Tour Operations Management Report: Industry Analysis and Planning

This report delves into the tour operator industry, examining its current trends and developments, such as flexible booking options, independent travelers, destination marketing, technology, sustainable tourism, and niche tourism. It outlines the stages involved in developing holiday packages, from initial market research and itinerary creation to supplier negotiation, cost determination, pricing, and post-tour evaluation. The report evaluates different methods of contracting for holiday components, considering accommodation, travel, guides, and food, and differentiates between sale-only and fixed contract tour operators. It includes a calculation of the selling price for a holiday package. Additionally, the report evaluates planning decisions for brochure design, including color combinations, formatting, content, and paper quality. It then assesses alternatives to traditional brochures and different distribution methods. Finally, it explores strategic and tactical decision-making by tour operators, comparing decisions made by different types of operators and analyzing tactical choices in various situations. The assignment aims to provide a comprehensive overview of the tour operator industry, covering its key aspects and challenges.

Table of Contents
Introduction.................................................................................................................................................2
Task 1..........................................................................................................................................................3
LO1. Understand the tour operators industry within the travel and tourism sector..................................3
P1.1 Analyse the effects of current and recent trends and developments on the tour operators
industry................................................................................................................................................3
Task 2..........................................................................................................................................................5
LO2 Understand stages involved in creating holidays.............................................................................5
P 2.1Assess the stages and timescales involved in developing holidays..............................................5
2.2 Evaluate the suitability of different methods of contracting for different components of the
holiday and different types of tour operator.......................................................................................6
2.3 Calculate the selling price of a holiday from given information.....................................................7
Task 3..........................................................................................................................................................8
3.1 Evaluate the planning decisions taken for the design of a selected brochure...............................8
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...........................................9
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......................10
Task 4........................................................................................................................................................11
LO4 Understand strategic and tactical decision making for tour operators............................................11
4.1 Evaluate the strategic decisions made by different types of tour operator.................................11
4.2 Compare the tactical decisions that could be taken by a selected tour operator in different
situations...........................................................................................................................................12
Conclusion.................................................................................................................................................13
References.................................................................................................................................................14
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Introduction
Today travel and tourism have become a very important sector as it contributes majorly towards
the economical development of country. This assignment also focuses on the various aspects of
the travel and tourism industry. Tour operators provide all the comfort to their customers in order
to make their trip comfortable. But with the changing environment, the requirements of
customers are also changing. Therefore, in order to meet these changing requirements, the tour
operators are required to identify measures. In this assignment, we will also look at the stages
involved in the creation of a holiday package by a tour operator as well as the various strategic
and tactical decisions made by them in order to carry out their activities. We will also identify
the various tactical decisions made by a selected tour operator.
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Task 1
LO1. Understand the tour operators industry within the travel and tourism sector
P1.1 Analyse the effects of current and recent trends and developments on the tour
operators industry.
Travel and tour industry is currently changing at a very high speed due to changing needs and
requirements of tourists. Therefore trends and developments are obvious. The recent trends and
developments in the tour operators industry are as follows:
 Flexible booking Options: Due to modern advancements in technology, people have a
variety of options to book their tickets to various destinations as per their comfort. They have
the options like internet booking, booking through call centers, tele-text etc. This has made
booking not easy but also comparatively cheap and quick. Companies like trail finders also
operate their business through various agencies.
 Independent Travelers: Due to the availability of cheap holidays online, the number of
independent travelers has increased. It does not require the services of tour operators and the
tourist makes his own bookings. Therefore tour operators don’t make money through this.
 Destination Marketing: The traditional tourist marketing has now been replaced by
destination marketing. In order to attract tourists towards particular destination, tour
operators hire various advertising agencies through the use of New Media (Conrady & Buck,
2011).
 Technology: The technology developments have totally changed the way of interaction of
the tour operators with the customers. Today tourists have become prosumer which means
that they want to customize their holidays according to their wish and comfort.
