Tour Operations Management Report: Recent Developments and Analysis

This report provides a comprehensive analysis of tour operations management within the UK tourism industry, focusing on the practices of Thomas Cook. It examines recent developments in the sector, including the impact of e-commerce, increased spending power, niche tourism segments, customized tour packages, and the expansion of the cruise market. The report details the stages and timescales involved in developing holiday packages, including market research, negotiations, and marketing strategies, using a South Africa and Bahamas tour as a case study. It evaluates the suitability of destinations and attractions, considering both fixed contract and sales-only contract methods. Furthermore, the report explores emerging trends in tour operations, such as the growth of cruise tourism and the use of technology, while also differentiating between tactical and strategic decisions. The report also addresses the negative impacts of tourism, such as environmental concerns and cybercrime.

Tour Operations
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 The recent developments in tourism industry .......................................................................3
TASK 2............................................................................................................................................4
2.1Determining the stages and timescales involved in developing holidays...............................4
2.2 Evaluating the suitability, destinations and attractions involved in developing holiday
packages.......................................................................................................................................5
2.3 Cost of components and package and determining the selling price.....................................7
TASK 3............................................................................................................................................8
3.1&3.2 designing and planning a brochure and various methods of communication................8
3.3 Non traditional ways of selling tour packages.....................................................................10
TASK 4..........................................................................................................................................11
4.1 Emerging trends in the tour operations sector.....................................................................11
4.2 Difference between tactical and strategic decisions............................................................12
CONCLUSION..............................................................................................................................12
REFFERENCES............................................................................................................................14
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INTRODUCTION
Tourism industry is one of the fastest growing industry in the economy of UK. The tour
operations management refers to administration of tour and travel components to develop a
holiday plan for different customers. It is the function of tour operator to manage tour operations
and combine different services like transportation, accommodation etc. to provide a complete
package to customers (Meredith and Mantel, 2011). The main aim of tour operations
management is to minimize the cost for the customers by being a component of the whole supply
chain in hospitality industry. The present report studies various aspects of tour and operations
management. It further highlights the recent developments in the tour operations industry. In
order to facilitate the study, Thomas Cook has been selected. It is renowned company providing
travel and tourism services to more than 22 million customers. Thomas Cook was founded in
1841 with the mission of providing unique experience and leisure travel services to customers.
TASK 1
1.1 The recent developments in tourism industry
According to the recent study tourism sector is major source of economic booster. It has
been identified the standard growth rate of 4% in tourism sector. This states the continuous
growth in this sector will lead to fruitful outcomes for nation (Lennon, 2003). The recent
development in the travel and tourism industry from year 2000 to 2015 has been explained as
follows:
 Technological development in E-commerce: The recent development in tourism
industry relies majorly on the development of new E- commerce technology. Nowadays
customer can use online medium to find suitable travel service. Thereafter, the customers
can compare use online booking services to book transportation. It has also facilitated
easy reservation and cancellations of transportation facility. Therefore, the development
of E- commerce has lead to the addition in tourist visits to UK every year (Giaoutzi and
Nijkamp, 2013).
 Increase in spending power: With the increase in disposable income the spending
capacity of people have increased. From 2008 – 2015 the bank rate is lowest; 0.5% due to
which there is more money in the economy. This further improved the disposable income
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of the UK. This has further resulted in the growth of tourism industry. Therefore, the
increased spending power of customers have also increased the opportunities for different
individuals and organizations working in tourism sector of UK. Thereafter, the local
people who are living in the tourist destination are also getting benefit from the
expenditure incurred by customer in this tourist location.
 Niche segment of tourism: There are ample number of niche market segments that
combine to form tourism sector (Salmerón and Apte, 2010). Therefore, there are different
opportunities in various niche segment. For instance, at present the newly wedding
couples are main focused tourist sectors for the tourism service providers. The reason
being they are giving a greater possibility for development along with the larger
expenditure on the travel services (Simpson, Power and Samson, 2007).
