Analysis of Revenue Management, HR, and Legal Aspects in Thomas Cook

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The Travel and Tourism Business Toolkit
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Table of Contents
Introduction...................................................................................................................... 3
Part 1: Sales, Budget and Revenue Management...........................................................4
Part 2: HR Life Cycle and Human Resource Strategy.....................................................8
Part 3: Legislation and Ethics in Travel and Tourism.....................................................13
Conclusion..................................................................................................................... 16
Reference List................................................................................................................ 17
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Introduction
The travel and tourism sector is one of the industries, which has been growing at a swift pace all
across the globe. Along with the consistent development, there has been continuous
transformation in the demands and requirements of the travellers, which the tourism companies
have to address, in order to provide quality services. This is done through implementation of
various kinds of business tool kits. In this study, the different tool kits implemented by the global
tourism organisation, Thomas Cook Group Plc will be investigated and discussed. Apart from
that, the legislations and ethics related to the sector of tourism will also be explored, to which
the company mentioned above have to adhere.
“Thomas Cook AG” and “MyTravel Group Plc” were merged in the year 2007 and a new
organisation was formed, which came to be known as “Thomas Cook Group Plc
“(Thomascook.com, 2019). The headquarters of the organisation is located in London and
provides tourism as well as hospitality services all across the world. It has over than twenty
thousand employees and has generates over than seven thousand million pounds in 2018
(Thomascookgroup.com, 2019).
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Part 1: Sales, Budget and Revenue Management
Discuss the rationale and principles of revenue management for the travel and tourism
industry.
The section will deal with the evaluation of principles of revenue management for Thomas
Cook UK. Revenue Management deals with the methods to improve revenue for an
organization by fixing appropriate prices for their services regarding travel and tourism. There
are several methods for generating more revenue for Thomas Cook. The company should
conduct market research and use proper segmentation method. The segmentation will enable
the company to understand the various types of customers and their needs. It is evident that
there are two types of customers, such as leisure travellers and business travellers. Thomas
Cook should use market experts to help it fixing price for both of these segments. It is very
natural for leisure tourists to demand discounts for their package. Therefore, the company
should charge less money from these people and make costlier packages for travellers who are
taking their services for official purposes (Webb, 2016).
Overbooking is a very effective way of generating more revenues. The main target of
overbooking is to take full advantage of the capacity of hotels, inns and other services the
company offers. There are few advantages of overbooking. The capacity is gets a stretch and
the company can accept bookings in future. The customers have the advantage of cancelling
their bookings. The charge of rejecting service to customers gets an adjustment from other
customers, who will use those services if available. Dynamic pricing or peak to peak pricing is
also a great method for generating more revenue, as it allows the company to allocate prices
according to the season (Sierag et al., 2015).
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Investigate how you could apply the revenue management tools in your travel and
tourism organisation to generate and maximise profit.
Revenue management tools are very necessary for Thomas Cook to have an edge on the
competition in travel industry. These tools can help in generating a lot of profit for the
organization. AIRRM is a very effective tool made by Accleya group. This tool helps in
forecasting the market condition and the calculation becomes flawless by using models, which
has data of many years of this business. It uses “Look to Book” ratios and inventory strategies
to predict the revenue outcome. This software is proving to be very competent for optimizing
every opportunity to gain revenue, leveraging numerous inventory controls and proper
assessment of market influence (revenuemanagement.com, 2019).
OUTPERFORM RMS is very effective software, which can help Thomas Cook to generate more
profit for it. The software is ideal for managing the accommodation section of the company. This
software uses state of the art algorithm, analysis of competition, price optimization, analysis of
ongoing trends and several other features. It will increase the revenue of Thomas Cook by 25
percent and will save 75 percent of operational costs and time. This software will put Thomas
Cook much more ahead than its competitors because they will be able to generate more
revenue than before and break previous records (outperform-rms.com, 2019).
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Explore the different types of financial statements and reporting mechanism for
organisation within the travel and tourism industry.
A financial statement helps a company to evaluate various economical figures relating to the
organization. Thomas Cook mainly uses a few types of financial statements. Income statement
gives away the profitability of the organization’s business. This is very crucial for making the
financial reporting for Thomas Cook. The income statement in general points out the difference
in revenue and expense of the company. The revenue and expense actually depends on
operating and dysfunctional activities of Thomas Cook (bdc.ca, 2019). This can give away the
revenue for Thomas Cook over a period.
Balance Sheets are also a part of a financial statement. It includes factors like assets, debts
and liabilities. It actually gives away the economical position of Thomas Cook in a specific time.
They usually calculate the balance sheet after 6 months or a quarter. A balance sheet is very
important for Thomas Cook to know about the condition of the resources they own by reviewing
their assets. The liabilities can get a proper evaluation and they can understand the amount of
money they need to repay debts of creditors. The cash flow statement gives figures relating
cash generation and spending of cash in Thomas Cook. This statement acts like a connecter
between both income statement and balance sheet. It deals with operating, financial and
investing activities of this organization (Penman, 2016).
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Explain the importance and value of budgets for controlling business performance and
identifying variances.
The significance of preparing a budget for Thomas Cook is enormous to enhance their
performance in business. Budgeting is necessary to coordinate between various departments in
an organization regarding the use of funds. A proper budget is necessary to implement plans for
meeting objectives of the company. Therefore, a budget, which is impractical will serious issues
in near future while a business operation is in progress. A practical budget enables the company
to think what they can do with that amount of money and points out objectives, which needs
more funds for achieving it. The budget can differ sometimes from the real cost of an operation.