 Sustainable Tourism Development: In the present time, sustainable tourism development is
something that is the objective of almost every tour operator. There are many ways to
achieve this objective. One way to do it relates to the environment which means that the
activities of tourism should not affect the environment. Another way is to preserve the
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cultural heritage of the place. It also aims to provide jobs to the local people and therefore
providing economic benefit to the local government (Mowforth & Munt, 2015).
 Niche Tourism: Rise in the niche tourism is one of the most impressive developments in the
area of tourism today. In present times, tourists don’t just travel in order to take a break from
work and enjoy but they travel for the sake of their passion like doing adventurous activities
like climbing, trekking etc. Niche tourism is constantly in demand and the opportunities are
constantly increasing in this sector. For example: Wildlife Tourism, Golf Tourism, Wine
Tourism etc. (Nibusinessinfo, 2012).
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Task 2
LO2 Understand stages involved in creating holidays
P 2.1Assess the stages and timescales involved in developing holidays.
Development of holidays involves various stages starting from market research to the final
feedback stage. The different stages involved in developing holidays are as follows (Carey,
Gountas, & Gilbert, 1997):
 Initial Research: In order to develop any holiday, first of all the market structure of the
tourist destination should be understood. The knowledge of competitors is also very
important in that region so as to provide the services at the affordable prices.
 Tour Itinerary Creation: After the successful completion of the market research, proper
planning is done as to what to include in the package and then comes the stage of itinerary
booking. It also includes the order in which the various destinations will be visited and with
in what time frame.
 Suppliers and Vendors Negotiation: After booking itinerary, comes the stage of
identification of suppliers and vendors so as to provide necessary services to the students
travelling. After identifying the suppliers and vendors, negotiation needs to be done. These
negotiations are made keeping in terms the quality of services expected from them and the
penalty (Higgins, 1996).
 Determination of Package Cost: The determination of cost of holiday package is the next
stage of holiday development. From the customer’s point of view, it is the most important
stage. Tour operators must know what to include in the holiday package after determining the
cost for every option and after that finalizing the service in the package. The cost includes the
price for accommodation, air-tickets, local arrangements etc.
 Finalizing the price of the package: After determining its cost, tour operators need to
decide the final price of the package for the customers keeping their profit margin included.
The prices of the competitors should also be kept in mind while deciding the price of the
package.
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 Post Tour Evaluation: The customers and tourists are required to provide their feedback
about their experience during the last day of the tour and to suggest for any changes that need
to be made. In this way, they can improve their services.
2.2 Evaluate the suitability of different methods of contracting for different components of
the holiday and different types of tour operator.
A holiday package is made up of various components. These components make the package
complete. The various components of package through which we can make contracts are as
follows:
 Accommodation: Stay facilities are termed as accommodation. As the tour comprises of
students who are travelling from London to various places at Belgium, therefore there is a
need for different contracts with the hotels. The contract should be made keeping in mind
that the tour is for 5 nights and for 42 students at two different locations of Belgium.
 Travelling: This component includes the booking of tickets, pick and drop services and
sightseeing of different destinations. This requires the different contracts with the airline
company, cab companies, etc so as to provide the best possible comfort to the students and
make the trip memorable for them.
 Guide: In order to have the proper knowledge of the place, a guide is very important. In
order to have the knowledge of different places visited during the tour, a guide is required
who will provide the additional information about the different places of Brussels and
Brugge to students.
 Food and Beverages: In order to provide the best food and other eatables during the 5 night
stay of students, various contracts need to be made with different restaurants and other
places.
Different types of tour operators:
Following are the two types of tour operators:
 Sale only contract: this type of tour operators charge for only those services which are
utilized by the students rather than for the whole package thereby reducing the wastage.
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 Fixed Contract: Fixed contract tour operators attract the customers by different offers so
that they can get its benefit and make their bookings. In these type of contracts full payment
is made in advance according to the various offers (Lee, 2015).
