Tour Operations Management Report: Trailfinders Holiday Analysis

This report provides a comprehensive analysis of tour operations management, focusing on the practices of Trailfinders Ltd. It delves into the stages and timescales involved in developing holiday packages, highlighting the importance of market research, destination selection, financial planning, and negotiation with vendors. The report examines two primary methods of contracting: fixed contracts and sale-only contracts, evaluating their respective advantages and disadvantages in the context of holiday planning. Furthermore, it includes a calculation of the selling price for a five-night educational tour, illustrating the various cost components and margin calculations. The report also evaluates planning decisions for brochure design, considering research, supplier negotiation, and distribution strategies. Finally, the report discusses strategic and tactical decisions made by tour operators, providing a holistic view of the challenges and opportunities within the tourism industry.

Tour operations
management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Covered in Leaflet. ..........................................................................................................1
TASK 2............................................................................................................................................1
2.1 Stages and timescales involved in developing holidays...................................................1
2.2 Methods of contracting for different components of holiday...........................................3
2.3 Calculate the selling price of a holiday ...........................................................................4
TASK 3............................................................................................................................................5
3.1 Evaluate planning decisions for designing of a selected brochure ..................................5
3.2 Suitability of alternatives to a traditional brochure..........................................................6
3.3 Methods of distribution used to sell a holiday..................................................................7
TASK 4............................................................................................................................................8
4.1 Strategic decisions made by tour operators......................................................................8
4.2 Compare the tactical decisions that could be taken by tour operators.............................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
In today's scenario, tourism industry is now become one of the largest growing industry
over the world. In order to manage business activities and operations, there is required several
tour operators; they are considered as the vital stakeholders in the whole travelling industry. Tour
operators seems as agencies which sells various tour packages, accommodations and
transportation and other tourism facilities to customers to customers in direct and indirect
manner. Along with this, many tour operators also provides online booking facilities to
customers in order to gain higher level of customer satisfaction (Brown, Bessant and Lamming,
2013). Trailfinders Ltd., is the selected organisation in this present assignment; it deals in
travelling services in UK and Ireland. The firm was founded in 1970 and its own 29 centres in
UK and 3 in Ireland. The major objective of the Trailfinders Ltd., is to provide qualitative and
value travelling services to customers for gaining high competitive advantage. Apart from this,
the report will be described current and recent trends in tour operators industry. There will
discussed the major stages and timescales which involves in developing holidays. Readers will
also come to know various methods of contracts while planning of tour packages.
TASK 1
1.1 Covered in Leaflet.
TASK 2
2.1 Stages and timescales involved in developing holidays
Planning of a holiday package is so lengthy process. The last tourism plan of Trailfinders
taken almost 2 years. One of the major issue in tourism planning is making an estimation of price
which is affected by several reasons, such as- currency fluctuations, inflation rate, tax structure
etc. Therefore, tour operation managers have to considered several steps in order to take
maximum advantage of tourism plan, such as-
Marketing research – The prime objective of tour planning is to do more and more
research so as to examine as well as recognise the best tourist destinations. It also helps tour
operators to determine the interest of customers where they prefer to go. Along with this, they
also have to focuses on identifying economic, climatic, social and political factors which will
affect the development of package tours (Chand and Katou, 2012). While conducting a market
research, tour operators need to select a target market so as to capture large market share. Several
forecasting are made in tourism that can hit changing trends of customers. In order words,
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variations in preferences of visitors can leads to dynamics helps in making more effective
marketing research.
Selection of holiday destinations – Afterwards, with the assistance of gathered data tour
operators can select different tourism destinations which are able to meet visitors expectations in
an effective manner. Approx, 4 to 6 tourism places should be selected. Along with this, selection
of these tourism destinations would be depend on the research. The chosen tourism destination
would be involved some probable options from the list and then taking a final decision for 2 or 3
destinations (Tour Operations Management. 2016).
Financial planning – After deciding tour destinations, managers have to make a cost
estimation of tour package. Financial planning also encompasses determination of monetary
value; in order words, tour operators need to find out the overall expenses which will be incurred
to give a proper shape to a holiday package. On the other hand, tour operation manage is a very
complex decision, there should be considered various factors, such as- government policies,
market segments, inflation, terrorism, climate, competitive prices, fluctuations in exchange rates
within tourism demand (Chon and Yu, 2012). It will help tour operators to make a tourism
budget so as to recognise the accurate actual amount which will be spend on tourism activities.
