Tour Operator Management: Industry Analysis and Decision Making

This report provides a comprehensive overview of tour operator management within the travel and tourism sector. It examines the effects of current trends on the industry, details the stages involved in creating holiday packages (including market research, cost assessment, staffing, negotiation, and evaluation), and discusses various methods of contracting. The report also reviews brochure design and alternative distribution methods, comparing strategic and tactical decisions made by tour operators in different situations. A case study involving the calculation of a holiday's selling price is also presented, illustrating practical application of pricing strategies. This document is available on Desklib, a platform offering study tools and resources for students.

TOUR OPERATOR MANAGEMENT

Table of Contents
INTRODUCTION................................................................................................................................2
TASK 1 UNDERSTAND THE TOUR OPERATORS INDUSTRY WITHIN THE TRAVEL AND TOURISM
SECTOR.............................................................................................................................................3
1.1 EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON THE TOUR
OPERATOR INDUSTRY..................................................................................................................3
TASK 2- UNDERSTAND STAGES INVOLVED IN CREATING HOLIDAYS...............................................4
2.1 STAGES AND TIMESCALE IN THE DEVELOPMENT OF HOLIDAY PACKAGES-..........................4
2.2 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.....................................................................8
TASK 3- BE ABLE TO REVIEW BROCHURES AND METHODS OF DISTRIBUTION USED TO SELL
HOLIDAYS.........................................................................................................................................9
3.1 THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A SELECTED BROCHURE................9
3.2 SUITABILITY OF ALTERNATIVES TO A TRADITIONAL BROCHURES FOR DIFFERENT TYPES OF
TOUR OPERATOR.......................................................................................................................11
3.3 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...............................................................................................................12
TASK 4- UNDERSTAND STRATEGIC AND TACTICAL DECISION MAKING FOR TOUR OPERATORS. .13
4.1 THE STRATEGIC DECISIONS MADE BY DIFFERENT TYPES OF TOUR OPERATOR..................13
4.2 COMPARE THE TACTICAL DECISIONS THAT COULD BE TAKEN BY A SELECTED TOUR
OPERATOR IN DIFFERENT SITUATIONS......................................................................................15
CONCLUSION.................................................................................................................................16
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INTRODUCTION
Tour operation management business administration is the significant aspect of the travel and
tourism industry that manages the tourist destination and helps the general people to visit
these places accordingly. Tour operators are responsible to develop the tour packages for the
people and they integrate with other companies in order to provide satisfactory services and
goods to the people. In this assignment, different aspects of the travel industry and the current
trends effects will describe. Further, different significant stages for the development of holiday
package will describe in which the time frame is the most important key area. The suitability of
diverse contracting methods will also describe and after this significance of brochure and its
promotional strategy will explain that plays a viable role in order to attract the customers. In
the end, tactical and strategic decisions comparison study will cover the area.
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TASK 1 UNDERSTAND THE TOUR OPERATORS INDUSTRY WITHIN THE
TRAVEL AND TOURISM SECTOR
1.1 EFFECTS OF CURRENT AND RECENT TRENDS AND DEVELOPMENTS ON THE
TOUR OPERATOR INDUSTRY
LEAFLET:
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TASK 2- UNDERSTAND STAGES INVOLVED IN CREATING HOLIDAYS
2.1 STAGES AND TIMESCALE IN THE DEVELOPMENT OF HOLIDAY PACKAGES-
The travel and tourism sector is one of the most comprehensive industries that also contribute
their large part in the economy of the country and enhances the profitability rate as well. As
there are several tour operators who are responsible to provide services and goods to the
visitors and also develops the holiday packages for them so that they can easily make their
plans and take the advantages in a single price or package accordingly.
Following stages are to be considered in order to develop the holiday packages such as-
Market research: in order to identify the needs and demands of the people according to trends,
it is important to research the marketplace. With the proper analysis of the market, the
organization can easily make the decisions and it is also helpful to determine the influencing
factors as well (Lacej and Kalaj, 2015).
