Unit 14 Tour Operations Management Travel Tourism Sector

Introduction

Learners will investigate the tour operators industry of the travel and tourism sector, including the different types of operators, their products and services, the scale of the industry and how it has been affected by trends and developments. Management issues will be covered by examining strategic and tactical decision making in order to develop learners’ decision-making skills.
Learners will explore the stages involved in creating a holiday and develop skills associated with determining a selling price for a holiday from given information.
The role of the brochure will be reviewed against the introduction of new methods of promoting holidays. Learners will also review distribution methods used by tour operators to sell holidays, including the traditional use of travel agencies and the emergence of methods such as the internet and television.
Aim of the unit
This unit enables learners to gain understanding of the tour operators industry, the stages involved in creating holidays, brochures and methods of distribution used to sell holidays, strategic and tactical decision making.

Unit content:

LO 1 Understand the tour operators industry within the travel and tourism sector

Tour operators: as defined by EU Package Travel Directive; different types of tour operators including outbound operators, domestic operators, incoming operators, specialist operators, direct sell operators
Industry: identification of major tour operators including their origins, ownership, market segments, competition, identification of specific operators within each category; scale e.g. number of passengers carried, market share, turnover; products and services to meet different markets; vertical and horizontal integration in leading operators; impact of integration; European and global links; trends to include changing trends in holidays (e.g. mass market tourism to customisation, product range, all-inclusive holidays), expansion of the cruise market; environmental awareness of tour operators, responsible tourism; effect of economy and other external factors e.g. discounting, emergence of e-commerce, budget airlines;
The role of trade bodies including The Travel Association (ABTA), Association of Independent Tour Operators (AITO), Federation of Tour Operators (FTO), UK inbound, the UK Civil Aviation Authority (CAA)

LO2 Understand stages involved in creating holidays

Stages: steps e.g. market research; planning and scheduling; forecasting; contracting e.g. allocation, commitment, ad hoc, time series charters, split charters, ad hoc chartering, scheduled services, using air brokers; costing the holiday (fixed and variable costs, direct and indirect costs, load factors, markup, profit margins, seasonal flexing, competitive pricing, skimming, special offers, discounting strategies, currency exchange e.g. forward buying of currency, interest earning, cash flow); timescales.

LO3 Be able to review brochures and methods of distribution used to sell holidays

Brochures: recognition of the planning issues including deciding the format (content, structure, style, paper quality, size), based on product, target market and budget, determining print specifications, print run, multiple editions; timescales and stages of production including creative brief, copywriting, proofing, colour proof, printing; brochure launch; recognition of legal implications; other formats e.g. CD, video, internet, intranet, television; examination of distribution channels e.g. direct mail, specialist carriers, haulier, consolidated delivery companies, travel agencies, intensive/selective distribution systems; tracking agreements
Methods of distribution: methods e.g. direct sell, agencies, call centres, internet, teletext, telephone.

LO4 Understand the strategic and tactical decision making for tour operators

Strategic: examination of strategic decisions e.g. volume, pricing strategies, surcharge policy, positioning and image/branding, choice of product in relation to customer portfolio, distribution decisions; investment funded by capitalisation e.g. cruise ships and aircraft
Tactical: responses e.g. triggered by competition, price wars, external factors; decisions e.g. fluid pricing, yield management, maximising occupancy of contracted beds, utilisation of coach and aircraft seats, consolidations; tactical marketing e.g. discounting, late sales

TASK 1

The key objective of this task is to exhibit an understanding to LO1.
Currently as you are a in Travel and tourism management student, you have started to explore opportunities as working for Thomas Cook in one of their offices in London. Your first task will be to analyse the effects of the current and recent trends and developments of the tour operators industry.
Research by using supportive materials such as tour operator’s prospectuses, textbooks and online resources but above all conduct some field trips and visits to travel agencies and tour operators.

LO1.  Understand the tour operators industry within the travel and tourism sector:

P1.1   Analyse the effects of current and recent trends and developments on the tour operators industry.

TASK 2

Your second task is to understand the stages involved in creating a tour package. For the purpose of this, you need to  assess the stages and timescales involved in developing holidays, evaluate the suitability of different methods of contracting for different components of the holiday and different types of tour operator and also to be able to calculate the selling price of a holiday. Please address the LO2 and the assessment criteria P2.1, 2.2 and 2.3 by using the scenario as specified below. 
Scenario for Task 2 and Task 3.
You are been asked to create an educational tour package for the TTM students to Europe.  This needs to be planned for the summer vacation i.e. August 2015. The Tour should not exceed 7days and the maximum charge for each student should not exceed £350. This cost should include accommodation, transport, breakfast and dinner and entry tickets to the key tourist attractions. Students will be allowed to bring in their family members or friends, but please note that besides UKCBC students any other member joining the tour will be treated as a guest and will be charged an additional 40% of the price. Children below 6 months will travel free and above 6 months to 10years will be treated as guests and will charged at half the price of the guest.   

LO2 Understand stages involved in creating holidays

P2.1 Assess the stages and timescales involved in developing holidays
P2.2 Evaluate the suitability of different methods of contracting for different components of the holiday and different types of tour operator
P2.3 Calculate the selling price of a holiday from given information below.

TASK 3

Your third task is to be able to review brochures and methods of distribution used to sell holidays.For the purpose of this, you need to address assessment criteria P3.1, 3.2 and 3.3 by using the same scenario as specified above for task 2.  

LO3 Be able to review brochures and methods of distribution used to sell holidays

P3.1 Evaluate the planning decisions taken for the design of a selected brochure
P3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operators and recommend the most appropriate for your tour package.
P3.3 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.

TASK 4

Your last task is to carry out a research by using supportive materials like books, websites, etc. and to evaluate the strategic decisions made by different types of tour operator, compare the tactical decisions that could be taken by a selected tour operator in different situations.  The answers need to reflect the travel and tourism sector and supported with relevant examples. Answers without suitable examples will not be considered for a grade.

LO4 Understand strategic and tactical decision making for tour operators 

P4.1 Evaluate the strategic decisions made by different types of tour operator
P4.2 Compare the tactical decisions that could be taken by a selected tour operator in different situations.