Tour Operations Management Assignment

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

Introduction

Tour operations management assignment case study delves with the aspect of understanding the stages that have their involvement in the creation of a tour package. In this regard, an understanding of the tour operators industry within the travel and tourism sector is made. Post that, there is a need to have an understanding of the strategic as well as tactical  decision making  for the tour operators in which the strategic decisions made by different types of tour operators are to be evaluated as well as the tactical decisions that could be taken by a selected tour operator in various circumstances are to be compared.

 

Task 1

P 1.1 Analyse the effects of the current and recent trends and developments of the tour operator’s industry.

A significant growth that been experienced by the travel and tourism sector in the current period and there is strong possibility for it to develop more and more in the coming years. The aspects that are mostly associated with the tourism business are linked with the attraction, accommodation as well entertainment of the tourists and business tour operation.

In a report that was presented by the World Trade Organisation, there is a major contribution of tourism towards a country’s economy and is also accountable for the development of the economy of the countries throughout the world. In UK, the average growth rate of the travel and tourism sector is around 4% which is considered to be better in comparison with other industries that have their existence in the country. (McDainel, 2011) Certain significant developments in respect of the current trends associated with tourism or the tour operator’s industry are mentioned as under,

• Growth of technology in the e-commerce industry – The e-commerce industry’s growth is directly related with the tourism industry’s growth and development. With the technological advancement, the tour operators can offer the required services to their consumers with ease and convenience in whichever place or at whatever time they have the need for the service by using the online services. There has been an increased convenience in respect of the online booking services, reservations and also cancellations for the customers with the technological development since in the current scenario, it has been observed that individuals have a preference towards travelling to domestic or foreign tourist destinations in a frequent manner for holidaying or enjoying their leisure time. (McDaniel, 2011)
• Globalisation – It has been observed that in the current scenario, which the tourists are able to freely travel to various parts of the world in comparison to the previous years when people were prone to certain risks in respect of certain countries in the world. There has been an increase of global tourists from around 674 million individuals in 2000 to almost 940 million individuals in 2010.
• Niche target segments – The current tourism sector is organized or in other words, it can be said that it has an association with different niche target segments in respect of the customers. These target segments takes into consideration honeymoon couples, family customers, business travellers, students and so on. The young married couples are mainly targeted by the different tour operators in the current period. The tour operators majorly concentrate on a specific target segment in respect of providing improved amenities in respect of their customers and for ensuring that the customers will spend a significant amount of money on the activities associated with tourism. (McDaniel, 2011)
• Increase in the purchasing power or the customer’s ability to spend – The recent circumstances associated with the tourism sector states that individuals are spending a large amount of money in a significant manner in regard to travelling as well as to comfortably spend their leisure or holiday time. This is considered to be a significant reason for the travel and tourism industry’s development as well as expansion globally and as a result there has been the opening up of different scopes in respect of the tour operators also. In addition to that the local inhabitants of the tourist destinations also get benefitted from the spending that is done by the tourists when they travel to those tourist destinations.
• Governmental role and associated establishments – There has been a pivotal role played by the government of the various tourist destinations to facilitate the development of the tourism sector in the current period. It assists the tourism industry by offering flexible tourist visas, offering funds that will be sufficient for growth of the tourist destinations and also by offering relaxations in the taxation standards associated with the activities for tourism. (McDaniel, 2011)
• Change in the customer’s pattern for demography – There has occurred major changes in the pattern for demography in respect of the customers of the tourism industry. But having said that, it has also led to the expansion of the possibilities for the tourism sector. In the current scenario, there have been the developments of the packages for tourism in accord to the demographic preferences or customer conditions.
• Financial activities – The economical significance in respect of tourism is increasing with every passing day since it is considered to be an important aspect in respect of the GDP of a particular country. (McDonald, 2012)

Along with these recent trends that have been discussed here, the other developments in the recent trends in the tourism sector takes into consideration tourism marketing that has recently garnered huge popularity and has become a significant aspect for the tour operators in respect of attracting and creating awareness within the customers in respect of the services, packages and the facilities that are offered by them.

Task 2

P 2.1 Assess the timescales involved in developing this holiday.

It is very significant for developing an appropriate plan as well as ensuring implementing the same successfully for providing the customer experience that is satisfactory as well as comfortable. In respect of the scenario that is provided, there is a need to develop a holiday tourism package in regard of 15 Chinese students who are travelling from London, UK to Paris, France.

