Thomas Cook Group PLC: Sales, Budget, Revenue, HR, and Legal Analysis

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TRAVEL & TOURISM BUSINESS TOOL KIT
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Table of Contents
Introduction..............................................................................................................................2
Part 1: Sales, Budget and Revenue Management...................................................................3
Part 2: HR Life Cycle and Human Resource Strategy.............................................................5
Part 3: Legislation and Ethics in Travel and Tourism (500 words)...........................................8
Conclusion...............................................................................................................................9
Reference List........................................................................................................................10
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Introduction
In recent times, Travel and tourism industry is growing at a vast pace. The entire industry of
travel and tourism has a common goal of catering to the needs of every traveller and
providing them with desired product or services. Travel and tourism industry is regarded as
the largest civilian industry in the world, in accordance to a survey an individual out of every
ten is part of the above-mentioned industry. Every organization in this sector has to develop
their offerings at every instance to keep up to the expectation of their customers. This is the
very reason for the necessity of an efficient business tool kit, which will keep the organization
aligned with the customer’s need.
The organization chosen for this study is Thomas Cook Group PLC, which was founded
back in 1841. Headquarter of Thomas Cook Group PLC is located in London, United
Kingdom. In 2007, two separate companies named “Thomas Cook AG” and “MyTravel
Group Plc” was brought under the same roof and was renamed as “Thomas Cook Group
Plc”. The organization is considered as one of the major players in the travel and tourism
industry because it has generated revenue worth seven thousands million pounds in the
year 2018.
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Part 1: Sales, Budget and Revenue Management
P1. Discuss the rationale and principles of revenue management for the travel and
tourism industry.
Organization like Thomas Cook Group PLC already has a well-established market and they
have their reach to the mass. Therefore, their primary objective is to bring out maximum
revenue out of minimum amount of investment (Smith et al., 2016). This is the very reason
they should carry an efficient business tool kit. In the field of travel and tourism, revenue
management is regarded as the procedure of trading the suitable room, to the suitable client,
at a suitable moment for the suitable price with the help of an efficient distribution channel at
best cost efficiency (Board and Skrzypacz, 2016). Two separate entities pricing and
distribution should be taken into account to maximize revenue and therefore profit.
Effective market research and proper customer segmentation can be the two essential
principles of revenue management that Thomas Cook Group PLC can incorporate to bring
out maximum profit. Effective market research will help the organization to discover more
hotels, motels and other services at a reasonable rate, which would be quite beneficial for
the organization. Segmenting customer should be the primary objective of the organization
because this area has a lot of potential. Eventually, there are two types of person travelling.
The first group is said to be travelling for leisure and the other for business. Thomas Cook
Group Plc should keep a close combat upon them. People travelling for leisure will generally
look for some discounts as they are paying their cost from their own pocket. Whereas,
people travelling for business are not paying the cost incurred from their own pocket so they
do not look at the price that much. The organization should design their offering list
effectively so that the need of both the segment is catered and maximum amount of revenue
is earned.
P2. Investigate how a specific sector of the travel and tourism industry applies
revenue management tools to generate and maximise profit.
The application of methodical analytics that anticipate customer behaviour at the micro-
market levels and amend product availability and cost to escalate revenue growth is known
as Revenue Management (Abrate and Viglia, 2016). There are certain tools, which can help
an organization to manage their revenue systems. The competition among the airline
organizations is intense as the market is dynamic and margins are becoming narrow day by
day.
A revenue tool named airRM is proving to be very beneficial for Accelya, who are giving a
tough fight to Thomas Cook Group Ltd. The above mentioned revenue tool helps in
identifying opportunities and making effective pricing decision, which will boost the bottom
line of revenue (Nagle and Müller, 2017). AirRM also help Accelya to take smart decision,
which will make them stay competitive within a dynamic marketplace. The revenue tool also
leverages insights from numerous data sources, which help it to manage thousands of flights
together.
