Tour Operator Management: Holiday Development, Pricing & Strategies

This report provides an overview of tour operator management, analyzing the effects of current trends and developments on the industry. It discusses the stages and timescales involved in developing holidays, the suitability of different contracting methods, and pricing strategies. The report also examines planning decisions for brochure design, alternatives to traditional brochures, and distribution methods. Furthermore, it explores strategic and tactical decisions made by tour operators in various situations, offering a comprehensive understanding of the complexities and dynamics within the tour operator industry. Desklib provides this and many other solved assignments for students.

TOUR OPERATOR MANAGEMENT

Table of Contents
INTRODUCTION..........................................................................................................................2
TASK 1.........................................................................................................................................3
1.1Effects of current and recent trends and developments on the tour operators industry
................................................................................................................................................3
TASK 2.........................................................................................................................................5
2.1 The stages and timescales involved in developing holidays............................................5
2.2 The suitability of different methods of contracting for different components of the
holiday and different types of tour operator.........................................................................7
2.3 Selling price of a holiday..................................................................................................9
TASK 3.......................................................................................................................................10
3.1 The planning decisions taken for the design of a selected brochure............................10
3.2 The suitability of alternatives to a traditional brochure for different types of tour
operator...............................................................................................................................13
3.3 The suitability of different methods of distribution used to sell a holiday for different
types of tour operator..........................................................................................................15
TASK 4.......................................................................................................................................16
4.1 The strategic decisions made by different types of tour operator................................16
4.2 The tactical decisions that could be taken by a selected tour operator in different
situations..............................................................................................................................18
CONCLUSION............................................................................................................................19
REFERENCES.............................................................................................................................20
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INTRODUCTION
The tour operator industry has been growing with time such that several enhancements are
observed in the operations. In addition, the tour operators are providing a different kind of
services to the customer that plays a huge role in their development and revenue
generation. The tour packages provided by the tour operator are based on different aspects
and they are promoted in the market through different methods and strategies which gain
the attention of consumers. The tour operator industry has been enhanced at such a great
extent that the consumers could purchase tour package from any place in the world through
different mediums like online websites, applications, or offline stores (Goodall and
Ashworth, 2013). The tour operator is providing several services to the customers in their
tour packages such as lodging facility, accommodation, travelling, etc. The consumers have
the option of choosing suitable tour operator from the industry as per their requirements
like cost-effectiveness and better quality. This report will be discussing several aspects of
tour operator industry along with the formation of strategies.
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TASK 1
1.1Effects of current and recent trends and developments on the tour
operators industry
The product development team of
Trailfinders Ltd. has analysed that there
are several current and recent trends that
are observed in the functioning of tour
operation industry. In addition, there are
several enhancements that are conducted
in the tour operator industry which leads
to the different influence on the business.
It has been depicted from different
sources that the economy of the UK
majorly depends on the tourism (Mak,
2011). In recent time, the tourism industry
has been influenced by different elements
that are explained as follows:
 Customer Satisfaction
The tour operators are providing
different products and services of
high quality to the customers
which develop satisfaction in them
along with the loyalty that further
helps the business.
 Globalisation
Several countries are collaborating
with the tour operator to
encourage tourism in their
countries. Due to globalisation, the
tourism industry has been gaining
a huge success in the market. The
number of tourists has been
increasing in each year and they
are visiting different areas of the
world like the United Kingdom.
Figure – Aspects of globalisation
[Source -
https://garsidej.wordpress.com/y
ear-9/globalisation-culture-and-
tourism/]
 Marketing Strategies
In tour operator industry, the role
of marketing strategies is
important as it ensures growth in
the business. Trailfinders Ltd. is
using different marketing
strategies in order to attract the
customers of the UK towards their
products and services. The major
3

strategies used by Trailfinders Ltd.
for gaining the attention of
customers are advertising at online
platforms, social media usage,
discounts and offers on tour
packages, new services, etc.
 PESTLE Factors
PESTLE comprise of six factors such
as Political, Economic, Social,
Technological, Legal, and
Environmental. These factors help
Trailfinders Ltd. in assessing their
external environment which
further helps in developing
effective strategies for the
business (Zaei and Zaei, 2013). The
major influence is observed in the
products and services which have
been analysed through PESTLE
effectively. The factors are
effectively analysed in order to
develop the suitable strategies and
methods for the effective
functioning of the business.
 Technology
The advancement in the field of
technology has developed several
opportunities in tourism and tour
operator industry. There are
different facilities provided to
customers by the tour operator
such as online booking, mobile
application, etc. Due to economic
growth, the spending power of
consumers has been increasing in
the UK and also in other parts of
the world (Evans, et al. 2012). This
helps in strengthening the tourism
as well as tour operator industry.
 Variety of Products
The tour operators like Trailfinders
Ltd. are providing a different kind
of products and services of high
quality in the market which further
gain the attention of customers.
The requirements of the
customers are considered by the
tour operator which highly
satisfied the customers and it
increases their demand regarding
tourism.
4

