Thomas Cook Tour Operations Management Assignment Solution

Program	Diploma in Travel and Tourism
Unit Number and Title	Thomas Cook Tour Operations Management
QFC Level	Level 4

Introduction

Travel and tourism is the most ancient and important industry all over the world. The industry is been modified with the passage of time ranging from the initial stage to the advanced. Travel and tourism management is a wide spread area and is been usually associated to the planning, evaluation of market conditions, implementation and control of the activities with the purpose to accomplish the set objectives in the business. The travel and tourism organizations manage the operation to achieve the effectiveness in the business and facilitate the potential customers with astonishing satisfactions (Blanke and Chiesa, 2013). Therefore, the present thomas cook tour operations management assignment is been conducted with the intention to analyze the effects of current trends on the tour operation industry. The report would be assisting in developing an effective holiday package and would be finding out the appropriate method of contracting being adopted by the tour companies. Furthermore, the report would assess the suitability of the alternative to a traditional brochure for the tour operators and make them design the same effectively. It would also be identifying the strategic and tactical  decision making  by the tour operators in the industry. With the purpose to acquire in-depth knowledge and understanding about different aspects the functionalities of Thomas cook would be evaluated and highlighted all through the report.

                                          

Task 1

1.1 Effects of current trends and developments in tour operator industry

Thomas cook is been included in one of the top most travel agencies in the entire world. The agency is one of the best leisure travel groups which records the sales of approximately £7.8 billion per annum. The organization acquires more than 21,812 employees and is spread in almost 15 markets all over the globe. Thomas Cook serves nearly about 23 million of the customer every year and highly emphasis on reliable and satisfactory service delivery to the customers. The group is been listed in the London Stock exchange and carries out its functionalities to the large scales. In the present times, it has been seen that the tour agencies had experienced great exposure and has turned out to be the major sources of income to the economy. There are wide ranges of developments and trends that made major influences on the tour operators and laid them towards the new avenues. Some of the key trends and developments that influenced the functionalities of Thomas cook are:

• Diversity: The travel and tour industry is been considered as the most diverse business in context of the group of employees as well as the guests. The travel operators are the one that facilitates the people to explore the diversity and gain the cultural experiences from different places (Becker, 2016). It has been found that people now a day are keen towards the discovery of intercultural activities and concepts around the world and thus the industry is recording higher number of travellers with the purpose to attend the cultural programs in different countries and contribute in the enhancement of the business.
• Increased purchasing power: With the increase in levels of income of the people there has been a increase in the purchasing power as well. This made the public to invest in the travel and tourism as with the intention to gain fruitful leisure time out of it. The willingness to spend more in the tourism had thus contributed in the enhancement of the sector and inclined the people to avail the best services. It has been seen that people are interested in moving far for spending the holiday and this made the operators develop attractive packages for the same and grab the maximum number of customers towards it (Evans.et.al, 2012). It is very much important for the travel agencies to facilitate the customer with the attractive packages and meet their desires and expectations to a great extent.
• Services: This is the most recent trend which each and every individual expects from the industry. People now a day desires to avail best satisfactory services out of their investments and acquire full utilization of the resources. At present quality service plays most important role in attracting and retaining the customers towards the agency. The customers are inclined towards the best service facilities and satisfaction derived throughout the tour and thus would create a long term relationship.
• Technological development: Technological development had made the travel operators more exposed and easily approachable. People now could access the details about the tour and travel operators through online sources like websites which makes them attract towards the packages or the services provided by the agency (Thakran and Verma, 2013). The facilities of checking the details and booking the tickets online had provided the customer with more convenience and had bridged the gap among the operators and customers as well.

In addition to this, there are more factors like flexibility in the booking facilities, growth of the local airports and transportation facilities, increase in the independent travellers, etc. Thus these factors affect the tour operators at large and had contributed in the attainment of higher profits. Moreover, Thomas cook also focuses on providing the best quality services and perquisites to the customers and make them feel satisfied and happy effectively.

Task 2

2.1 Stages and timescales involved in designing holiday package

According to the present scenario, Thomas cook requires designing a holiday package for the Chinese student group who desires to travel from London to Paris and France. The tour operator had received a proposal of drafting a holiday package for the group of 15 students and for maximum 5 days.  It has been identified that Thomas cook desires to expand its market and had recently emerged with the new offers as per the needs of the customers along with the trends (Mariani.et.al, 2014). The organization is now planning to design summer holiday package for 2018 in August. Moreover, in order to plan for the development of the holiday package Thomas cook would be following some important stages so that to come up with the effective plan. The stages are described underneath:

• Market research: Market research is been considered as the most important and initial stage for making the plan effectively. Carrying out a research provides with an idea and details about the location to be selected for the visit. As per the case, Thomas cook requires carrying out a market research in diversified areas of London, France and Paris. This would provide with the facts and information about the trends, major attractions, culture, facilities of food, accommodation, safety and security, weather conditions, etc. about the destinations (Lemelin.et.al, 2013). The research team of Thomas cook would also be facilitated with the estimation of approximate cost of the tours or operations along with the expenditures like transportation or miscellaneous expenditures of 5 days and would be able to make effective financial plans also.
• Planning and scheduling: In this stage, Thomas cook would be planning the activities or events to be conducted from the initiation till the completion of the tour. The tour operator would be able to make effective plan about the time and the resources required for the tour and would manage the time to reach the location accordingly. A proper schedule for the entire tour would help Thomas cook in serving the travellers with the best services like accommodation, food, transportation and make them experience the destination to the fullest.
• Contracting: With the purpose to have better deals and facilities Thomas Cook would get into contact with various other hospitality agencies so that to make sure about the arrangements in all the way through tour (Kärcher, 2013). Thomas Cook would get into contract with a hotel providing best food and accommodation facilities at both the  tourist destinations  and a transportation agency to ensure the local transportation for the visitors for sightseeing and other uses. In order to have an effective deal Thomas cook would get into Fixed Contract with the airlines and a hotel for the tour package 2018 prior 6 to 8 months so that to get attractive discounts offers of low fair benefits.

In addition to this, it is been predicted that Thomas cook would take approximately 4 months to carry out entire panning process. The activities of planning are been depicted with the help of a Gantt chart below:

Table 1: Gantt chart

2.2 Contracting methods for different components and different types of tour operator

Getting in a contract is important for the tour operators as to ensure the availability of the facilities and arrangements for the tourists. With respect to the holiday package of Chinese students, Thomas cook had initiated with the prior contracts with the airlines and the hotel organisations for the decided locations. The proposed package of 15 students for 5 days from London to Paris and France requires getting into contract prior 1 year so that to avail the best services in attractive benefits (Page, 2014). There are many contracts through which Thomas cook could make the arrangement and facilitate the customers but it had adopted two major methods of contract to make the services available for the tour package. Following are the contracts:

• Allocation: In this type of contract the tour operators agrees upon the allocation of specific number of rooms for entire season. The contract acquires a release date which is usually of 21 to 28 days prior to the tour.  The tour operator could handover the unsold room back to the hotel with no financial loss or assurances but had to pay for the rooms been acquired by the operators. It has been found that large scale tour operators get into this contract for the accommodation while planning for the holiday package and do not requires paying for any of the unsold service. Thomas cook had thus booked the rooms for 15 students prior to the tour and ensures the availability of the services effectively (Shrestha and Shrestha, 2014).
• Ad hoc: This contract is the most fragile and convenient way of arranging the facilities before the commencement of the tour. According to this contract, the agreement is been charged as per the activities to be conducted either hourly or daily. The contracts help to manage the services and attain confirmation with the help of emails or proper documentations. However, Thomas cook agrees upon this contract with the airlines on the discounted rated and had made the booking accordingly.

There are four major tour operators which could be approached by the customers. They are:

• Inbound tour operators: Inbound tour operators generally contacts directly to the inbound tourists from the foreign countries and facilitates them with various services like entertainment, transportation, accommodation, currency exchange, sightseeing, etc (Goldstein.et.al, 2013). For example, Thomas cook offers and design the tour packages by integrating with the tour operators across the boundaries.
• Outbound tour operators: These particular tour operators majorly focus on the international tours in the foreign nations and offer packages to the groups and individuals for the expected time. The outbound tour operators provides the services by carrying out an agreement with the inbound tour operators for making arrangements of food, accommodation, transportation and additional facilities required throughout the tour. Moreover, the tour operators also provide with the leisure and business tour packages as the package developed by Thomas cook by using the outbound tour services (Senders.et.al, 2013).
• Domestic tour operators: These tour operators acquire great scope of growth in the current time. The leading travel agencies emphasis on the niche segment of tourist and thus has large scopes of development.
• Ground tour operator: The ground tour operator is generally concerned with the land arrangements at specific destinations. These tour operators organize, secure, oversee and manage the payments of the facilities provided throughout the tour in the area. These tour operators are also known as reception operators or handling agencies in the country (Alegre.et.al, 2013).

2.3 Calculation of the selling price of the holiday package of Thomas Cook

For calculating the selling cost, the Euro had been converted into Pounds. The conversion rate for converting Euro into pounds is 1 Euro =0.77. The rooms are shared by two persons, thus for 15 people, 8 rooms would be required.