 Customized tour packages: The tour operators provide customized holiday packages to
customers where they can choose the tour package according to their choice. This further
enhance the customer satisfaction level as they enjoy decision making authority.
 Expansion of cruise market: The major recent development in tourism development is
regarding development of cruise industry. The cruise industry is contributing large
number of tourist to UK. Further, UK is emerging as one of the biggest cruise market
with annual growth rate of more than 6.55%. in past 15 years; 1990-2015. Therefore,
more than thousands of ships are build every year that provide unique and leisure travel
experience to tourist (Growth in cruise market). One can experience local food, local
customs, traditions and art in cruise ship. Therefore, it is major contributor of tourism in
not only UK also around the world, this can be explained through graph which is
displayed below.
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Thereafter, the recent trends have lead to the development of new tourist destinations
like, Mongolia, Montenegro, Konkoda track, Luang Prabang and Stockholm etc. The natural
beauty and rich cultural values of these places is also a reason of increased tourist attraction
(Boyer and Verma, 2009). The major reason of holidaying is to spend from leisure time from
stressed work life. The millennials take holiday for getting some adventure experience while
newly married couples take holidays for spending quality time together.
However, the recent developments are also causing negative impact on the overall
economy of the nation. The increasing use of cruise ship are causing water pollution as oil spills
are discharged in water. Further, the waste in cruise ship are released directly into marine water.
In addition to this, it is also impacting the local tourism as cruise provide the entire experience of
leisure tourism because of which tourist does not feel like going out to visit local destinations
(Berkoune, and et.al., 2012). Further due to use of e- commerce sites for tourism, the internet
frauds are also increasing. There are many cyber criminals who make fake tourist sites and
provide fake tour packages and convince customers to make online payments. With this, they
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Illustration 1: Growth in passengers due to cruise market
(Source: Growth in cruise market)

steal the banking information of customer, do advance payment scams etc. Page jacking is also a
cyber crime by which some parts of travel agency sites like Expedia etc, are stolen and
customers are redirected to fake website.
TASK 2
2.1Determining the stages and time scales involved in developing holidays
In the present section of the research specific holiday plan for heritage destination has
been developed by Thomas cook which a renowned travel agency that provide travel services to
its customers (Tour Operators, 2014). The company has designed a adventure tour for youths of
fifteen days in South Africa and walking tour in Kamalame Cay, the Bahamas. Therefore, in
order to develop an successful tour and increase the satisfaction level of customers it is important
for company to do proper planning. However, it is important for travel agency to devote proper
time to develop best suited plan for prospective customer. Therefore, it can take up to six
months’ time as developing a holiday package for South Africa is very tough and time involving.
In addition to this aspect, it will involve various complexities like, variations in currency and
change in tax structure, managing transportation and accommodation for guests (Simpson, Power
and Samson, 2007). The different stages involved in designing the holiday package are as
follows:
 Studying the new destination: There is significant need for the travel agency to study
the new destinations so that best services can be provided to customer. It involve an
examination of overall external environment. It is the main function of tour designing and
involves at least two months (Morrison, 2013).
 Research: It is important to conduct proper research of selected destination. The research
will help in knowing the weather conditions, political conditions etc. The research will be
focussed on finding the different types of heritage places, wildlife parks etc. Like wise,
best beaches for holidaying in tropical destination will be researched. The whole process
will involve at least three months times (Berkoune, and et.al., 2012).
 Negotiations: In order to provide affordable tour package it is important to negotiate
with local service providers of host country. Therefore, different providers that give
quality services at minimum cost should be selected. This process again involves one
month time.
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 Capacity: The tour package is developed according to the payment capacity of tourist.
The budget of tourist is considered first, before making the tour plan and according to it
services are added. For instance, if the budget of customer is low than low budget hotels
will be provided, air tickets will be booked in economic class etc.
