Tour Operation Management Report: Analysis of TUI Group's Strategies

This report provides a comprehensive analysis of tour operation management within the travel and tourism sector, specifically focusing on the TUI Group. It begins by outlining the stages and timescales involved in developing holiday packages, emphasizing research, evidence gathering, cost analysis, service provider arrangements, legal compliance, promotional strategies, implementation, evaluation, and modification. The report then delves into the suitability of different contracting methods for various holiday components, such as fixed contracts and sales-only contracts. A detailed calculation of a holiday's selling price is presented, incorporating fixed and variable costs. The report further explores brochure design, evaluating both traditional and modern approaches, and assessing distribution methods. Finally, it examines strategic and tactical decision-making processes within tour operations, offering insights into how companies like TUI Group can adapt to different situations and maintain a competitive edge in the industry.

Tour Operation Management
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Table of Contents
Introduction................................................................................................................................3
Task 1 - Poster............................................................................................................................4
Task 2.........................................................................................................................................5
2.1) Assess the stages and timescales involved in developing holidays....................................5
2.2) Suitability of different methods of contracting for different components of the holiday
and different types of tour operator............................................................................................7
2.3) Calculate the selling price of a holiday from given information below. ............................8
Task 3 ......................................................................................................................................10
3.1) the planning decisions taken for the design of a selected brochure: ................................10
3.2) Assess suitability of Traditional brochure option available to tour operators of “TUI
Group” and Thomas Crook and appropriate brochure for “TUI Group”:................................11
3.3) Evaluate the 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.13
Task 4 ......................................................................................................................................15
4.1) the strategic decisions made by different types of tour operator:.....................................15
4.2) Compare the tactical decisions that could be taken by a selected tour operator in different
situations:.................................................................................................................................16
Conclusion................................................................................................................................19
References................................................................................................................................20

Introduction
This report helps in investigating the tour operators industry of the travel and tourism sector.
It also includes different type of operators and products and services offered by them. It
explores stages involved in creating a holiday package and determining selling price of the
holiday package. This report also discusses the role of modern advertisement tool and a
comparison between modern and traditional advertisement tool used by the tour operators.
This report also explain the strategic decision making and tactical decision making taken by
the tour operators to establishes them in the industry for the long time period.
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Task 1 - Poster

Task 2
I am working as tour operator for “TUI Group” of London, UK. I have prepared a report of
organizing sightseeing tour for a group of 45 Chinese students. The tour is organising from
London, UK to Paris, France. It is a 5day tourist plan. The tour plan is for summer vacation in
August 2018.
2.1) Assess the stages and timescales involved in developing holidays
Following stages are involved in developing holidays:
Research: London and Paris differs politically , socially, economically and legally
from China thus as a tour operator I need to research every aspect for the tourists
students from China. I have involved the most attraction places in London and Paris
like La Villette Park; Canal sent Martin, Eifel Tower, and Montmartre etc of Paris,
France (Filby, Stockin & Scarpaci, 2015) because the students from different country
leads to increase the country's tourists income so their satisfaction is very valuable
and thus this stage of research has vital role.
1. Conducting research- Research is one of the important part in tour operation
management. Because there are various factors which can influenced tourism
business favourable and unfavourable. Therefore, TUI Group required that to
conduct research which can help to identifying these factors and overcome
potential risk. Apart form that, it can also help to determining of needs and
customer expectation, so that they can make their products accordingly.
2. Gathering Evidences- As a tour operator after taking into account all the-
research above, I will gather the evidences to make the tour successful and
attractive. The plans should not be built on assumptions or limited knowledge
because there is a good saying that incomplete knowledge is more dangerous
than no knowledge because it could lead to disaster. These evidences includes
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all the details related to well managed service providers, tourists guide, legal
authorities, reputed hotel services,
3. Packaging Cost Analysis -After whole research and gathering evidence, the
other step is to analyse the packaging cost as per the tourist plan and the
consumer need. Tourist group need to deal with various consumers of different
status and it is the responsibility of group to satisfy each consumer
requirement. Therefore, tour operator should have the various plans to satisfy
the consumer requirement with regard to their financial status and their
expenditure capability.
4. Arrangements and negotiating service providers: For sightseeing in
London and According to my plan I will start the tour package from London. I
will make arrangements for flight tickets from china to London for the group
members and assembled at hotel near by airport. The whole group assembled
there at night and then in departure for Paris from there. I have made all the
arrangements for their living at the hotel. For travelling purpose I will hire a
50 seat Luxury bus from bus service provider. There will be a tour guide also.
I made negotiations with the service providers. All the arrangements for
staying will be made in Hotel St Michelle of Paris by us for the whole plan
prepared keeping in mind that the whole group of student received full
satisfaction with the services provided by us. We are only make arrangements
as per the requirement of group. As a tour operator, I also required to identify
the alternative destinations because the emergency factors like climate change
and other environmental changes could lead to spoil the pre-determined plans
and can lead to various complaints from the tourists as time and money is
precious for them. Thus it would lead to effect the goodwill of the 'TUI' Group
and my reputation as the tour operator.
5. Fulfil legal requirement: I will also make arrangements as per the legal
regulations applicable on tour operators. I will make arrangements for Air
Travel Organizer Licence (ATOL) which is managed by CAA in UK , internal
visas and make other arrangement for the Paris tour which is applicable as
perlaw (Applegate, Bixby & Chvátal, 2009), so that the students need not go
through mental hazard during tourism after reaching the destination. All the

