Tour Operations Management Report: TUI and Consumer Demand Analysis

This report provides a comprehensive analysis of tour operations management, focusing on the roles and functions of tour operators, the scale and structure of the tour operating industry, and the various stages involved in creating holiday packages. The report uses Thomson Holidays TUI as a case study, examining topics such as inbound, outbound, and domestic tour operators, as well as ground operators. It also delves into strategies for forecasting changes in consumer demand, considering environmental and economic effects. Furthermore, the report explores the different stages in the creation of holiday packages, including direct and indirect channels. Finally, it examines strategic and tactical decision-making within tour operations, offering insights into how businesses can adapt to changing market conditions and consumer preferences.

TOUR OPERATIONS
MANAGEMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1 ...........................................................................................................................................3
P1 The different roles and functions of range tour operator.......................................................3
P2 The scale and structure of the tour operating industry...........................................................5
TASK 2 ...........................................................................................................................................6
P3 The different stages in creation of holiday package for different tour operator
requirements................................................................................................................................6
P4 Determine and forecast changes in consumer demand using different sources of research.. 7
TASK 3 ...........................................................................................................................................9
P5 Reviewing the content of range of package tour programmes which serve a similar product
market..........................................................................................................................................9
P6 Explore examples of strategic and tactical decision-making in tour operations..................10
CONCLUSION .............................................................................................................................11

INTRODUCTION
Travel and tourism is one of the fastest growing industry in UK. Major focus of this type
of industry is to attract large number of tourist so that overall development of the economy is
increased. Tour operation is concerned with managing and controlling the activities of tour in the
best possible manner. Major focus of these organisations in this type of industry is emphasised
on providing attractive package tour to their customer's(Archer and Syratt, 2012). By doing this
organisation aims at increasing the revenue and profitability of the whole industry in systematic
manner. The organisation chosen for this report is Thomson Holidays TUI which is established
in 1965. the headquarter of this organisation is situated in Luton England. Major topics covered
in this report are roles and functions of tour operator, explanation of scale and structure of tour
operating industry and various stages in the creation of holiday package. Appropriate techniques
for forecasting the changes in consumer demand will be also be covered in this report. With the
help of this organisation will be able to take better decisions for the providing better services to
customer's.
TASK 1
P1 The different roles and functions of range tour operator.
Tour operator combines travel and tour elements and make a holiday package. They
provide brochures and promote their products and holiday packages. A tour operator is a person
who controls entire trip . They also make a different holiday packages by combining all the
components like restaurants,hotel, tours, airports and so on. Basically tour operator create a tour
package and sell directly to the customer(Brown and Bessant, 2013). There are various types of
tour operator given as follows :-
Inbound tour operators :- The operators who have tourist and visitors and manage all
the arrangements in the host nation are known as inbound tour operators. These type of tour
operators develop tour package by cooperate with outside tour operators or individually. The
packages are sell directly to the customers or by the help of intermediaries. Inbound tour
operators also earn foreign exchange for the host country. These tour operators perform various
functions that are as follows :-

 Inbound tour operators develop tour packages individually or by cooperate with overseas
tour operators
 These tour also contribute foreign income to the economic system of host nation. It is
essential role which performed by inbound tour operators.
Outbound tour operators :- These type of tour operators are the professional players in
creating and promoting multi-national tours mainly in the outside countries. These operators
offers tour packages to groups and individual of their own country or multiple countries for a
particular decided time period(Caber and Albayrak, 2014). The outbound tour operators manage
all the important tour documents, conveyance to a central location from where the journey starts.
There are various functions that are performed by outbound tour operators are as follows :-
 These tour operators perform their task in cooperation with the ground operators and
inbound tour operators and provide services.
 These operators arrange all the documents of tour and conveyance properly so that
travellers are free from such type of tensions.
Domestic tour operators :- This type of tour operators run within the geographical
boundary of its own country and also fulfil the various needs of group as well as individual
tourists. They also promoting various tour packages by the help of different travel agents as well
as own outlets. There are various function that is performed by domestic tour operators are as
follows :-
 This type of operators provide effective travel services to the travellers inside the
tourist home country.
 Domestic tour operators also promotes various tour packages by offering tour
packages to the different tourist(Carson and Carson, 2011).
Ground operators :- Ground operators are basically deal with the land arrangements at a
specific destination. A role of agency is played by ground operators who arrange tour for the
incoming travellers on the place of abroad operators. There are some functions of ground
operators are as follows :-
 These operators deal with the land arrangement for the tourist on the place of overseas
operators.
 Ground tour operators helps in negotiation with different vendors because they have
contact with the suppliers and local dealers.