Negotiation with tour vendors or suppliers – The next step is to negotiate prices with
vendors. A tour planner works with several vendors , major are – airlines, transport operators,
lodging companies, hotels etc. If a tour planner has good interpersonal relations with tour vendor
then he can easily negotiate prices.
Execution and marketing of the plan – At last, by fulfilling all legal requirements tour
operators can easily execute the plan. Every country has its own different rules and regulation
which have to be understand and fulfilled by tour planners in an ethical manner in order to
provide effective services to visitors. Afterwards,Trailfinders develops its marketing strategies
for promoting the upcoming as more and more customers can know about it. Cited venture adopt
various ways to promote its tour plan, such as- social media, web portals, online advertisements
etc.
A timescale is prepared for developing a holiday, the Gantt chart will be developed, such
as-
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Activities 1 to 7
Day
8 to 14
Day
15 to
21 Day
22 to
28 Day
29 to
35Day
36 to
42 Day
43 to
49 Day
50 to
56 Day
Marketing research
Selection of tour
destination
Arrangement and
negotiating with service
providers
Fulfilling legal
requirements
Promotion Strategies
2.2 Methods of contracting for different components of holiday
There are two types of methods which can adopt by tour operators while designing tour
packages, such as- fixed contract and sale only contract method. Below mentioned are the brief
description of these contracts: - Fixed contract – In this kind of contract, the service providers takes amount on the basis
of volume of services for increasing their profitability and revenues in order to cover up
sales in off season. In this context, tour planner books total capacity rather than actual
consumed capability. Furthermore, Trailfinders Ltd., has also get into fixed contract for
preparing an upcoming summer tour package. But it contains a major risk of in-utilised
capacity because tour planner will be paid overall amount according to the terms and
conditions contract. In this, contractors can offer huge discounts as the number of
visitors always seems high. Trailfinders can also choose selects fixed contract because it
will provide high discounts to company. On the other hand, fixed contracts are created
between tour operators and other stakeholders, like transportation and hotel owners. For
example- if all hotel rooms would not be filled then also company will be pay actual
amount to dealer which was fixed previously (Page, 2014). Generally, fixed contracts are
made at lower prices at cheaper in comparison of sale only contracts; but these contracts
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are capable to earn huge profitability or revenues in peak season time when the demands
of tourism are high.
 Sale only contract – Such contracts are totally differ from fixed contract, here price is
paid just only for sold facility. Sale only contracts are simplex in nature and mostly used
by mass marketers. They work as a income generated tool for dealers because sale only
contracts depend on the number of visitors which are coming to the hotel. In the present
context, Tour operator Trailfinders Ltd., has also selected sale only contract while
preparing upcoming holiday package for South Africa. In lean seasons, the value and
costs of these contracts are increased (Nolz, Doerner and Hartl, 2010). Along with this,
Sale only contract are prepared by keeping in mind needs and wants of large group of
people. In this manner, tour operators will have to pay only for the capacity utilized by its
client. The major reason behind these contracts is to provide special attention and indulge
facilities to consumers. Although, sale only contracts are expensive for companies but
can make premium customers in market. Apart from this, risk of weak responses is
always associated with this type of contract. Therefore, tourism companies have to
selected the niche marketing and time of off season for sale only contracts.
Therefore, Trailfinders Ltd., can use both contracts while preparing holiday package, but
before this, they need to identify its merits and demerits as well. After that, determination of best
or appropriate contract will be selected; it help in earning more profits for the company. It can
also ensure the growth and survival of the firm. Then planning starts for selected method which
should be creative and innovative. At last, implementation of the plan in an effective manner; all
decisions will be monitored regularly.
2.3 Calculate the selling price of a holiday
In the present case, a five night educational tour for Brussels and Brugge, Belgium is
developed. The group size is 42 and booking of these passengers is made with Trailfinders
airlines on fixed contract basis and payment has been made in advance rather than the actual
capacity utilized.
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Calculations are made in (£)
Particulars Calculation Amount
Cost of room per person €96 / 1.12 £85,71
Cost of luxury seat per person
Total variable cost £276.18
€1.12 = £1
Add :- Cost of guide per day £85,71x42 3,599.82 (1 night)
Cost of accommodation 3599.82*42 £17999.1
Transport £11200
Tour guid £945
Total Cost before margin £30144.1
Total margin of 33% £9947.55
Sale price £40091.65
Cost per person 40,091.65 / 42= £954.56 / PERSON / HOLIDAY.