 Planning: The tour package is planned considering the above mentioned factors. The
best destinations that can be covered within the provided budget are selected (Simpson,
Power and Samson, 2007). In order to ensure cost effective tour plan more bargaining is
done with local service provider. Further, planning is done for providing maximum
benefits and covering maximum tourist place within the paying capacity of prospective
customer.
 Marketing: The planned tour package is marketed on online portals and other offline
modes like, travel books, magazine etc. to attract the target customers. This helps
company in reaching at right customers and increase the sales of business (Tour
Operators, 2014).
 Administration: Thomas cook allocate resources to ensure its competence to provide
services as per the plan. Therefore, it assure it have adequate resources like, availability
of economic class seats in airline, buses and other local transport to visit tourist
destinations etc.
2.2 Evaluating the suitability, destinations and attractions involved in developing holiday
packages
There are various methods that are used by travel agency to book the holiday packages
developed by the organization for. The customer can either used fixed contract or only for sale
contract to book the tour package developed for customers. In fixed contract the accommodation,
transportation and other services are booked in advance by travel agent. This type of booking are
advantageous for customers, hospitality organizations like, hotels, air buses or airlines and
especially to Thomas Cook as it generate more profits in off season too (Morrison, 2013).
However, the sales only contract, the tour is designed after considering the needs, preferences
and budget of customer. It is more cost effective as it minimizes the unnecessary expenditure on
unwanted facilities. In addition to this, it reduces the issues related to over booking and under
booking of air tickets, accommodation, transport etc. therefore, the both contract methods can
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be selected as per their suitability. Such as, in off seasons, only for sales contract can be used
while peak season fixed contract can be used. The customer can use online mediums to select
the travel agency. Here, the customer has chosen Thomas Cook which will provide travel
service. The next step involves selection of places they want to visit in their travel destination
that will also provide unique experience. Furthermore, the tour operator will play a major role in
deciding the destination and develop best suited plan for tourists with attractive schedules
(Simpson, Power and Samson, 2007). South Africa is tourist attraction and provides great
contribution to travel and tourism industry. It is an inland safari destination which also offers
various heritage destinations, concerning natural and beautiful places. The rich heritage culture
of South Africa is a reason for attraction of ample number of customers on a regular basis. The
availability of proper transport facility also provide great assistance to customers.
Furthermore, there are large number of destinations like, Kruger National Park covered
with shrub lands, Western Cape surrounded by lush wine lands and attractive wild beaches of
Stellenbosch etc. The beaches present in the country add more laurels in the beauty of South
Africa. The main aim of tourism department of country is to ensure the development of
environment friendly and cultural tourism that will also help in preserving the heritage and
cultural values of country (Font and et.al., 2008). The best tourist destination are Kruger National
Park, which have different species of mammals, Table Mountain, Amphitheater and Durban
beaches etc. In addition to this, the tourists are provided wide range of accommodation facility
from luxury lodges, villas, boutique hotels and fine resorts. The Cape Wine lands is enclosed by
majestic mountains, vineyards and lush sceneries (Berkoune, and et.al., 2012). Thereafter, the
tourists are given best holiday packages at best price that attract people to visit country again.
Therefore, attractive holiday package for fifteen days can be designed with an effective schedule
of the tourist places to visit.
Day 1-2 Kruger National Park
Day 2-3 Table Mountain
Day 3-4Amphitheater, Drakensberg
Day 5 Durban Beaches
Day 6- 7Knysna
Day 7Victoria and Alfred Waterfront
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Day 8Cape Winelands
Day 8- 9Blyde River Canyon
Day 9-10Hluhluwe- Umfolozi Game Reserve
Day 10- 11Sun City Resort
Day 12- Resting day in resort
Day 13- Shopping in local markets
Day 14- 15- Travelling back to UK
Thereafter, following is the tour package that will be offered to the customer:
Tour Services Cost (£)
Hotel Beach View, 7 Night 1000
Continental Breakfast 100
Thomas Cook Airline Tickets 500
Transportation service;Airline services 150
Lunch and Dinner 250
Total cost of Holiday Package for South
Africa
2000
Further, by considering the cost of tour package; 2000 £ the tour operator can determine
its selling price. Therefore it can add % of margin it wants to earn on cost and determine the
selling price of tour package . For instance, it want earn 15% margin s its peak season therefore it
can adopt price skimming strategy by charging more price. In addition to this aspect, it can
provide tour in 2300 £. Here, 300 £ will be the selling price of tour package for Thomas Cook.