P2 The scale and structure of the tour operating industry.
Travel and tourism industry is one of the fastest growing industry all over the world.
This is because large number of tourist are attracted towards this type of industry. The operations
of tour operating industry are carried out on large scale. Needs and preferences of customer's in
this type of industry is uncertain, so it becomes essential for organisations to implement
innovative strategies so that their needs are satisfied. This type of industry also helps the
economy in providing various kinds of job opportunities to the individuals. Travel and tourism
industry is one of the significant developing sector(Donkor and et. al., 2012). This is because
major changes have taken place for its overall growth and development. Industry focuses on
providing wide range of services to its customer's so that there needs are fulfilled.
Structure of Tour Operating industry
Attractions:The operations of travel industry are mainly decided for attracting large
number of customer's in the best possible manner. Plans and strategies can be made for affecting
the choice of customer's in a positive manner. Major focus of this to maintain value in the mind
of customer's at positive level. Major factors included in this are related to different shape, size
and quality of product which can be offered by TUI.
Tour operators: The operations and tourism industry can be maintained by preparing
attractive package for holiday for the customer's. Better transportation and accommodation
services can be provided to customer's so that they are able to get better experience. If the
customer make plans for purchasing these services in bulk than discount offers can be provided
to them so that they are able to save cost. TUI can make special holiday package as per demand
of customer's of a particular area(Filimonau and et. al., 2013).
Transport: Plans and strategies can also be made by the organisation for providing better
transportation facilities to there customer's. TUI can provide transportation to customer's so that
they do not face any kind of difficulty in travelling from one place to another. If the organisation
is successful in proving these facilities to customer's than chances of shift in customer's to
another organisation will be reduced. As there need and demand will be fulfilled in the best
possible manner.
Tourism development: Major development are also required in this travel and tourism
industry because requirements of customer's are uncertain. TUI can provide attractive salary to
its employees so that they are able to perform in a efficient manner. Employee's will also

contribute in providing new and innovative ideas for the overall growth and development of the
organisation.
TASK 2
P3 The different stages in creation of holiday package for different tour operator requirements.
Creation of appropriate holiday package is very much essential for the tour operator as
with the help of this large number of customer's can be attracted towards the services of
organisation. As if customer's are offered attractive packages than their unlimited needs and
demand will be fulfilled within limited period of time. Holiday package are generally planned
and created after gathering relevant information about the recent trends and demand of the
customer's. This can be done by analysing the current and past situation of the market in
systematic and coordinated manner(Grant, Trautrims and Wong, 2017). The management of
TUI focuses on using strategic approach for providing its services to the customer's. In in this
approach each and activity will be planned after analysing the current situation. Nee and
innovative techniques will be implemented in systematic approach. With the help of attractive
holiday package TUI aims at maintaining better relationship with its suppliers and customer's. As
these packages helps in fulfilling their need and preferences in the best possible manner. The
various stages in formation of holiday package are discussed below-
Direct channels: This is concerned with directly selling the products and services to
customer's without any issues and problems. Direct channels are flexible in nature because
changes in the strategies can be done as per current demand of customer's. With the help of this
method management of TUI manages in gathering feedback from tourist and are able to promote
their services in the best possible manner.
Indirect channels: In this type of channel organisations are not allowed to directly
contact and communicate with other mediators. This method is quite expensive and complicated
because with the help of this goals and objectives of the organisation will be difficult to
achieved. Chances of mismanagement and miscommunication is increased because appropriate
information is not transferred to final customer's.
The management of TUI aims at using direct channel for communicating any vital
information to the suppliers and tourist. With the help of direct channel organisation will be able
to make effective package for holiday. Since the competition level in this type of industry is very