2.3 Calculate the selling price of a holiday from given information.
Calculation of the selling price of a holiday involving 42 students to Brugge and Brussels for 5
nights is as follows:
Details Pounds
Cost of accommodation (96 euros per person is
the cost for a twin room which is shared by
two adults)
For 42 students, 21 rooms are booked for 5
nights (42 x 96 x 5 x 0.83)
16732
Cost Of Transportation 11200
Guide cost 945
Total cost 28877
33 % Profit 9529
Selling Price 38406
*Value of 1 Euro is equal to 0.83 Pounds
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Task 3
3.1 Evaluate the planning decisions taken for the design of a selected brochure.
In order to promote its services, Travel companies uses brochures as the promotional tool. It
enables the Kuoni to make its services visible to its target customers. It also helps Kuoni in
attracting more and more customers and make them buy its services. It is considered as a cost
effective tool of marketing as its impact stays in the minds of the customers for long. The
brochures are prepared in the manner so as to attract the target and existing customers as well.
Kuoni became able to attract more and more customers through their attractive brochures. Kuoni
is among the best tour operators in Britain that provides luxury holiday packages all around the
world. Therefore, it is required by the company to prepare an attractive brochure which provides
all the relevant information about the company to the customers. It is also very important in
order to provide the customers with the information about the various offers announced by the
company, the activities included in the package as well as the price for its services (Evans,
Stonehouse, and Campbell, 2012). Therefore, in order to develop the interest of the customer in
it, the brochure needs to be really attractive and influencing. Following decisions should be kept
in mind while designing brochures for Kuoni:
 Color Combination: The selection of color is of great importance while designing the
brochures for any company. The main identity of the brochure comes from the color of the
brochure and the texture of the information which is being used for highlighting. The color of
the brochure should be attractive and good so as to enable the customer to read the
information properly. While designing brochures, feedback about the past brochures of the
company should be kept in mind so as to make improvements.
 Formatting: The brochure becomes more effective, if the management makes sure during
designing it that the brochure is well formatted. The impact of the well formatted brochures
is far more than those which are not formatted. A brochure is said to be systematic if it
provides all the information relating to destination, timing, prices involved and various other
services. It can be made more attractive by adding images to its content.
 Content of Brochure: The management should make careful decisions before deciding on
the final content of the brochure. This is a very important element which provides the
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information bout the company to the customers. A brochure is said to be more effective, if
the language used in it is simple and attractive (Grant, 2016).
 Paper Quality: The paper used for brochure should be of high quality. In case of luxury
packages, the paper used by Kuoni for brochures are glossy and smooth. It adds to the
effectiveness of the brochure.
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.
In the travel and tour industry, there are various different types of tour operators doing their
business. As a result of this, the competition in this industry is really tough. Therefore, in order
to sustain its position in market and to attract the interest of customers towards its services,
different brochures are being used by organizations. In present times, there are various new types
of brochures available in the market designed according to latest trends within the industry in
order to replace the traditional brochures.
In order to offer the information in the most cost effective and time effective manner to
customers, inbound and outbound tour operators can make use of the direct mail brochures. It
will help Kuoni in maintaining its brand image in the market as well as will assist it in its
promotional activities. It will also enable Kuoni to attract more and more customers. As an
alternative to this, inbound and outbound tour operators can make use of online brochures
(Karcher, 2013). The most appropriate and effective brochures for specialized tour operators re
promotional brochures which supports the company in making proper arrangements for specific
tour packages meant for corporate and leisure purposes.
For promotional activities, the tour and travel organizations can also make use of E-brochure.
The e-brochures are more frequently used by domestic and ground tour operators which enable
them to promote their brand name on the national as well as international level. It also helps the
organizations in maintain healthy relationships with other leading tourism organizations so as to
operate their business in the industry in a more effective way. E-brochures are beneficial for both
customers as well as organizations.
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For Kuoni organization, the mail brochures will be an effective alternative to their traditional
brochures as it will help the organization in increasing sales.
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.