Assessment of cost: after deciding the tour package and researching the market, the second
step is the assessment of cost in which the pricing strategy of the services and goods would be
finalized in order to attract the customers. The tour operator makes several strategies and
approaches and in the starting phase, they fixed the costing of a tour package and then make
the decisions accordingly.
Staffing and management: the customer satisfaction is the key aspect of any business
administration and in order to provide services and the facilities to the people, the proper
management of staff members must be acquired. As the tourism industry also provides the
opportunity for employment, so that the general people can easily take the benefit and helps in
the enhancement of profitability as well.
Negotiation strategy: the tour operators collaborated with other companies towards enhancing
the effectiveness and profitability rate as well. Many other service sectors are integrated with
the tour management industry in order to provide the services and gods to the customers at
single package such as accommodation, food, transport etc. so the tour operators initially
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negotiated with them towards giving the discounts and other attractive offers as well (Glover,
et al. 2016).
Evaluation and Analysis: in the last step, after the development of the plans and tour packages;
the most important factor is to analyses the plans in order to check the quality and ensuring the
stability as well.
The timescale framework is figured out with the help of Gantt chart and it will take at least 6
months to implement-
TIMESCALE 1-2 MONTHS 2-3 MONTHS 3-4 MONTHS 4-5 MONTHS 5-6 MONTHS
MARKET
RESEARCH
ASSESSMENT
OF COST
STAFFING AND
MANAGEMEN
T
NEGOTIATION
STRATEGY
EVALUATION
AND ANALYSIS
Figure: Gantt chart
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2.2 SUITABILITY OF DIFFERENT METHODS OF CONTRACTING FOR DIFFERENT
COMPONENTS OF THE HOLIDAY AND DIFFERENT TYPES OF TOUR OPERATOR
Tour holiday packages are referred as the brochure and leaflet types in which the entire
information and the details of destination place are described in an effective manner, which
attracts the customers easily and they can also make their plans accordingly. The brochure
must be effective and attractive in order to gain the high attention of the people and helps
them to provide the required services and the goods that can satisfy their needs and demands
as well.
The pricing strategies are the cost base methodology that sets the standards and deciding the
pricing of the goods and services accordingly (Page, 2014). the tour operators make the pricing
strategy for the customers by adding different costing and mark up value by which they can also
gain the profit and enhances the effectiveness accordingly.
Different contracting methods are described below that is utilized by the tour operators such
as-
Fixed cost pricing strategy: in this strategy, the tour operators fixed the cost of tour packages
and in which each and every required facilities or service are included so that the people can
easily take the benefit of it and make their holiday plans accordingly. In the fixed cost pricing
strategy, the selling price of the tour package has been established by adding the markup cost
variable that helps to generate the revenue and make the profit for the organization as well.
Sales only contract: this is the pricing contract in which the tour operators decide the price
according to the season or the destination place. The pricing based on the sales contract is
comparatively high. As there are majorly two kinds of the season for visiting such as offseason
and the other is peak season. In the off-season, the pricing is relatively low while in peak
season, when the demand of customer is high, so the tour operator also sells their tour
packages on high price accordingly (Holland and Leslie, 2018).
These both the contracting methods are usually utilized by the tour operators in order to
develop the tour holiday package and providing the services and goods accordingly. as fixed
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cost service is the most efficient and best method for selling the tour package comparative to
sales only contract methodology.
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2.3 CALCULATE THE SELLING PRICE OF A HOLIDAY
The Grand Cassel Bergh in Burges proposed a new strategy and develops the tour package of
summer vacation 2019 for the students for 5 nights. The total numbers of students are 42 and
the price of one room is euro 96 of one room in which two people can stay that also includes
breakfast. The luxury bus service charge is £ 11,200 that includes the overall charges of two
skilled drivers, managers, taxes and the fuel or ferry taxes accordingly. local guide fees are
around of £ 945 for the entire tour and by adding the 33 percent markup, the exchange rate is
about 1 euro is equal to 0.89 pounds.