The stages that are associated with the development of the of the tour packages for the discussed scenario are explained as follows,

• Determination of the customer needs – For providing the aspired or the anticipated services in respect of the customers it is very significant in listening and gaining appropriate knowledge in respect of the needs of the customers. The allotted time in this respect will be 48 hours.
• Examining the destination for the tourists – According to the given scenario, London is considered to be the starting destination for the tourists i.e. the Chinese students and the destination they will e travelling to is Paris which is situated in France and therefore there is a significance in conducting appropriate assessment in respect of the  tourist destination  of the two locations. The allotted time in this respect will be a month.(McCalman, 2015)
• Conducting market research – This is considered to be the major step that will assist in developing an insight in respect of the internal as well as external issues that have an influence on the tours as well as in respect of the competitions that have their availability in the market. Since the students are from China therefore it is very much necessary in gaining information in respect of the cultural scenario of the country. It also assists the tour operators in developing the strategic aspects in respect of the customer’s demand as well as for making the tour such an experience that will etched in the memories of the tourists. This complete process will be taking a minimum of three month’s time. (McDonald, 2012)
• Package designing and estimation of involved cost –This step will take into consideration the designing of a preliminary draft in respect of the tour package as well as estimation of the appropriate expenses in respect of the total tour as well as the other necessary needs that are significant for the travellers for ensuring their safety and security. The allotted time in this respect will be a single day.(McCalman, 2015)
• Negotiation with the service provider – It is necessary for the tour operators for negotiating with the service providers of both the tourist destinations which are London as well as Paris specifically. The most significant services takes into consideration the aspect of foods, accommodation, transportation and other facilities that are important to provide a hassle free journey in respect of the travellers. This will have the requirement of a time period of one to two months. (McCalman, 2015)
• Final development of the tour package – This is considered to be the final step that has the involvement of the tour package’s final designing that takes place after successful negotiation with the tour operators as well as to convey the details in respect of the expenses as well as others services in respect of the tourists. This assists as well in facilitating the promotional aspect of the tour packages across the globe. It will possess a time period of two months.

P 2.2 Evaluate the suitability of different methods of contracting for different components of the holiday.

The tour operators are relying mostly on two methods in respect of the reservation of the varied scenarios of the related tour packages that takes into consideration the ‘fixed contract method’ as well as the ‘sale only contract method’. In respect of the given task the tour operators that have been selected are Thomson (a mass tour operator) and Kuoni (a specialized tour operator). Both these tour operators will be used to compare the methods used by them for contracting the services that they provide that includes accommodation, food, transports, and other associated services.(Lind, 2014) The below mentioned details will be depicting a comparative analysis among the two tour operators in regard to the methods that they are using,

• Fixed contract method: The organisations which use this method mostly have the preference towards the optimum utilization of the volume based capacity that will also assist in maximising the generation of revenue in respect of the company even when there exists an off-season. Thomson will be making arrangements in relation with the tourist’s demands as well as expectations. Thomson does the booking of the whole capacity at one time and the payment is done in relation with the use of capacity. But having said that, there also exists the involvement of a particular crisis situation with this type of contact which states that the tour operators are required to make the payments for not utilising the capacity as well.(Lind, 2014) This kind of package has been developed by Thompson with the mindset that that the summer season is considered to be the appropriate season since a significant number of individuals like to travel in the summers and as a result, the tour operators will be interested in getting additional benefits in this season since there exists a low chance towards not using the capacity and also there might be the receiving of major discounts also. (Thomas, 2011)
• Sale only contract method: Kuoni is considered to be a specialised tour operator and prefers designing tour packages by keeping in mind a specific destination or country. This kind of tour operators are majorly targeting the target segment of niche customers and accordingly do the designing of the tour packages.  Since, these tour packages are considered to be very expensive therefore only a small number of customer segments will have the inclination towards availing such tour packages. In these types of tour packages, Kuoni will bear the responsibility towards paying the price for accommodation as well as different types of transportation that tourists will be using. These types of contacts are majorly used in the lean season for avoiding poor response in respect of any tour packages that the specialised tour operator, Kuoni develops. (Shaw, 2011)

The above discussion can be concluded by saying that the fixed contract method will be providing more beneficial aspects in respect of its customers in comparison to the sale only contract method and will be providing discounts also. Therefore, it can be said that the companies will gain more profit from the fixed contract method.(Thomas, 2011) On the other hand, the sale only contract method assists in saving the tour operators from paying for the non-utilised capacity and as a result there is a significant reduction in the organisational loss.