Cost for luxury coach =£ 2000

Cost for tour guide =£ 200

Cost of hotel for 8 rooms for five days = 60*.77*5*8 = £ 1848

Cost of Supplement for fifteen people for five days = 15 *5 *10* .77 = £ 577.5

Table 2: Selling cost

Expense Type	Cost (in Pounds)
Cost for luxury coach	2000
Cost for tour guide	200
Cost of hotel	1848
Cost of Supplement	577.5
Total	4625.5

Fixed cost of package =£ 4625.5

Profit margin would be 10% = 462.55

The actual selling price of holiday package would be = £ 5088

Cost of package per individual = £ 5088/15 =  £339.2

Task 3

3.1. Planning decisions taken for design of the brochure

Advertising plays an important role in promoting the activities of the tour operators to the great extent. It has been observed that the tour operators majorly utilize brochures as the means of promotion and make the public aware about the packages. As per the current scenario, Thomas cook had recently initiated with a plan of an adventure holiday package and intends to acquire an effective brochure design in order to grab the attention of maximum number of customers towards it (Turner, 2014). Brochures are the most traditional means of informing the customers’ at large platforms in low costs. However, to make effective brochure design Thomas cook must concentrate on the factors below:

• Content of the brochure: It has been observed that content is the most important aspect which must be focused by the tour operator. The content in the brochure should be understandable and simple as to deliver the actual information to the customers. It is very essential to avoid any of the indirect or complex content in the brochure. The details in the brochure should be relevant to the package so that to connect the reader and influence the targeted customer effectively.
• Colour combination: Colour is another important aspect as it gives an attractive look to the brochure and enhances the interest of the readers. It is very important for Thomas cook to focus on the colour combination in the brochure as it must suit to the eyes of the reader and influence him to go through the information (Lavoie, 2016). For example, Thomas cook would be including colour as per the summer trends or bright colours in its brochure so that to connect it with the offering and attract the customers.

                                                 Figure 2: Brochure of Thomas cook

Format of the brochure: A systematic format plays an important role in a brochure as it depicts effective impression on the reader. The format of the brochure by Thomas cook adventure holiday package mainly involves structured information about the accommodation, transportation, details of destinations, contact details, schedule of the tour, prices, details regarding the tour activities, attractions, etc. In addition to this, the brochure would also include eye-catching images related to the package as to depict the tour and influence them to experience the fantasy effectively (Goodall and Ashworth, 2013). The images would develop interest and eagerness among the people and would incline them towards the agency and avail the package.

Paper quality: Paper quality is been considered important as it depicts the standards of an organization. It lays a major effect on the image and position of the brand and influences the decisions of the customers accordingly. It is very much important that the brochure is of good quality paper with durability and is smooth. It would persuade the people and allow them to keep the brochure for longer period of time and make their minds for the services as well.

3.2 Suitability of alternative of traditional brochure for different types of tour operators

Concerning the recent trends and developments in the market there are wide ranges of alternatives which could be utilised by the tour operators replacing the convectional brochures. It has been observed that brochures are the most influential promotional tools which are been distributed through either online sources or physical sources which persuades the people to the great extent. The organisations for their promotional activities could adopt the promotional brochure and direct mail brochure (Standing.et.al, 2014). These type of brochures would be assisting in the promotional activities of the plan and acquire higher attraction of the people towards the brand. The promotional brochures are been considered as the most appropriate brochure for the specialised tour operators as it would support to promote the tour packages being arranged for the specific reasons like business, leisure, etc. These brochures are been used to attract the people desiring to opt for luxurious tours and agrees to pay the amounts as per the services in the packages. Thomas cook would be able to make the people aware about the package in a specific targeted market and would enhance the business accordingly. In addition to this, the organization could also post the brochures at online sources or send through e-mails to the prospective customers and make them aware about the same (Lumsdon, 2016). This initiative would prove to be beneficial in covering large areas and garb maximum number of customer over it.

3.3 Methods of distribution to be used to sell the holiday for different tour operators

With respect to the promotion of Thomas cook holiday package it is important to make use of effective distribution means and ensure the profitability out of it. Brochures is been considered as the most effective means of promotion and distribution to sell the package for the tour operators. It has been identified that the designs of brochure are been set with the help of new technologies which provides an innovative way of promotion to the company. However, Thomas cook could utilise different methods to sell its holiday package like online marketing, direct sales, social media, internet, telephonic sales, etc (Kärcher, 2013). It has been recognised that the direct sales methods used to make online sales of brochure would prove to be fruitful to Thomas cook. It would also facilitate the tour operator in approaching the wider areas of customer with the help of online marketing sources and grab the attention of massive population towards the package. In addition to this, email marketing tool could also be adopted by Thomas cook to sell the holiday package within the targeted segment of customers. With the purpose to implement appropriate method of selling the holiday package it is very much important that Thomas cook make use of both online and direct sales methods as would be able to approach larger scopes of the targeted segments in the market.