TASK 2
2.1 The stages and timescales involved in developing holidays
It is necessary to develop the timescale for the holiday so that the planning of the holidays
could be conduct effectively. Timescale development is very helpful in enhancing the
management of the holiday package. In addition to this, the timescale will be helpful for the
short duration tour packages as the proper utilization is done by the customers. There are
some essential aspects which should be considered while the progress of timescale
regarding the development of holidays:
 Research
Market research is helpful in developing the holidays as it helps in analysing the
current trends and requirement of the customers (KhairatP0F and Maher, 2012).
There are various aspects which should be considered and analysed in the market
research for the effective development of the holidays like accommodation, places,
weather, culture, safety, etc. The holiday will be effectively developed by researching
these aspects.
 Negotiation
The service provider is one of the important elements which should be considered
during the holiday planning. It is important to negotiate with the service provider
during the planning of a tour regarding different services. For maintaining attractive
pricing for the holiday the management of tour operator will be negotiating with
different service providers like travel operators, vendors, hotels, drivers, etc.
 Cost Assessment
The total expense in the development of holiday will be effectively assessed in cost
assessment. There are different areas in which the expenses will be made for
providing quality services to customers such that it is important to manage the
expenses regarding accommodation, travelling cost, research cost, payroll, etc.
 Planning and Scheduling
Proper planning and scheduling will be done by the tour operator management for
developing the holiday (Mason, 2015). The tour operator management will be
planning the trip for 5 nights so that the students could effectively enjoy the trip.
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 Managerial Staff
It is important for the tour operator management to recruit staff members who are
skilled and possess knowledge regarding the holiday package. There are some
essential requirements for the staff members such as knowledge about destination
sites, effectively delivering services to students, decision-making skills, handling
problems easily, etc.
 Analyses and Evaluation
It is essential for the tour operator management that they effectively analyse and
evaluate the tour for betterment (Novelli and Hellwig, 2011). The tour evaluation
could be done on different aspects of customer's interest, feedbacks, marketing, etc.
From the analysis, it is evaluated that the tour development will require 5 months
and the timescale for the development of holiday will be accessed through Gantt
chart.
TIME SCALE 1st MONTH 2nd MONTH 3rd MONTH 4th MONTH 5th MONTH
RESEARCH
NEGOTIATION
COST ASSESSMENT
PLANNING AND
SCHEDULING
MANAGERIAL STAFF
ANALYSES AND
EVALUATION OF
TOUR
6