Therefore, variance analysis is very much important to find the reason behind the discrepancy
between those. Variance analysis of financial statements is crucial for maintain control over a
company’s objective and the expenses regarding it (Sponem and Lambert, 2016).
Variance analysis is very much important for reconciliation. It is very usual for a company to fail
in achieving their objective. Therefore, an analysis like this will point out the economic reasons
for failing to reach objectives. It also gives away the losses and errors in a budgeting, which
helps managers to understand the reasons behind their failure. In addition, budgeting helps to
motivate managers by keeping them up to date with the rate of their success, which overall
helps in improving the business performance of the company (Van der Stede, 2015).
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Part 2: HR Life Cycle and Human Resource Strategy
Review the different stages of the HR life cycle applied to a specific travel and tourism
job role in your organisation, and explain their importance for retaining and developing
talent.
Figure 1: HR life cycle
(Source: Hecklau et al., 2016)
The HR life cycle in Thomas Cook is very necessary to retain and develop talent. The company
needs to have attractive policies and offer lucrative packages to attract fresh talents from the
market. They will have to make appropriate policies and use latest methods for hiring
employees. It will enable them to communicate more properly about their company profile
during the interview process and will help them to select people who are capable according to
the company’s job profile. Hiring employees for the company is not enough and Thomas Cook
needs to pay attention in developing their employees. It is necessary for fresh talents to
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participate and enrol themselves in various training programs to sharpen their skills and learn
new ones (Hecklau et al., 2016).
The company should have a proper method for evaluating the performance of employees. This
method will enable them to reward employees with promotions and increments in a fair manner.
This will help Thomas Cook to retain employees in near future, as staffs will be happy to be a
part of this company. Therefore, it is clear that the HR life cycle is very useful when it comes to
the training of fresh talents and retaining them in future.
Develop a performance management plan for the travel and tourism job role chosen,
applying techniques to resolve negative behaviour and to overcome issues of staff
retention.
Executive summary
The performance management plan assists a company to have better performance and
overcome several issues dealing with retention and negative behaviour. The first task dealt with
setting up a goal for the organization related to the issue. The strategy section deals with
creating a strategy with the help of smart objective theory and implementing it on Thomas Cook
to resolve these issues. The amount of money this implementation of plan will require and the
time it will need is justified in the third section and the final section suggests the company to
perform a peer-to-peer review to know about the effects of the plan.
Goals
The goal of Thomas Cook is to eradicate negative behaviour from the company and to deal with
issues regarding staff retention. This will require a proper plan to yield better results.
Strategy
Smart objective is a very effective method in Thomas Cook. The company can specify their
target, which is eradicating negative behaviour and retain staffs by using this method. It also
enables Thomas Cook to measure the progress of the on-going plan and they can predict the
amount of time it will take to finish. This theory gives more value to the objective as it points out
the practicality of the objective and tells if it is achievable or not. Relevancy is a big factor while
achieving a goal and smart objective theory helps the company to regain control over the
situation. It also shows that if they are giving enough effort to achieve the goal or not and points
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out flaws in their methods. Every goal is time bound and therefore this theory allows Thomas
Cook to give importance to long-term goals rather than daily ones (wayne.edu, 2019).
Figure 2: SMART objective method
(Source: wayne.edu, 2019)
Figure 3: Performance management cycle
(Source: valdosta.edu, 2019)
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Another effective method is using performance management cycle. Thomas Cook can
incorporate this theory and eliminate non-positive behaviour and arrest issues of employee
retention. This theory allows a company to identify requirements for performance in future
relating to targets. A good plan should be challenging but it has to achievable. The plan should
let the employee use his or her talents and improve skills in near future. The company should
make a plan in such a way that it align with the companies organizational goals and priorities.
The goals should consider the development factors of an individual or a team. A plan will
become successful only if it is realistic and economical (valdosta.edu, 2019).
The second stage deals with developing the skills of employees. It is necessary for a company
to develop the skills of its employees for them to able to complete tasks in an efficient manner.
This thing is essential for gaining confidence regarding a work and staffs can benefit from this.
Therefore, the companies should send their employees to various workshops relating to their
job profile so they can develop new skills and apply them for the organization. The company
needs performance from employees, otherwise hiring them will have no value. The performance
has a connection with the organizational objective. The performance criteria for every
department are different inside this company. Therefore, the employees should try to follow the
instruction from their respective managers to know what the organization demand from them.
This will give them a clear idea about what they need to do to meet the criteria of the company
(hr.txstate.edu, 2019).
The review or evaluation of the performance is very important. It separates employees with
potential with people who were not up to the mark. The review stage helps the company to
understand if employees are able to meet the objective and target of the company or not. The
review shows that if the plan is effective or not and whether the whole process returns to the
initial stage. The evaluation and performance measuring process should be proper and free of
biasness. The company needs to see if the managers are giving preference to a particular
person due to their personal choice and rewarding them unethically. Therefore, these two
theories can help the company in a great manner and they can easily eliminate any negative
attitude from the company and achieve higher staff retention (Bratton and Gold, 2017).
Time and budget
The implementation of these two theories will take a lot of time and economical support. There
are several stages of application of this plan and includes many people. Therefore, it will require
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quite a lot of time and a substantial amount of money for the plan to become successful. A
budget of 3000 Euros will be enough for this and it will require 12 months to finish.
Review
It is essential to review the effectiveness of these plans. Therefore, the suggestion is to conduct
a peer-to-peer review of this method ( Kratz and Strasser, 2015). The company should include
their employees to conduct this review. It will point out the positive and negative points of these
plans. They will easily get to know the real life impact of these strategies they implemented.
Various people will have different opinions and they can average the result and can have a
conclusion regarding the impact of those plans.
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