Tour Operations Management: Analyzing Trends, Package Development

This report provides a comprehensive analysis of tour operations management, focusing on current and recent trends impacting the industry. It examines how tour operators like Trailfinders and Thomas Cook are adapting to changes such as increased customer expectations, technological advancements, globalization, and integration strategies. The report assesses the stages involved in developing holiday packages, including market research, planning, forecasting, and contracting, emphasizing the importance of efficient development for competitiveness. Different contracting methods, such as fixed contracts and sale-only contracts, are evaluated for their suitability in various components of holiday packages. The report also includes a case study calculating the selling price of a holiday package based on given information. Furthermore, it evaluates the planning decisions for brochure design, highlighting factors like format, legal implications, target customers, and budget considerations, all of which are critical for successful tour package sales. Desklib offers a wealth of resources, including past papers and solved assignments, to aid students in their studies.

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Tour Operations Management

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Contents

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Introduction
The operations management in the tourism industry has significantly changed in the last 20 years
and organisations are focusing more in creating a supply chain of the tourism products and
services which is cost effective, efficient and able to provide the desired results for the
organisation as well as for the customers. Developing the tourism packages involves many
different processes and big tour operators like Thomas Cook and TUI have standardised these
processes. Integration is another change which is concerned with the high growth of the tourism
organisations. Recent changes in the market are included in the tour operations management so
that the tour operator is able to make the tactical decisions. Current report would focus on these
changing trends in the tourism industry and response of the tour operators to these changes using
the example of tour operators like Trailfinders, Thomas Cook etc.

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Task 1
1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry
Leaflet
Expectations of the Tourists

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The expectations of the customers have increased a lot in the recent times because of the tough
competition in the market and efforts of the organisations to provide best possible service to the
customers. Availability of the substitutes is one of the main reasons behind the increased
customer expectations in the tourism industry
Technological Advances
The use of technology in the tourism industry is a major change which has helped the tourism
organisations in improving their services. Tourists can now directly buy the tour packages from
the tour operators without including any travel agent in the process (Buhalis, 2014). Web portals
have brought a great change in the way customers buy holiday packages.
Tailor made holidays are also possible because of the online portals. Customers could pick the
services and create their own customized holiday package through the web portals of the tour
operators.
Integration
Vertical and horizontal integration is game changing factor which is used by the organisations to
expand at a rapid pace. Big tour operators like Thomas Cook and Trailfinders have acquired
many other tourism organisations which provide the similar services through horizontal
integration (Daniels et al, 2018). Similarly, vertical integration has helped the tour operators in
having more control over the supply chain.
Customer Awareness Improvement

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Customers in the 21st century have become more aware of the tourism industry because of the
information contents in the marketing campaigns of the organisations. Their decision making
process is improved.
Globalisation
Technology is the main driving force behind the globalisation of the tourism sector. Tour
operators like Thomas Cook and Trailfinders are expanding their operations beyond the domestic
market and to the international market.
Budget airlines have made it easy for the people to go on international holidays which is a great
change in the tourism market.

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Task 2
2.1 Assess the stages and timescales involved in developing holidays
Development of a holiday package is the process which defines the growth of an organisation. A
standardised process has to be implemented by Trailfinders to make sure that it is able to address
the expectations of the customers while keeping its revenue and profit at a good level. Efficient
development of the holiday package ensures that Trailfinders would be able to compete with
some of the biggest organisations like TUI and Thomas Cook in the international market.
Stages in developing a good holiday package by Trailfinders are described below:
1. Market Research
This is the first stage of developing a holiday package which is adopted by Trailfinders. Market
research is utilised by Trailfinders to identify the trends in the market. Various platforms for
market research are used by Trailfinders to perform market research such as use of customer
feedback, involving market research experts and use of its own Research and Development
department (Fang and Law, 2016).
Market research is conducted by Trailfinders before finalising the tourist destinations - Brussels
and Brugge in its holiday package. An increase of 18% in the people visiting these two
destinations is the main factor behind choosing these destinations.
The target customers for the tour package by Trailfinders are adult college students which makes
Brussels as ideal destination as it has many visitor attractions such as museums that provide
educational information to the students. Similarly, Bruges is declared a World Heritage Site by
UNESCO which has improved the focus of international history students towards the destination.

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2. Planning and Scheduling
In the next stage of developing a holiday package, Trailfinders needs to plan the various services
it would be offering to the customers. Trailfinders assesses the resources of the company
(financial as well as human) and plan the use of these resources in the development and
execution of the holiday package. In case, Trailfinders does not have enough resource, it plans to
arrange the resources using methods such as recruitment and selection of the employees, finding
investors and collaboration with other organisations (Fick and Ritchie, 2016). Once planning
process is complete, the schedule of the tour is developed. Scheduling involves preparing the
itinerary of the holiday, setting up the times for travel and accommodating the timings of the
various events etc.
Trailfinders developed the new holiday package with duration of 5 days. This time of the tour is
then segmented into smaller sections that are allocated to different activities.
3. Forecasting
Forecasting is used by Trailfinders to analyse the market conditions and then predict the demand
and supply in the market. Ability to predict the customers who would be buying the new holiday
package is crucial in the holiday development process. Information analysis is used by the senior
managers at Trailfinders to make informed decisions to handle any future requirement.
Contracting
Trailfinders itself does not own any hotel in Brussels and Brugge and there is not company
owned transportation service at these locations. Hence, Trailfinders needs to contract with the
other organisations such as hotels and local transport providers so that it could provide the