high so direct channel will help TUI in giving tough competition to its competitors. TUI can
easily solve problems and overcome challenges if the focus in emphasised on using this type of
channel. This will directly lead to increase in sale, profitability and revenue of TUI because
customer's will be able to satisfy there needs and wants(Heitmann, 2011). Plans and strategies
can be made for using latest tools and techniques related to direct channel. Brand image of TUI
will be directly increased if the management of organisation is able to create effective holiday
package for its suppliers and potential customer's. This will also lead in fulfilling the
requirements of various individuals associated with the organisation. By using the stages of
holiday package creation organisation will be able to sustain in the market for longer period of
time.
P4 Determine and forecast changes in consumer demand using different sources of research.
The need and demands in this type of industry is uncertain in nature. Major changes in
Travel industry takes place because of uncertain environmental conditions. This problem can be
solved by using appropriate techniques of research. But these sources have its own advantages
and disadvantages which can cause problem for the management of TUI(Hoarau and Kline,
2014). Major changes can be implemented by the organisation so that chances of challenges and
problems is reduced. Some among the major changes are discussed below-
Environmental effects: This type of effect is very much harmful for every individuals so
it is necessary to implement strategies for protecting the natural environment in the efficient
manner. Due to this factor the management of TUI faces some challenges which are-
Positive: In some situation organisation can easily promote its product and services
related to tour operating. Appropriate promotional techniques can be used in the effective and
efficient manner. This will lead in increasing the sale and profitability of the organisation.
Negative: Due to improper functioning of natural environment some cultural factors can be
directly affected. These includes mismanagement in water supply and inappropriate use of
cultural heritage. Tour operating sector can also gets affected by different kinds of pollution and
traffic related problems(Lovrić and Vervest, 2013).
Economic effects: Any change in this factor directly affects the economical condition in
the negative and positive manner. It affects the profit and revenue of TUI in negative manner. Its
positive and negative impact is mentioned below-

Positive: If appropriate set of polices and strategies are made by the organisation than
better services can be offered by TUI. If customer's of organisation are able to spend better time
in these type of industries than it will directly lays a positive impact on the economic situation.
Negative: If there is any change in the pricing policy of tour operating industry than
customer's need and demand can also be affected. There are many organisations which aims at
charging high prices form its customer's in order to increase there profitability. But this strategy
lays a negative impact on customer's because strategies may not be implemented as per the
paying capabilities of visitors. This can lead to negative impact on working of TUI as there sales
can be decreased(Lovelock and Patterson, 2015).
Social effects: This factor also affects functioning of tourism industry in negative as well
as positive manner. If the organisation is not able to implement strategies as per values of
customer's than they will not be satisfied with its services. To overcome this problem TUI
focuses on using innovative techniques so that better use of opportunities can be done. Its
positive and negative impact is mentioned below-
Positive: The management of organisation can focus on developing and implementing
tourism pride so that better interaction with the customer's is done.
Negative: The mindset of customer's can negatively get affected if a particular place is
crowded. If there is high chances of crime and unethical activities than customer's might not get
attracted towards the services of TUI. If this factor is not taken into consideration by the
management of organisation than its business can be negatively affected.
It becomes essential for the organisation to implement better techniques for reducing
negative impact of competition level. By doing this they will be able to fulfil the need and
demand of potential customer's(Pomering, Noble and Johnson, 2011). This is because new and
effective decisions will be taken for overcoming any problematic situation.
TASK 3
P5 Reviewing the content of range of package tour programmes which serve a similar product
market.
Brochure is used by various tour operators for providing appropriate information to large
number of customer's. This tool is basically used to provide adequate information to customer's
with the motive of sale and profitability of the organisation. Tour operator can easily connect