P 2.3 Calculate the selling price of the tour.

The following task will have the involvement of the calculation of the selling prices of the tour packages in respect of the Chinese students. According to the case study that has been given, there is a need for designing tour packages by the tour operators in respect of a group of Chinese students consisting of 15 individuals who are travelling from London, UK to Paris, France for the duration of five days in the year 2018 during the month of August.

Total Cost Involvement for the Tour Package

Sl. No.	Details of the Package	Price per Person	Price for 15 Persons
1	Airline Charges	€20	€300
2	Transportation Charges (Coach, taxi, etc.)	€1000	€1000
3	Hotel Charges	€60	€480
4	Miscellaneous Charges		€ 200
5	Total Cost in Euros	€1080	€1980

Total cost price = €1980

Profit % = 10%

Hence, Selling price = €1980 + €198 = € 2178

Task 3

P3.1 Evaluate the planning decisions taken for the design of a selected brochure.   

In the travel and tourism world, there exists a special significance for a brochure since it is utilised for conveying information in respect of tour packages and also their selling by utilising the online as well as offline mediums. It is considered as well to be one of the most admired and effective tool for marketing in respect of the tour operators. It is a popular fact that almost 50% of the total cost of the tour operators does the involvement of the brochure costs. In addition, the major elements associated with investments are considered to be web based components. (Romero, 2011) The brochure is considered as the broader aspect in respect of planning, organising and implementing the tour programmes. The tour operators should be taking into consideration the below mentioned stages in respect of developing a proper brochure,

• Appropriate planning of the research method
• Negotiating with the suppliers or the service providers
• Administration
• Marketing

In addition, the planning decisions in respect of the brochures should take into consideration the below mentioned aspects,

• Identifying the planning matter – In respect of designing the brochure, there is the necessity for appropriate evaluation in relation to the objectives associated with the brochure, timescale and target segment.
• Formatting – Appropriate format is required to be made in respect of making the brochure visually striking in respect of attracting a significant number of customers as well as for ensuring publicity that is associated with word-of-mouth.
• Identifying the target market – There should be the analysis of the proper niche target segments in respect of providing the anticipated services to the customers in a successful manner. (Romero, 2011)
• Estimating the budget – It is considered to be an essential step and the tour operators must make sure the effectiveness of cost in respect of the brochures.

The brochures that are designed for holiday packages are also considered to be an important part of the  marketing planning  process. The brochures for holidays are majorly designed for fulfilling the objectives to provide the aspired services to the tourists to ensure customer satisfaction and also the safety as well as security of the customers at reasonably priced rates.

P 3.2 assesses the suitability of alternatives to a traditional brochure for different types of tour operators and recommends the most appropriate for your tour package.

In the earlier periods, the traditional brochures were considered as an effective method to convey the necessary information to the target customers as well as the other individuals. On the other hand, with the technological advancements of the various mediums, the customer’s need to change, and for meeting the challenges associated with the increasing competition, the tour operators are shifting towards the alternative options associated with the traditional brochures. In the current scenario, there has begun the use of the e-brochure which is considered to be the more advanced form of the traditional brochures, which have garnered huge popularity among the target audiences. There is a much wider approach in respect of e-brochure in comparison with the traditional brochure and possesses the capability to attract a huge strength of customers as well as also possesses the capability to generate the need for travelling among the customers also. (Robinson, 2011) Because of this, the e-brochure has been able to get the approval of being much more beneficial for the tour and travel organisations or the tour operators. In addition, the e-brochures are considered to be price efficient since the involvement of cost in respect of the development of the brochures is much more when compared with the designing associated with the traditional physical brochures.

Moreover, along with the discussed alternatives, another alternative in respect of traditional brochures could also be in respect of the visual brochures that possess the capability to attract a significant number of customers. (Robinson, 2011) In addition, the best explanation of the scenic beauty as well as essence of tourist destination can be done with the help of visual brochures.

P 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.

