ltd. for
the tour planned for the students -
The spot rate of exchange = 1.12 Euros for 1 pound
Accommodation costs at Grand Casselbergh for twin room along with breakfast - 92 Euros per
person
Charges of visitor attraction - 52 Euros per person
Cost of local tour guide = 1020 Euros = 1020 / 42 = 24.2857 Euros per person
Price of luxury coach with drivers, tour manager, fuel, ferry and road taxes = 7350 pound * 1.12
= 8232 Euros / 42 = 196 Euros per person
Administration cost (mark up) = 25%
According to the given costs, the selling price of the holiday for each will be as follows -
Total cost of the trip (for each person) = 196 + 92 + 52 + 24.2857 = 364.2857 Euros
Therefore, selling price of the trip = 364.2857 + 25% = 364.2857 + 121.6964 = 485.98 Euros or
433.91 pound
10

Task 3:
P 3.1 Evaluate the planning decisions taken for the design of a selected brochure
In order to attract the consumers and make its business more functionable, Trailfinders need
promote themselves in the market. They should ensure the fact that the products and services
offered by the company are highlighted and reached out to the consumers. Brochures remain as
one of the most commonly used tool for promotion of the products or services of the company.
In order to create an appropriate brochure, the travel and tourism based company needs to keep
its focus on certain aspects. They are:
Development of an appropriate theme
For any sort of promotional campaigns, the companies need to create a theme. They need to
ensure that the brochure comprises of a single or series of messages. Based on these messages,
the brochure needs to be created and highlighted. The theme should be the most crucial
component of the brochure and in turn, the promotional campaigns.
Think of the reason why the brochure is created
This is the most basic yet the most crucial factor to think about before designing the brochure.
The company needs to ensure that they know as to why they are creating the brochure. By
figuring it out, the company can create the brochure in the optimum manner.
Designing the brochure appropriately
It has to be noted that the designers of the brochure need to do so in the most creative manner.
They must ensure the fact that the brochure comprises of attractive designs alongside creative
copywriting. By doing so, it becomes possible for the company like Trailfinders to successfully
highlight its products to the consumers.
P 3.2 Assess the suitability of alternatives to a traditional brochure for different types of
tour operator
11

While the brochure is a good option for Trailfinders to promote its business, the company if it
wants to may even resort to other forms of promotional media in order to promote its business
and its products or services. The most optimum forms of promotions are as follows:
E-mail marketing
This form of marketing has become highly popular today. Trailfinders may opt to send
personalized e-mails and messages to its consumers to promote and sell their products.
Creation of website
Websites have become so important today that if a company does not comprise of a website, it is
not considered genuine (Karimi et al., 2016). Trailfinders need to implement their own website
and promote its products and service over there.
Scope of Social Media
Social Media is such a platform where people create, share and modify content. Today, almost
all the companies need to promote their businesses in social media since most of the people
today are highly active on social media sites such as Facebook, Instagram and Twitter (Jussila et
al., 2014).
P 3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for
different types of tour operator
Before reaching out to the end consumers, the products or services of a company pass through
various channels. In the case of Trailfinders, it is the same too. Before reaching out to the target
audience, the company’s products and offerings need to go through various steps. The
Distribution process forms an integral component of the marketing mix of a company (Law et
al., 2015). An enhanced channel of distribution ensures the fact that the products or services of
an organization is reached out to its target audience.
For Trailfinders, the company needs to ensure that the channel of distribution they employ must
be the one, which is most cost efficient. However, in the process of making the distribution
channels cost effective, the company cannot afford to compromise on the efficiency factor. The
efficiency of the distributional channels is directly proportional to the market share the
12