with large number of customer's if effective techniques are used in preparing a brochure. The
management of TUI focuses on using online and traditional brochure method for getting positive
results within limited period of time(Pullman and Rodgers, 2010). Both these methods are
briefly discussed below-
Traditional brochure
It is the professional document which generally contains information and pictures related
to the subject. The major motive behind preparing brochure is to identify and fulfil the need of
customer's in a attractive and innovative manner. As in this relevant information can be
transferred to customer's for the fulfilment of unlimited needs.
Online Brochures:
It is considered as one of the attractive and innovative tool in seeking attention of the
potential customer's. Online brochure is very much different form traditional brochure because
various new methods are used in preparing this. With the help of this organisation can easily
attain competitive advantage within limited period of time. This is because customer's can make
changes in this type of brochure as per there need and desire. If the management of TUI is
successful in using this than time and cost of organisation can be easily saved.
TUI will be required to implement better and excellent services so that they are able to
give tough competition to the market(Shank and Lyberger, 2014). With the help of this attractive
and adventurous packages can be offered to customer's for improving current situation of the
organisation. Brand image and sale of TUI can be increased if both of these methods are used for
attracting wide range of customer's. Competitors of TUI are using online and traditional brochure
technique for enhancing there business in the best possible manner. So the management of
organisation can also plan and implement these type of strategies for the betterment of there
business. Major changes in the working structure can be made after comparing current and past
situation by the organisation.
Both traditional and online brochure can be used for providing luxurious services to customer's.
As with the help of this customer's will be able to easily identify new features which are imposed
by the organisation. Online brochure is a less costly process so it will save resources of TUI and
will lead to high profitability. Customer's will be able to get luxurious experience because
relevant information will be provided by the organisation for the increase of there overall
performance and experience(Stevenson and Sum, 2014). With the help of online brochure

chances of loss and failure for the organisation will be decreased. This is because new and better
techniques will be used by the for increasing the business and sustainability of TUI.
P6 Explore examples of strategic and tactical decision-making in tour operations.
The management of TUI is planning to take better decisions for formulating better
strategies for the future course of action. This will directly lead in increasing the business at the
international and global market. Management is planning to use tactical pricing, marketing and
planning techniques for managing each and every work of organisation in the best possible
manner. These approaches will help the organisation in taking better decisions for the future
course of action. Some of the major techniques are briefly discussed below-
Tactical Response: It is defined as the actions which are taken for solving and
overcoming some specific situations in the market. With the help of this organisation will be able
to lay positive impact on management of overall situation. The management of TUI can plan to
gather feedback form customer's for the improving their sale and business within limited period
of time. This will also help in improving relationship between customer and organisation.
Tactical pricing: Management of TUI can also plan for taking tactical decisions as per
the internal and external environment. Price in this can be set as per the strategies of competitors
as by doing this large number of competitors can be attracted by the organisation. Decisions for
the tactical pricing can also be taken after analysing the economical condition and paying
capabilities of customer's. By doing this organisation will be able get better and positive response
from potential customer's(Treyz, 2013).
Distribution channel:
Two types of distribution channel can be used by the management of TUI for providing better
services to customer's. This is direct and indirect distribution channel can be used by the
organisation for increasing the business of TUI. Communication between the customer's and
employee's can be directly improved because in this each and every task will be properly
managed. If the organisation is unable to use direct and indirect channel of distribution than
chances of loss and failure for the organisation will be increased.
Product choice:
Product in this type of industry are known as the packages which are servied to final
customer's for satisfying there need and desire. Major focus of the organisation is to make
attractive package so that customer's can have better experience. Management of TUI also