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promised services to its customers. Different contracting strategies such as fixed contract or sale
only contract are adopted by Trailfinders at this stage.
Pricing Strategies
Once planning, scheduling, forecasting and contracting stages of the holiday development
process are completed, Trailfinders would be able to determine the cost of the holiday to the
company. On that cost, a mark-up is set by Trailfinders which is the profit company earns.
Different pricing strategies such as premium pricing or economic pricing are used by Trailfinders
at this stage of the holiday.
2.2 Evaluate the suitability of different methods of contracting for different
components of the holiday and different types of tour operator
As mentioned in the previous section, Trailfinders need to contract with the different service
providers such as accommodation and transport provider, the company needs to choose a
contracting method which would suit its requirement for developing the holiday package. The
contracting method depends on many different factors such as type of service Trailfinders needs
to provide to its customers, quality and price of the holiday package, market trends, economic
conditions etc. (Hassan, 2015). Two most popular contracting methods which Trailfinders could
use in developing its tour package are:
Fixed Contracts
The fixed contracting method is usually adopted by the big tour operators who have established
themselves as a brand in the market and there is a consistent flow of the customers. The loyal
customer base and good forecasting would allow Trailfinders to use this method of contracting.

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In this contract, Trailfinders would go into agreement with a vendor for a specific number of
services at a fixed rate. This contract method does not include the changes in the market price or
any change in the economic conditions. Trailfinders has a proposed group of 40 adult college
students for a trip to Brussels and Brugge. Hence, company would buy 40 seats in an airline from
UK to Brussels / Brugge. Similarly, the company would reserve the accommodation for 40
students in the hotel Grand Casselbergh in Bruges. In case, there are less student than the
expected count of 40, Trailfinders would still have to pay for 40 students as per the fixed
contracting method to the Grand Casselbergh and Airline.
However, Fixed Contracting Method protects Trailfinders against any inflation as price for the
service is already fixed, it might result in a huge loss for the company if it is not able to sell its
tour package to 40 students.
Sale Only Contracts
Similar to the Fixed Contracting Method, the price is negotiated and a final cost is agreed
between the tour operator and vendor for a specific time period. But, numbers of seats in the
airline of number of rooms in the hotel are not fixed in the contract. In this method of
contracting, the vendor service is availed as per the sales of the tour package (Gountas, 2015). If
only 30 students buy the holiday package offered by Trailfinders, the company would only pay
for 30 seats in airline and 30 beds in the hotel. In this method of contracting, price is usually
higher than the Fixed Contracting Method.
2.3 Calculate the selling price of a holiday from given information

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Case Study Trailfinders Holiday package
A special rate for your group has been proposed by Grand Casselbergh in Bruges of 90 euros per
person for a twin room (2 adults sharing) with breakfast. The price 45-seater luxury coach is
£7,400 and that includes two drivers, a tour manager, fuel and all road and ferry taxes. The cost
of a local tour guide is €920 for the duration of the tour. Your company adds a mark-up of 30%.
The spot exchange rate is €1.15 per £1.
Cost of hotel stay per night = €90
Applying the exchange rate, cost of stay = £78.25
Net cost of stay for the entire group for 5 nights = £78.25 X 5 X 40 = =£15651
Net cost of the Coach for the entire group = £7,400
Charges by tour guide = £920
Adding the accommodation cost, coach price and tour guide = £ 23,971
Mark-up = 33% of £ 23,971 = £ 7910.43
Hence, the selling price of the holiday = £ 23,971 + 7910.43 = £ 31881 approximately
The selling price of the holiday per student = £ 31881 / 40 = £ 797.03 approximately

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Task 3
3.1 Evaluate the planning decisions taken for the design of the brochure
Brochure design sometimes becomes a factor that could decide the sales of a tour package.
Hence, it is essential for a tour operator that proper planning is done while designing the
brochure. Market research, response of the customers towards certain type of brochure and
quality of information are some main decisions that need to be taken carefully by Trailfinders
management while designing the brochure. The important planning decisions which could be
very important for the success of the tour package are:
Format of the Brochure
Brochures are designed in different formats where specific design elements are the content of the
brochure, structure of the content, inclusion of the relevant images, style of the brochure, size of
the brochure and quality of the paper used in brochure development (Mariani et al, 2014). All
these elements are directly connected with the budget of the company it has set for the brochure.
Legal Implications
There are certain legal considerations which are very important in the brochure development.
Tour operators have to use original and authentic content without any false information in the
brochure. Copyright regulations also need to be followed when an image or content owned by
someone else is used in the brochure.
Target Customers
The potential customers for the tour package also define the style of the brochure to be used in
the marketing. For example, hard copies of the brochures (paper based brochures) are suitable for