preventive measures should also be kept in mind for any unwanted incidence
like loss of passport, visa etc. because the tourists at new place have no idea
about legal procedures and requirements at this stage. It is the duty of the tour
operator to confirm the safety and security to maintain its goodwill.
6. Promotion Strategies- In this stage where marketing manager is required to
use a suitable promotional strategies which can help to promote their products
effectively.
7. Implementation- This is a very important stage where all the all the above
strategies and stages are implied in the most effective and efficient manner.
There is no use of above research if they are not implemented in the same
manner.
8. Evaluation and control- After the stage of implementation is successfully
done. It is very important that it has to be evaluated properly so that no
loopholes should be left and proper control should be established so that
examination of the implementation can be done step-wise.
9. Modification- This is the final stage where the data collected in evaluation
stage is processed and if there is any issue it should be modified and
references for the future should taken so that in any next process TUI group
don't have to face such issue in future.
Timescale
Stages Time required
1. Conducting research- 2 months
2. Gathering Evidences 1 month
3 Packaging Cost Analysis 15 days
4. Arrangements and negotiating service 15 days
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providers:
5. Fulfil legal requirement 1 month
6. Promotion Strategies 2-3 months
7. Implementation 15 days
8. Evaluation and control 1 month
9. Modification 1 month
2.2) Suitability of different methods of contracting for different
components of the holiday and different types of tour operator
There are many parties involved in this tour plan like travelling agencies arranging flight
tickets for the whole group, Bus service provider, Tour Guide and hotel. There are different
types of contract options available with us we can make contract as per the nature of party
and requirement. Once negotiation is done company is required to make contract with their
different suppliers and service providers. The contract options available to us are as follows:
Fixed contract: In this type of contract, companies are focused on the maximum revenue
collection in the peak time. Such kinds of contract are help in the volume based capacity
which is more concentrate on the maximum utilization of capacity. TUI group requires that in
the session time. But in the situation when the numbers of customer are law, company faces
financial looses.

Sale only contract: This is another approach which can be used in the off season and
especially for the selected or niche customer segment. Such kinds of contract are highly
expensive for the company and customised for the premium customers.
Once careful analyses of both approaches are done then the company is required to determine
the pros and cons of both method and take corrective decisions at the pre decided level.
2.3) Calculate the selling price of a holiday from given information
below.
Travelling agency has established network with partners in France and prepare a plan which
provides selling rate of the holiday package as a whole and for each student.
Calculation of selling rate of the holiday package:
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The above table shows the whole calculations of selling price where fixed cost remain
unchanged and variable cost is the cost which is directly proportionate to number of
students in the package, i.e. it varies with number and increasing as well as decreases
proportionately. Since, we need to calculate the selling price in pounds, therefore, the
variable cost in Euros need to be converted into pounds first then direct cost need to be
added . Direct cost is the cost which is directly related with the product cost, which does not
change with the change in no of students’ up to the certain level. As per the above
calculation sheet company are expecting 20% profit margin form it.
Cost per student=511.44 Pounds
Cost Calculation Amount
cost of rooms 45*54*5 € 1215
cost of BB 12*45*4
€
2,160.00
Total variable cost
€
14310
1euro=0.9pounds
variable cost in pounds 8370*0.9
£
12879
cost of bus
£
5,400.00
cost of guide
£
900.00
total cost of tour £ 19179
add: profit margin 20%
£
3835.8
total sales price of tour
£
23014.8
number of students is 45
price per student will be 511.44

Task 3
As a tour operator of “TUI Group” London I am working with the marketing department of
my company for assessing the different strategy used for selling tour packages by company
and planning for designing an attractive brochure.
3.1) the planning decisions taken for the design of a selected
brochure:
Brochure is used as advertisement tool in tourism industry. It can be used as off line and on
line tool for conveying information regarding the attractive tour packages and selling prices
of tour packages to consumers. We are planning here to develop an attracting brochure for
new tour packages because brochures having many advantages like it has low cost, high
reach to the large group of customers, brochure can solve quarry regarding the product of
company, provide the channel where people can get more information about the product and
give information to people if any attractive offer made by the company. For designing new
brochure proper search and planning is required.
Factors to be considered for planning related issues: Issues like structure of brochure,
objective of brochure, matters involve in brochure, type of customers and time scales are
needed to be considered while planning for brochure. Planning for a brochure design involves
following steps:
1) Decide budget for brochure design: Before starting planning a budget should be
designed so that all cost can be controlled.
2) Objectives: Decide the objective for which the brochure is designing. We have to
decide our target customers so that designing of brochure becomes easy.
3) Target Customer: decide the group of customers should be targeted by the brochure.
4) Collection of samples: For starting planning for brochure started collecting different
samples of brochures. Collecting those designs which are preferred mostly in the
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industry and collect information about the style, language graphics etc are used in that
brochures and then select a suitable.
5) Decide format: Second step is design a format that how the brochure will look like
and what will be the colour scheme of the brochure and also ensures that the format
should not be matched with the brochures of other tour operators.
6) Draft Matter: Draft the matter which is going to present in brochure. It should be
considered that matter should be small but includes whole information about the
services of tour operate.
7) Fixing time period: Fix a time period for brochure designing so that it will complete
on time.
All these steps are followed in designing brochure for “TUI Group” this will result an
effective brochure design for the consumers (Tricoire, Graf & Gutjahr, 2012).
3.2) Assess suitability of Traditional brochure option available to tour
operators of “TUI Group” and Thomas Crook and appropriate
brochure for “TUI Group”:
Traditional offline Brochure option is also available to with the both organisations “TUI
Group” and “Thomas Crook” of tourism sector. With the advancement of technology
Thomas Cook group modernise its advertisements strategy and change their medium from
traditional brochure to E- brochure. E- Brochure designs are more benefited then traditional
brochure printing which includes:
1) E- Brochures are flexible marketing tool than traditional brochures because we can
choose and design our e-brochure as we like but it is not possible with printed
brochures.
2) E- Brochures are time effective than traditional printed brochures because they can
easily be available at any place and at any time.