As per above table there are different figures are taken to calculate the cost of tour
package per person. There is a rate of Euro and pound are given which need to be adjusted in
given summary. All the calculations are made around cost of tour package of Trailfinders Ltd.
There are variable and fixed charges are bifurcated separately. As per above calculation net cost
of tour and package is calculated £954.56 as the guide cost is considered semi fixed cost and
bifurcated according to 5 days.
TASK 3
3.1 Evaluate planning decisions for designing of a selected brochure
The travel and tourism company, i.e. Kouni also uses brochure as a mean of providing
information to customers about its upcoming tour plan. The tour company is specialised in
luxury travel and related services, like visa processing. Distribution of brochure will be helpful
for the company in terms of reaching large group of in lower cost (Nakayama and Bucks, 2012).
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It complies the requirement of appropriate and attractive brochure which involves all
information. In addition, it is essential plan, organize and implement all working activities in a
systematic manner. There are defined some planning decisions related with brochure design
process which are stated as under: - Research for planning – In brochure designing, tour planers firstly have to conduct a
research regrading holiday destination by covering all aspects. Research also helps in
identifying major issues before creation of brochure; issues can be related with target
market, segmentations, objectives, time limit etc. Along with this, research also carried
out in order to recognise customers' profile as well as tourist destination for which
brochure would be prepared. Supplier negotiation – After choosing in an effective brochure design, the second step is
negotiation with vendors/suppliers. In involves to reduce total cost of brochure; now
these days travelling companies are spending high amount on brochure creation in order
to attract customers. there are several brochure designers are available in market
(Moutinho, 2011). Admin – In brochure designing, admin is responsible for examine the entire brochure. It
person also checks that whether brochure deliver right information to customers or not.
Thus, verification and rectifications of all details is made by the admin.
 Marketing – Marketing team of company uses various ways to distribute or spread
brochure in market in order to reach large group of customers in a certain time period and
influence them to purchase tour plan. These marketing methods are – print media,
displays, outdoor banners, direct distribution, social media etc.
Therefore, the planning of brochure is completed in four step, where each step is different
from other and it is necessary for Kouni to avail all steps. In which, planning refers to identify
the strategic aspects whereas supplier negotiation diminishes cost of brochure design. On the
other hand, admin is to ensure that whether the brochure is matching with strategic decisions of
the company of not. At last, marketing helps in distributing brochures among target and potential
consumers. It aids in bringing awareness and their interests as well.
3.2 Suitability of alternatives to a traditional brochure
Tour operators, i.e. mass tour operators and direct selling tour operators are used
traditional brochures since long term period. They are printed and then distribute to target market
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of the company so as to aware customers regarding the upcoming tourism services offered by
Kouni. But the physical distribution system has its own limitations in terms of higher stationery
and marketing expenses. Therefore. Kouni Ltd., is decided to use E-brochure for reaching
maximum customers in cost effective manner; it contains multiple page content. E-brochure
written by professionals and it also involves attractive graphics and pictures (Medlik, 2016). It is
an environmental friendly method of promoting travelling business tourism business by reducing
carbon. It also reduces incursion time and provide accurate database towards the target market
segmentation.
E-brochure can also reach those areas or segments where physical brochure cannot.
Along with this, it also makes easier for tour operators as they can remove irrelevant information
and add new ones. Therefore, it can be said that, it can also eliminiate designing, marketing and
material cost.
3.3 Methods of distribution used to sell a holiday
Kouni is a travel and tourism company which operates several travelling services, such
as- airlines, cruise lines, package holidays and hotels. Below described are the various methods
which can be used by the company to sell its holiday package: - Brochure distribution method – It is one the oldest method of selling a new holiday
package; it is adopted by several companies so as to make effective tourism activities. In
old days, mostly companies used big brochures so as to deliver the overall information to
customers. But in this modern era, the size of brochures is also getting small and
attractive; it contains only necessary information about holiday destinations and the
actual price which will be charged by company (Martinez, Stapleton and Van
Wassenhove, 2011). Beside this, brochures has taken the form of catalogue as same as
women magazine which displays different clothing options. Generally, such brochures
sell to potential customers of the company in order to attain them if they are interested to
travel that place which is highlighting here. The major issue is brochure distribution
method has put low impact on customers, due to uncertainty in types of services provided
by the tour operators. Apart from this, many tour packages are provided at very low cost
or some exclusive discounts in order to attract but it takes further hidden charges with the
existing charges displayed; it can reduced reliability or credibility for brochure
distribution method.