focuses on formulating luxurious and adventurous packages so that customer's are attracted
within limited period of time.
Image positioning and branding:
These two terms are very much essential because it helps in company in maintaining the
competition level. This is because if TUI is able to maintain its brand image than better
competition can be given to competitors. Plans for maintaining brand image can be taken after
gathering relevant and vital information.
Surcharge policy:
In this type of pricing policy management of the organisation tries to charge high price in
particular period of time. This is usually done to increase the sale and reveue of organisation. As
if the demand for particualr product is high in a season than TUI will be able to earn high profit.
This will not only benefit organisation but will also help customer's in getting maximum
satisfaction.
Cheap value:
It is concerned with reducing the price of product if the organisation is new in a particular
type of industry. With the help of this strategy TUI can lower the price of its products so that
large number of customer's are attracted this will increase the market share of organisation.
With the help of these factors important and vital decisions can be taken for achieving
positive result in the organisation. Large number of customer's can also be retained of decisions
are taken as per need and requirements of customer's.
CONCLUSION
From the above given report it has been concluded that travel and tourism industry plays
a very crucial role in overall development of the economy. Tour operator of any organisation
needs to follow and implement different functions for the achievement of targeted goals and
objectives. The structure of tour operating industry is very wide so it becomes essentials for
organisations plan the activities as per the current situation of market. Organisations in this type
of industry also needs to implement various stages of holiday package formation so that
customer's need and demand are fulfilled within limited period of time. Various forecasting
techniques can also be used for researching future demand of customer in travel and tourism
industry. This will directly lead to achievement of goals and objectives in the efficient and
effective manner.

REFERENCES
Books and Journals
Archer, J. and Syratt, G., 2012. Manual of travel agency practice. Routledge.
Brown, S. and Bessant, J., 2013. Strategic operations management. Routledge.
Caber, M. and Albayrak, T., 2014. Does the importance of hotel attributes differ for senior
tourists? A comparison of three markets. International Journal of Contemporary
Hospitality Management. 26(4). pp.610-628.
Carson, D.A. and Carson, D.B., 2011. Why tourism may not be everybody’s business: the
challenge of tradition in resource peripheries. The Rangeland Journal. 33(4). pp.373-
383.
Donkor, E.A., and et. al., 2012. Urban water demand forecasting: review of methods and models.
Journal of Water Resources Planning and Management. 140(2). pp.146-159.
Filimonau, V., and et. al., 2013. The role of ‘indirect’greenhouse gas emissions in tourism:
Assessing the hidden carbon impacts from a holiday package tour. Transportation
Research Part A: Policy and Practice. 54. pp.78-91.
Grant, D.B., Trautrims, A. and Wong, C.Y., 2017. Sustainable logistics and supply chain
management: principles and practices for sustainable operations and management.
Kogan Page Publishers.
Heitmann, S., 2011. Tourist behaviour and tourism motivation. Research themes for tourism,
pp.31-44.
Hoarau, H. and Kline, C., 2014. Science and industry: Sharing knowledge for innovation. Annals
of Tourism Research. 46. pp.44-61.
Lovelock, C. and Patterson, P., 2015. Services marketing. Pearson Australia.
Lovrić, M., Li, T. and Vervest, P., 2013. Sustainable revenue management: A smart card enabled
agent-based modeling approach. Decision Support Systems. 54(4). pp.1587-1601.
Pomering, A., Noble, G. and Johnson, L.W., 2011. Conceptualising a contemporary marketing
mix for sustainable tourism. Journal of Sustainable Tourism. 19(8). pp.953-969.
Pullman, M. and Rodgers, S., 2010. Capacity management for hospitality and tourism: A review
of current approaches. International journal of hospitality management. 29(1).pp.177-
187.
Shank, M.D. and Lyberger, M.R., 2014. Sports marketing: A strategic perspective. Routledge.
Stevenson, W.J. and Sum, C.C., 2014. Operations management. McGraw-Hill Education.
Treyz, G.I., 2013. Regional economic modeling: A systematic approach to economic forecasting
and policy analysis. Springer Science & Business Media.