Thomas Cook Group Ltd can opt for Outperform RMS as a revenue tool to survive in the
competitive market. This software will be very beneficial for the accommodation sector of the
organization. Outperform RMS includes competitor analysis, revenue management
reporting, PACE, alerts, events API, rate shopping, price optimisation, trend analysis, pick up
and YOY revenue budgets (Li, 2018). This application will cut down the operational cost and
time of the organization and will increase the revenue generated because it use past,
present and future data to calculate optimum pricing through intuitive algorithm. This
software will definitely provide a competitive advantage to Thomas Cook Group PLC.
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P3. Explore the different types of financial statements and reporting mechanism for
organisation within the travel and tourism industry.
Written records that transmit business activities and economic performance of a particular
organization is known as Financial Statements (Minnis and Sutherland, 2017). Financial
statements include three components namely balance sheet, income statement and cash
flow statement. Thomas Cook Group Plc generally follows several types of financial
statements but the primary ones are Income Statement and Balance sheet.
Income statement reflects an organization’s financial performance over an entire reporting
period. It incurs inputs like sales and expenses to obtain net profit or net loss incurred by the
organization. The reason behind following this type of financial statement is that it reflects
both expense and revenue of an organization. Thomas Cook Group Plc can lay focus on
cutting of their expense and maximise their revenue by following this single process of
income statement. This always gives a competitive edge to the organization.
A balance sheet reflects the financial position of an organization for a particular period
(Feyen et al., 2017). This type of approach includes three major entities of a business, which
are assets, liabilities and equity. The main reason behind following this type of approach is
that it aligns the assets and liabilities in order of their liquidity. Hence, the organization gets
to know where they can in flow cash for the business and the place from where they can
have an out flow of it. A balance sheet proves to be very effective during a cash crunch
position.
P4. Explain the importance and value of budgets for controlling business
performance and identifying variances.
The process of creating an efficient plan to spend liquid cash incurred in a business is known
as budgeting (Wildavsky, 2017). It helps a business to regulate initially whether they will
have enough cash in hand to spend in required areas. A business plan ensures the
spending capacity in a business help an organization to stay out of debt.
Thomas Cook Group PLC needs to acquire the process of budgeting to maintain a smooth
operation of business. A proper budgeting is necessary to maintain an equidistant between
all the departments of the organization. It also helps in the process of maintain a proper line
of leniency. Implementation of proper business plan depends a lot on budgeting because it
reflects the amount of capital available for that. Moreover, an efficient budgeting is also quite
necessary for the process of business expansion, which is one of the primary objectives of
Thomas Cook Group PLC.
Sometimes there occurs a huge gap between a budget and a real time expense. In this
place, identifying variance comes into play. Identifying variances means assuming the
difference between budgeting and real time expense. Thomas Cook Group PLC follows this
strategy to make the process of making budget more effective. Identifying variance also
eliminate any potential risk coming in the way of business operation, which build up a strong
trust between the employees of Thomas Cook Group PLC. The organization can formulate
new business strategies if the identification of variance is accurate.
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Part 2: HR Life Cycle and Human Resource Strategy
P5. Review the different stages of the HR life cycle applied to a specific travel and
tourism job role, and their importance for retaining and developing talent.
HR Life Cycle is regarded as Human Resource Life Cycle or Employee Life Cycle too. It
refers to the different stages that an employee undergoes after his/her inclusion within an
organization (Bodie, 2015). The process initiate with proper recruiting of the employees.
Thomas Cook Group PLC should lay maximum focus on this stage because a lot raw talents
can be effectively included within the organization if this process is carried out effectively.
After employing a bunch of fresh talents, much focus should be laid upon their training and
shaping them up to meet the industry needs. The process of training incurs in a lot of capital
but is effective for sustainable development. Thomas Cook Group PLC has a strong training
process to make their employees meet industry standards.