2.2 The suitability of different methods of contracting for different
components of the holiday and different types of tour operator
In this scenario, the contract is known as the argument which is made during the
agreement. It is similar to a deal that occurs when agreeing on the products and services
values. There is a different kind of contracts that are developed for the planning of services
and success of the holiday. During the development of holiday, several aspects should be
considered by the tour operator management such as destination place, sightseeing sites,
transportation facility, accommodation, etc.
There are various methods through which the tour operator company are contracted. These
methods are discussed in details as follows:
 Fixed Contract
This type of contract is generally fixed and the packages that are offered by the tour
operator to the customers. The price of the tour package is fixed and they provide
the similar product to every customer at the same price but for the large groups, the
modifications are made in the price (Papathanassis and Knolle, 2011). It is observed
that the fixed contracting is effective during the bulk booking a large number of
customers booked at the same time which benefitted the tour operator. Suitable
discounts and offers are provided to the customers during bulk booking.
 Sales Only Contract
The prices of this type of contract are much higher than the fixed contract. The
demand for sales only contract is higher during the peak season as the need of
consumers during the peak season is higher and it provides an opportunity to the
service provider in gaining huge business. The package of the tour is of normal cost
but during peak season the cost of packages raises. By taking the huge price for the
tour package substantial profit is attained by the tour operator.
The major objective of this contract is to fulfil the requirement of the customers with
high-quality services under high prices. The drawback which is observed in this
contract is that the customers’ response towards the packages becomes low as the
price of packages become high.
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Both the contracting methods of tour packages are available for the tour operator but the
most suitable method for the effective business is fixed contract method. This method helps
the tour operator in gaining substantial growth and developing a positive image in the
industry. The method is cost effective and more reliable in the industry. Also, the method
could easily apply on small as well as a large number of tourists.
The tour operator effectively manages and plans the holiday package for the customers. In
addition, they are also known as the tour assistant to the people that are purchasing their
tour packages (Jacobsen and Munar, 2012). There are different kinds of tour operators such
as:
 Domestic Tour Operator
The domestic tour operator provides services to the customers on the local basis.
The domestic tour operator belongs to the country in which they are promoting
tourism. In addition to this, the domestic tour operator effective assists their
customers during their visit.
 Ground Operator
The ground operator is certain kind of agency that worked with different service
providers in terms of selling tour package, accommodation facility, hotel facility,
bookings, etc.
 Inbound Tour Operator
Inbound tour operators are the tour operators who effectively take care of the
customers from their arrival to departure from the destination site (Baddeley and
Font, 2011). In addition, they also take care of every need of the customers.
 Outbound Tour Operator
This type of operator provides tour packages to different kind of customers such as
family, group, students, etc. of domestic or international destination sites.
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2.3 Selling price of a holiday
The Grand Casselbergh in Bruges is providing their services at the special rate to Trailfinders
Ltd. A room for two is 96 euros for each person which also includes the breakfast. A travel
bus with the full facility of 48 people capacity is under £11,200. The local guide will cost
£945 for the entire duration of the tour (Swarbrooke and Page, 2012). In addition,
Trailfinders Ltd. adds a markup of 33% to the overall cost. The tour package price has been
given below:
Cost Calculation Amount
Cost of rooms and BB 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 £ 17,942.40
Cost of bus £ 11,200.00
Cost of guide £ 945.00
The total cost of the tour is £ 30,087.40
Mark up of 33% = 9,928.84
Total price of tour is £ 40,016.24
Number of tour member is 42
Then price of tour for single person is £ 952.76
9

TASK 3
3.1 The planning decisions taken for the design of a selected brochure
There are various tour operator companies in the industry that are using brochures and
pamphlets for the marketing of their products and services in order to gain the attention of
the customers. The brochures and pamphlets help in providing the detail information about
the tour package of the tour operator. In addition to this, the brochures and pamphlets help
the customers in gaining information of tour and its expenses effectively.
It is important for the tour operator company that they effectively design the brochures and
pamphlets so that they could gain the attention of the customers. In order to effectively
understand the design of brochure some sample brochure of reputed tour operators such as
Thompsons and Thomas Cook has been presented below (Kärcher, 2013). There are various
aspects which should be considered in order to design a brochure such as:
 Brochure Format
During the designing of the brochure, it is necessary to develop the format for the
brochure. There are certain elements which should be involved during the formation
of a brochure like the name of the tour operator company, different destinations for
the tour, price of the tour, facilities like transportation, accommodation, the time
period for the tour, and other required information.
Figure- Thomas Cook Brochures
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[Source - http://www.traveldailymedia.com/235071/thomas-cook-first-to-market-with-
summer-17-brochures/]
 Comparison of Competitors
Apart from Trailfinders Ltd., there are different tour operator in the industry which is
bigger than them like Thompson and Thomas Cook. The brochures of both the tour
operator company are analysed and it has been evaluated that the brochure pattern
is attractive of Thomas Cook as the comparison to Thompson while the tour package
price of Thompson is cost effective. In addition, the destination site chosen for
holidays by Thompson is more beautiful than Thomas Cook. Overall, the brochure of
Thompson is highly attractive as compare to Thomas Cook.
Figure – Thomson Brochures
[Source - https://www.express.co.uk/finance/city/2431/First-Choice-to-join-12bn-giant]
 Content
The decision for the format of the brochure is taken by the tour operator
management such that the management takes the appropriate decisions as per the
trend (Walton, 2011). In addition, they analyse the strategies of the competitors
which further helps in making effective decisions. It is necessary for the brochure
that the information in the brochure helps in fulfilling the requirement of customers.
Also, the content language should be fluent and easy to understand as it further
helps in growth of tour operator.
 Graphics and Colours
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