The distribution of holiday package and its plan is very important for increasing the sales of the
organization and its profit margin. Kuoni organization has developed so many luxurious plans
for leisure as well as corporate holidays that can be promoted online so as to aware the target
customers of its services. It is a well known fact that marketing of plan is the most crucial part
but if there is no effective distribution of the product, the organization can not achieve its
objective. Therefore in order to achieve this, Kuoni Travels can make use of online tools which
may include its website, its social media links, and mobile apps so as to enable proper
distribution and booking of plans. It also enables the organization to attract more customers
towards its packages. In todays time, people prefer to book their seats online after analyzing all
valuable information related to the package. Therefore, it can be said that for Kuoni Travels,
direct sales method will prove to be beneficial in its operations. It will help them in attracting the
wider range of customers.
Kuoni Travels, can also adopt the email marketing tool so as to sell their packages and services
to the target customers. Apart from email, personal selling can also be fruitful for the
organization for distribution of its services. For example, the management of Kuoni can contact
the business organization to select the plan appropriate for their staff so as to encourage
competition and motivate employees to attain the goals of the organization. It can be a very
beneficial strategy.
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Task 4
LO4 Understand strategic and tactical decision making for tour operators
4.1 Evaluate the strategic decisions made by different types of tour operator.
Various numerous strategies are adopted by different tour operators in order to expand their
business operations all over the world. The strategic decisions are being taken so as to achieve
customer satisfaction, goodwill in the market, increase in profit etc. Strategic decisions also help
the organizations to face the emergency situations in business. Following are the strategic
decisions made by different tour operators:
 Distribution Decision: The decision taken by the organization so as to provide total
satisfaction to customers by fulfilling all committed requirements on time is distribution
decisions. It is very important in order to retain the customer.
 Segmenting, targeting and positioning: In this, the tour operators identify its target
customers so as to develop the holiday package according to their needs. This is the most
important decision and is dependent on the competitors in the market.
 Promotional Strategy: This includes the decisions relating to promotion of the
organization’s services by making use of various tools. It can be considered as the general
base of income generation by company.
 Consumer Relation: The customer relations related decisions are made by providing
relevant services to the customer at the most affordable price. This is also done keeping in
mind customer retention.
 Pricing Strategy: In order to increase the sale, various pricing strategies are adopted by
different tour operators. The pricing is done in accordance with the quality of services
provided by the company. It should be economical (Evans, Stonehouse, and Campbell,
2012).
4.2 Compare the tactical decisions that could be taken by a selected tour operator in
different situations.
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The decisions taken by the tour operators in order to execute its daily activities are termed as
tactical decisions. These help in the implementation of strategic decisions taken by the tour
operators. These are mostly short term . Here we are taking as an example two organizations
namely Thomas Cook and Cox & Kings:
 Pricing Strategy: Thomas Cook is a financially sound organization. Therefore, their pricing
strategy is also economical. They introduce discounts and other additional services in their
products to attract more customers. Customer satisfaction is their main objective. On the
other hand, the pricing strategy used by Thomas Cook is profit-oriented. As its financial
position is not that good therefore the cost of its services are comparatively higher.
 Currency Rates: Being an international tour operator, Thomas cook need to deal with
customers from different nations. Therefore market fluctuations in currency have a great
affect on their business. In order to deal with this situation, Thomas Cook makes use of some
tactical decisions. On the other hand Cox & Kings deal on a national level and offers
packages within a nation. Therefore there is no requirement of tactical decisions in order to
overcome currency fluctuation loss.
 Government Support: Again, being an international tour operator, Thomas Cook has to face
interruption of the government of some countries while planning a tour package there.
Therefore, tactical decisions need to be made by Thomas Cook in order to deal with the
government in a peaceful manner. There are no such issues with Cox & Kings as they
operate on a national level. Instead they take the support of government in promoting their
business (Evans, Stonehouse, and Campbell, 2012).
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Conclusion
In the above report, we have discussed the various aspects related to travel and tourism industry.
We have also discussed the recent and current trends as well as their impact on the development
of travel and tour industry. We have discussed two different types of tour operators in the above
report. The various stages involved in the creation of holiday packages as well as the suitability
of different methods of distribution used by tour operators have been discussed. We have also
compared the various tactical decisions made by two different tour operators.
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References
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