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 Website distribution method – In this modern era, website distribution method is one of
the popular method which can used by tour operators in order to promote their holiday
package in large group of customers. It involves different technical tools such as- e-mails,
websites, social media sites. In present age, there is increasing the number of people who
used interest; thus it is very easier for tour operators to reach at global level customers in
a minimum cost or less time period. The major advantage of website distribution method
is, it can reach to those places where brochures can't. Therefore, with the assistance of
this distribution method tour operators can easily advertised for brining high traffic on
their websites. Agent distribution method – The prime objective of agent distribution method is to
accomplish those targets which cannot fulfil by other methods, i.e. website and brochures
methods. Along with this, there are three types of agencies which are involved agent
distribution method, such as- multiple, maniples and independent. These agents contact
directly to customers to sell holiday package and influence them to purchasing it through
giving exclusive discount rates or offers (Mak, 2011). Agents have full information about
products as they can easily explain it to customers. They also provides critical
information to interested customers so as to decision can be made instantly.
 Direct selling distribution method – It employs selling a holiday package directly to
customers without involvement of any intermediaries. The method of selling is either
based on enquiry or direct to customers' in order to provide them relevant information as
well as carrying out higher sales of upcoming holiday package of Kuoni. Direct selling
distribution also reduces the cost of direct distribution as compared to other methods.
TASK 4
4.1 Strategic decisions made by tour operators
In tourism industry, several strategic decisions are made by tour operators for smoothly
running their business activities. These decisions can be related with planning and creating a
brochure, pricing fixation, selection of distribution method and determining the target market of
company. Some major strategic decisions of travel and tourism business are defined as under: - Discount pricing strategy – It is essential for Trailfinders Ltd., to formulate certain
pricing strategy for completion of necessary tourism activities. Through which, tour
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operators can offer them exclusive discounts and other offers in order to increase the
effectiveness of tour packages (Kerzner, 2013). Segmentation, targeting and positioning – In targeting, tour operator choose who will be
the customers of the company for different services, such as – bus, train and airline
passengers. These people will benefit the company by arranging its all activities. Apart
from this, tour operators will segmenting market on the basis of customers' needs and
wants. Positioning means to provide high class facilities to visitors for improving firm's
market image or brand value. Promotional strategies – In this, tour operators are trying to promote their services based
by adopting an effective promotional strategy. Makemytrip, cleartrip, oyorooms,
goibibo, Trivago, Thomas cook, etc. all these applications can be used by company in
order to promote itself.
 Competitive strategy – The strategy adopt by firm so as to gain high competitive
advantage. Like when Easy Jet increases its prices, its main competitor British Airways
reduces prices for attaining and retaining more customers.
4.2 Compare the tactical decisions that could be taken by tour operators
Tactical decisions are liable in gaining long term sales and profitability for a business
organisation. It will assistive for tour operators to perform all functions and activities in an
utmost manner. Thus, tactical decisions of a firm will cover higher negotiating from service
providers, arranging food and accommodation facilities and make a contract with stakeholders so
as to become an imperative part of value chain (Jaafar and Maideen, 2012). While taking any
tactical decision, it is essential for tour operators to make a list of proposed services Thereafter,
subject matter are planned and then send them service providers for inviting quotations. Along
with this, quotation should be appropriate and effective and depend upon pre-determined
budget.
On the other hand, it also helps tour operators to take short term decisions. Trailfinders
Ltd., also trying to interact with its customers with an aim of selling tour package to customers.
For this, they are using telephone, messages or emails for improving buyers' loyalty and
enhancing profitability.
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CONCLUSION
From the above mentioned it has been summarised that tourism industry has taken high
place in market for itself. Every year, the industry contributes 20% in growth and development
of an economy. Apart from this, in this modern era, tourism industry is changing day by day,
Britsih government also provides remedies in taxes. Holiday planning is a difficult activity for
tour operators so that before this they need to analyse overall business environment. They also
have to involve certain stages such as negotiation and contracting. Trailfinders has to calculate
selling price for its holiday plan; should be adapatable by all class of customers. These are the
main methods of distribution of selling a holiday package, such as- brouche distribution method,
website distribution method, agent distribution method and direct selling distribution method.
While taking strategic tour decision it is fundamental for tour operators to evaluate them so as to
pertaining to their business area and gaining high competitive advantage.
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