Task 4

4.1 Strategic decisions made by different types of tour organizations

There are majorly four types of tour operating organization performing the operations and functions within travel and tourism industry. In order to maintain the competitiveness and make the business profitable, these organizations are developing the following strategic decisions according to trends and culture in current time.

• Pricing decisions: The leading organizations in travel and tourism industry are making the strategic decision for price of packages and services that they are offering to customers. For example, Thomas Cook management is quoting the price of services and products by analyzing the market demand, availability of alternative products and services, trends, economic condition and own effectiveness (Sigala, 2013). In addition to this, organization considers the rules and regulation for ethical pricing that helps to attract the customers and develop positive brand image. In spite of that there are various factors like quality of services and products, cost of raw material and use of technology also have the significant impact on the pricing decision of Thomas Cook and other inbound travelling organizations. In addition to this, organization are providing the offers and schemes for attracting the customer to buy their packages and plan which is also part of strategic decision made by the organizations. 
• Customer relations: For travel and tourism organization, it is important to maintain strong relationship with the customer to retain them as well influencer the sales of packages. For domestic type of travel and tourism organization development of customer relationship is essential that helps to increase the customer volume. Thomas Cook is also making decision for developing the smooth and positive relation with the all type of customers. For that purpose, organization is making decision by considering the needs, demand and purchasing power of individual and target groups. In addition to this, the organization ensures the health and safety assurance processes is also in place across the entire product range (Grant, 2016). According to observation it is being identified that, tourism organization are making the strategic decisions by analyzing the requirement of customer groups and promotional strategies of competitor organizations which helps to develop the plan that aid to attract customer,  In order to maintaining the customer Relation Company provides branded products to the customer. Thomas cook aim to provide high-quality seamless advice and support from the time of booking throughout the holiday and returning to the home. 

4.2 Tactical decision made by Thomas Cook

These decision are known as short term resolution that made by the organization to avail the opportunities in the market as well make changes in the existing working process to overcome the impact of issues. Following are the key tactic decisions have been made by Thomas Cook and Kuoni to sustain the position in market:

• Price discrimination: Kuoni is domestic travel and tourism organization that offering quality services to customers. Additionally, organization has limited financial capacities which require the proper attention over the economic condition,  supply and demand  of services (Evans.et.al, 2012). The top management of organization is making decision for price discrimination to develop the opportunity to earn profit. On the other hand Thomas Cook is international level travel and tourism organization that have strong financial background that helps to make decision for offering the discount to customer that influence the sales for particular time.
• Utilization of transportation services: According to analysis, it is been considered that international and domestic organization has major difference in transportation services. The international travel organization like Thomas Cook book the high quality transpirations services and for that organization make contract with the leading local couch as well airlines. In spite of that Kuoni is domestic organization that does require the booking of seats (Fallon.et.al, 2014). This is an important tactic decision that made by the travel and tourism organization by forecasting and considering the booking of the customer.
• Currency exchange: In travel and tourism business, exchange of currency is an important part of business in which company analyze the global economic conditions and strength of collected currency. In order to exchange the currency, organization makes decision the risk as well booking or services. For example, Thomas Cook clearly set the warning for booking of services as a customer reserve a ticket in current day make payment after two days unknowingly the price of currency fluctuate then the difference amount will be borne by the company. In order to overcome the issues and maintain the effective profit margin the top management of organization make decision on the basis of fluctuation in the currency rate and market forces that have significant impact on the planning as well cost of services (Lavoie, 2016). To save the company from this kind of situation company took tactical decision. In spite of that, for small organization like Kuoni tactical decision over currency exchange and fluctuation does not have much impact on the business process.        

Conclusion

With the above report it could be concluded that the travel and tourism industry had faced the modifications with the passage of time ranging from the initial stage to the advanced. It has been found that Travel and tourism management is a wide spread area and is been usually associated to the planning, evaluation of market conditions, implementation and control of the activities with the purpose to accomplish the set objectives in the business. The report revealed that people now a day are inclined towards the discovery of intercultural activities and concepts around the world and thus the industry is recording higher number of travellers with the purpose to attend the cultural programs in different countries and contribute in the enhancement of the business. Moreover, it has been found that Thomas cook had agreed upon Ad hoc contract with the airlines on the discounted rated and had made the booking accordingly. It has been further recognised that the direct sales methods used to make online sales of brochure would prove to be fruitful to Thomas cook. The tourism organizations are making the strategic decisions by analyzing the requirement of customer groups and promotional strategies of competitor organizations which helps to develop the plan that aid to attract customer.