When an employee gets properly trained and is ready to face all the ups and downs of the
industry, there should be presence of enough career opportunities in the present
organization. Thomas Cook Group PLC is working within a dynamic environment, where
they face daily challenges from their competitors so automatically there is a presence of
career advancement in every point of time. It is upon the organization to provide its
employees with proper remuneration and rewards. Then the process of termination or
transition comes into play where both the organization and the employee play an effective
role. Thomas Cook Group PLC is an established organization where performance is the
ultimate key to success so if an employee performs well he will face the process of
transition. On the other hand, a low performing employee will face the process of
termination.
P6. Develop a performance management plan for a specific travel and tourism job
role, applying techniques to resolve negative behaviour and to overcome issues of
staff retention.
Executive Summary
The Performance Management Plan works as an effective tool to align employee’s
performance along with the organizational goal and minimize the amount of negative
behaviour available in the system. The framework is being divided into four essential parts.
The first part deals with setting up of a particular goal for the organization related issues. The
second part of the framework includes different types of strategies like Pre-emptive
Management and Performance Management Cycle, which will help Thomas Cook Group
PLC to remove the amount of negative behaviour from the system. The amount of time
taken and the amount of capital invested is stretched on the third part followed by a peer-to-
peer review to know the effect of the framework in the final part.
Goals
The goal of Thomas Cook Group PLC is to minimize the amount of negative behaviour
from the system and to maximize the amount of productivity, which will have direct
effect on the annual turnover of the organization.
Strategy
Thomas Cook Group PLC is already an established organization with a massive amount of
market share. It will be helpful for them to apply the strategy known as Pre-emptive
Management to minimize the amount of negative behaviour from the system. It is regarded
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as the fundamental process of setting up goal for an employee so that there is absence of
guesswork in the workplace.
The initial stage of the strategy makes all the employees stand at a similar point making it a
biasness free system. Then, goals for every employee are announced along with the
expectation from them. The lucrative factor of reward and incentive is also being bought up
into the employees notice (Argyris, 2017). These motivators play an effective role in the
process of enhancing an employee performance. This strategy also allows the manager to
identify the weakest employers from the lot and provide them with essential feedbacks
during the initial stages only to keep them driven towards organizational goals. Recognition
based on the employer’s performance also plays an effective in this process of enhancing
employee performance (Hastings and Malpass, 2015).
Thomas Cook Group PLC will achieve a much effective feedback system if they start
following this above-mentioned strategy. Moreover, there will be minimal presence of
negative attitude among the employees, which will directly affect the revenue generation of
the organization.
Performance Management Cycle will also act as effective strategy for Thomas Cook Group
PLC in this dynamic business atmosphere. It plays an effective role in enhancing the
performance of an employee, which will obviously give a competitive advantage to the
organization (Shields et al., 2015).
Performance Management Cycle is generally a cycle of four components. The first one is
said to be Planning, which includes the process of setting up goals for groups and
individuals (Kerzner and Kerzner, 2017). Forecasting performance analysis also falls under
this category and it is the initial stage of driving the workforce towards organizational goals.
The second stage of the cycle is said to be monitoring, which means keeping a close eye on
the performance of the employees and providing them with continuous feedback so that they
can cope up with the pace in the initial stages only and keep themselves aligned with
organizational goals. The third stages is said to be reviewing, which means assessing an
employee’s performance in comparison with the objective assigned in the initial stage. This
higher authority of the organization should keep a close eye on this process because their
lies a possibility of biasness. The final stage of the process is said to be the process of
rewarding the employees with proper remuneration, incentives, rewards and recognition
based on their performance.
Thomas Cook Group PLC already has a massive employee count. This is the very reason;
they should conceive this type of strategy, which will maximise the production of the
organization, which is directly proportional to the annual turnover of the organization.
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Planning
MonitoringRewarding
Reviewing
Figure 1: Performance Management Cycle
(Source: Created by learner)
Time and Budget
The above-mentioned strategies are a lot time-consuming and will incur in a lot of capital in
the initial stages but it will definitely provide immense support to the organization for
substantial development. A lot of human capital is required to keep a close eye on the entire
process and acquiring of human capital means a lot of investment but still it is
recommended. A budget of almost 3500 Euros and a period of 3 months will act as quite
effective for the application of this process.