2.3 Cost of components and package and determining the selling price
The determination of cost of tour package is not an easy task as the travel agency have to
ascertain the gross total cost of tour along with the consideration on profit margin and
commission. In addition to this, the fringe benefits that will be provided to customer are also
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included. Thereafter, the expenses on traveling, accommodation and food are also kept in mind
while framing the pricing of holiday package (Zhang and et.al., 2009).
The cost component involve costing related services like, cost of reserving flight,
booking cost at different destinations, service other tax that will be paid to government, cost of
booking lodge etc. Thereafter, it also involves the amount that will be incurred on food and
beverages of customers.
Furthermore, the selling prices are charged as per the tour package chosen by the
customer (Berkoune, and et.al., 2012). However, it also depends on the seasonal variations and
competitions. Prices are generally high in peak seasons and completive selling price can be used
as per the competition. The tour operator can also adapt price skimming method for providing
luxury accommodation and travel service.
Hence, it is required for tour operator to consider all the expenses while deciding the
price of package. Computing the cost of tour package of South Africa, the package begins with
£3,900 per head which can be altered with the change in package and number of days.
Thereafter, it will involve the cost of food and beverages, entrance fees of different parks and
travel and internal flights. Further, by computing the overall cost of 15 days to South Africa, it
will involve £50 per person per night for accommodation in hotel. Thereafter, the internal flight
tickets will be costing £2000. The extra expenditure that will be incurred in visiting different
places will cost £1150 per individual approximately.
Activity Cost
Flight ticket (including return) £2000 per person
Visit to different destinations £ 1150 per person
Accommodation per night for 15 days £50 per person
Total 2000+1150+ 50*15 = £ 3900
TASK 3
3.1&3.2 designing and planning a brochure and various methods of communication
The tour operator can use various attractive tools to induce customers like digital
marketing, advertising on television and travel magazine. Marketing on social networking sites
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can be used to attract more and more customers (Heriot, and et.al., 2008). Thereafter, travel
agents can be used to distribute tour packages. Further, designing the tour package is an
important decision which must be taken after proper planning on various aspects. The cost
consideration of designing brochure should be considered; the cost of designing one brochure
would be £2.2. Thereafter, the decision is to be made about the quantity of brochure that should
be designed (Salmerón and Apte, 2010). For instance, the company can place a order of 500
brochures that will be distributed to target consumers. The time scale should also be considered
for production of brochure; 1 month will be required. Thereafter, the decision should be made for
finalizing the locations where brochures will be distributed (Morrison, 2013). However, the
travel agent can distribute brochures where major number of customers are concentrated.
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3.1 & 3.2
Knysna Port
The Knysna Garden Route is considered as one of the most
popular tourist place in South Africa. However, it is generally
though to strethc from Mossel Bay to St Francis along with the
Indian ocean and also consist of some part of the Inland.
However, it is located between lush forests and the shores of
peaceful lagoon. Tourist are always attracted about its outdoor
adventure along with the authentic dining and shopping
venues.
It is considered as one of the second largest canyon in
Africa along with the Fish River Canyon. Blyde River
Canyon is quit greener because of lush subtropical foliage.
Furthermore, there are several magnificent escarpments,
waterfalls and ancient geological phenomenon. The tourist
are attracted towards this place is because of its all five
Primates available. Along with this, Hippos and Crocodiles
around the wetlands of Swadini Dam.
Blyde River Canyon
Durban Beaches
They are most beautiful beaches of South Africa, surrounded
by golden sand. Here, the visitors can enjoy water sports, and
have relaxing time. There are different restaurants which
provide food and beverages on beach.
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