COST CALCULATION TOTAL AMOUNT
Single room price including
breakfast
96*42*5 € 20,160.00
Total variable cost € 20,160.00
1 euro = 0.89 pounds
Variable cost in pounds 20,160.00*0.89 £ 17942.40
Cost of bus service £ 11200.00
Cost of guide service £ 945.00
Total cost of the tour package = £ 30,087.40
Adding 33 percent mark-up = 9928.84
Total price = £ 40,016.24
Total students = 42
Per head pricing = £ 952.76
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TASK 3- BE ABLE TO REVIEW BROCHURES AND METHODS OF
DISTRIBUTION USED TO SELL HOLIDAYS
3.1 THE PLANNING DECISIONS TAKEN FOR THE DESIGN OF A SELECTED
BROCHURE
The brochures and the leaflet designs are the effective method to increase awareness among
the people and give them information and the data about the tour packages of certain
destination according to their demands and needs accordingly. An attractive brochure helps to
enhance the profitability and by which, high attention of customer can be gained. The tour
operators’ management departments used various strategic approaches and then make the
decision regarding provide effective brochure design by which the people can get attracted
even by seeing this and make their plans to visit the place accordingly (Needham, et al. 2017).
The KUONI also promotes their tour packages in an effective manner and develops interesting
or attractive tour packages for the people.
For developing the brochure, following steps are to be considered firstly that are described
below-
Market research: the first step of the travel and tourism industry is the researching of the
marketplace so that they can easily analyse the needs and demands of the people, which help
to make the efficient decisions in order to develop the brochures. It gathers the whole data
according to the recent trends and makes the process easier for the tour operator industry.
Selection of target market: it is important to select the target market in order to provide them
with such required services and the facilities accordingly. The management or marketing
departments of the tour operator management company segment the market and then
positioned their company or target the people and then make the decisions as well towards
providing those services (Bruni, et al. 2017). Selection of target market has been acquired on
the basis of gender, status, purpose, age group etc.
Development or planning: the tour operator management department makes the decision or
strategic approach in order to make effective or attractive brochure design so that they can
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easily gain the attention of people and enhance their profitability and effectiveness of the
organization.
Organizing and supervising: managing the staff and entire organizational things are the most
important factor and the management department of the organization controls the operations
and monitors the business practices effectively (Mwesiumo, et al. 2017). The marketing
department of the company makes the strategies and designs the brochure in an attractive
manner towards the attainment of the organizational goals and objectives and makes the
company more profitable as well.
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3.2 SUITABILITY OF ALTERNATIVES TO A TRADITIONAL BROCHURES FOR
DIFFERENT TYPES OF TOUR OPERATOR
The brochures and the leaflets are the effective methods that the several kinds of tour
operators have been utilized in order to gain the high attentive audience and promote their
market as well. The major aim of the tour operators is to enhance the profitability and provides
the required services to the customer and gains competitive advantages as well. They used
several methods to give information and the data to the people and the other alternative
option of the handout is in various terms that the company used nowadays according to the
advancements and requirements accordingly (Andergassen, et al. 2017). As the brochure
includes entire data and whole information regarding the tour destination place and it helps to
advance the tourism destination and puts the great impacts as well.
The other ways to promoting the tour packages and selling the tour packages to the people
through the E-brochure, online sites, magazines, print media, audio and visual brochure style
and many more methods are utilized by the tour operators towards attracting the customers.
The e-brochures are the type that can be easily accessible by the customers and it is actually
highly attractive and the effective in nature, which helps to enhance the profitability and the
effectiveness of the company as well (Filby, et al. 2015).
There are several benefits of the e-brochures because it has the nature of visual and audio both
by which the people can easily get the entire information in an effective manner and make their
plans to go out accordingly.
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