Review
Whenever there is an investment the need of feedback is quite high. The best way to get to
know how the strategies work is to implement it on peer-to-peer basis (Kratz and Strasser,
2015). The organization should incorporate their employees to reflect out the best possible
feedback. It will be quite beneficial for the employees too because they will get the real life
experience of the strategies implemented. Various people will have various points of view;
everything should be taken into account and an average should be done to find the
outcome.
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Part 3: Legislation and Ethics in Travel and Tourism (500 words)
P7. Explore specific legislation that organisations in the travel and tourism industry
have to adhere to
Tourism Legislation refers to a set of specific rules and regulations, which are followed by
the travelling industries. These laws are made in order to regulate the work of travel and
tourism industries. There are some specific legislation that the travel and tourism
organisations must follow in order to earn good business profit and to create a brand
reputation. These are: “Employment Rights Act 1996”
This act gives rights to the employees regarding leaves for maternity, paternity and
others. Moreover, this act also allows an employee to demand for proper justification
for dismissal from jobs.
 “Working Time Regulation 1998”
This act deals about the maximum hours that a company can ask its employee to
work. This act is applicable to all the workers and employees irrespective of the type
of organisation. It also tells about stipulated time for taking breaks during work on
daily basis.
 “The National Minimum Wage Act, 1998”
It says that the workers must be paid on per hour basis. This law is beneficial for both
the company as well as the employees. It is an important act in context to
measurement of an employee’s performance.
 “The Health and Safety Act Work, 1974”
It tells about the health and safety of the employees at their workplace. It is the
responsibility of the organisation to make their employees learn about safety at work
place during their trainings.
The above-mentioned legislations are the basic laws, which a travelling industry must follow
in order to gain public trust and faith on them. Once a travelling industry gains the social
trust, it becomes very easy for them to do marketing business (Paraskou, and George,
2017.).
P8. Using specific examples, illustrate how company, employment and contract law
has a potential impact on business decision-making in the travel and tourism
industry.
A contract is legal documentary relationship between two or more than two parties in
exchange of goods or services, which are made on behalf of certain government laws. When
a party fails to work in accordance with the contract, the other party or parties have the full
right to take any legal action against that party. Decision-making is the process of choosing a
particular decision depending upon the current scenario of the company in context to
profitability. For the study, selected organisation is Thomas cook ltd. The employees of this
company have a very good relationship with the organisation. Under the Employment
Rights Act 1996, the company must provide their workers flexibility in working. In case of
any conflict between their employees, the company cannot suddenly fire an employee
without providing proper justification. Moreover, the company treats all of their employees
equally irrespective of their caste, religion, gender and others, under the act of
Discrimination Act, 1975. Under National Minimum Wage Act, 1998, Thomas Cook offer
higher salaries to their employees in comparison to other companies of the same domain.
The company offers frequent incentives to their employees depending upon their works.
Moreover, the company also sometimes sponsors their employees’ free travelling and tours
in order to have employee satisfaction (Gmelch and Kaul, 2018).
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Conclusion
In the above study, the focus is laid upon maximising the production of Thomas Cook Group
PLC, which is directly proportional to the annual turnover of the organization. In the initial
stages of the study, various accounting concept is taken into play and is aligned with the
organization to examine how the organization will do on application of these concepts. Apart
from that, various HR policies are also stretched and their efficiency is tested when applied
in Thomas Cook Group PLC. In the later part of the study, various legislations that the
organization needs to follow are also evaluated and examined.
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Reference List
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Nagle, T.T. and Müller, G., 2017. The strategy and tactics of pricing: A guide to growing
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Paraskou, A. and George, B.P., 2017. The market for reproductive tourism: an analysis with
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Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P.,
Johns, R., O'Leary, P., Robinson, J. and Plimmer, G., 2015. Managing employee
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Wildavsky, A., 2017. Budgeting and governing. Routledge
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