The various kinds of processes that are used to sell the tour or holiday packages are explained as under,

The primary step is associated with properly identifying the target customers. The second step is having association with a company brand. After that, the next step is designing of the brochures which are considered to be an effective mode to sell the tour packages. Even though, there has been an important change in respect of designing or developing the brochures in respect of the tour packages, the significance associated with the use of brochure has only developed with the passing of time. (Mowforth, 2015) For instance, Thomas Cook is making the use of the aspects of online marketing, direct sales, call centres and so on for selling and promoting the company’s tour packages. In respect of the brochure’s online sales in respect of the organisation, the data provided in respect of it is mainly generated exclusively from the online sources. The method associated with only sales is more beneficial, comfortable and convenient in respect of the tourists as well as the tour operators. In addition, the present generation and the next generation are very strongly attached with the internet as well as new technological advancements, as a result of which the online sales market is expected to rise as well as do the huge revenue generation in respect of the organisation as it will possess the ability for attracting an increased number of customers in comparison with the traditional sales medium. (Mowforth, 2015) In addition, tools associated with e-mail marketing can be widely utilised in respect of promoting or selling the tour packages as well as to create awareness within the target audience in regard of their tour packages as well as the amenities that have an association with it. (Robinson, 2011)

Therefore, there can occur the inclusion from the above process of evaluation, the online medium that can get adopted in respect of selling as well promoting the tour packages is considered to be more profitable in respect of the tour operators and also in respect of the customers since they are considered to be consuming less time, can be accessed in an easier way as well as, is more user friendly also.

Task 4

P 4.1 Evaluate the strategic decisions made by different types of tour operator.

A tour operating system that possesses flexibility takes into consideration a huge quantity of mechanisms that assists in enhancement of the business profitability. In respect of the tour operators, strategic planning is considered to be very significant for ensuring the smooth operation of the daily activities. The method of strategic planning in respect of the tour operators mainly takes into consideration the following sections that are associated with competitive strategic aspects, providing cost advantages for the organisation, adopting efficiency for price as well as proper selection of the target customer segments. The strategic planning process has been proved to be beneficial in respect of the tour operators for gaining an insight in respect of the future route of action. (Conrady, 2011) The significant strategic decisional aspects that the different tour operators undertake can be explained in details as mentioned below,

• Segmentation, Targeting and Positioning (STP) – This is regarded as the most essential strategy for marketing since it assists in market segmentation, identification of the target customers in an efficient manner as well as assists in positioning the products or services that are offered by the tour operators in a way that can assist in attracting a significant number of customers. The tour operators take such decisions by conducting appropriate market research and then doing the evaluation of the results. (Conrady, 2011) For instance, Thomson which is considered to be the one of the best as well as largest tour operator is famous in respect of its services across the world segments, for its market in regard of the demography, geography, as well as behavioural and psychographic aspects. In respect of the behavioural and psychographic aspects, Thomson is making efforts for gaining information in regard of individual lifestyle who belong to various countries as well as doing appropriate evaluation of the customer’s buying behaviour.
• Discounting Price Strategy – Pricing is considered to be one of the major aspects in respect of the tour operators. For attracting new as well as increased number of customers the tour operators like offering discounts to the customers in respect of which they will be adopting the method of fixed price contract. (Moutinho, 2011)This strategic aspect will assist in providing the competitive advantage to the tour operators and will assist in ensuring satisfaction as well as retention of the customers.
• Competitive Pricing Strategy – The tour operators adopt this kind of pricing strategy since it assists in providing competitive advantages for them. It’s determination is mainly done by considering the tour package price that the other tour operators offer to the customers. For instance, the well-known tour operator, Thomson is following the pricing strategy that is based on the aspect of competitive pricing, product and customer pricing.
• Seasonal Aspect of the Tour Packages – Customers have the preference for travelling in different seasons that is majorly depending on the children’s vacations or season for festivals and so on. Because of this, the tour package’s pricing rates is different for different seasons and depends on the customer turnover rate. (Moutinho, 2011)
• Innovative Promotional Strategy – In recent times, it has become very much significant in respect of the tour operators for promoting the packages that they offer to the customers for attracting the customer’s attention. Adopting exclusive and innovative advertising techniques are considered to be very significant to attract a significant number of individuals. Innovative strategies for promotion also assist in successful handling of the competition. For instance, Kuoni being one of the biggest tour operators is famous for the adoption of exclusive strategies for promotions for promoting the tour packages. It is also known to make efficient use of the various advertising mediums like the print mediums, electronic media and trade fairs and so on.

P 4.2 Compare the tactical decisions that could be taken by a selected tour operator in different situations.

Tactical decisions can be broadly explained as the decisional aspects that are considered by the tour operators in regard of the day-to-day activities of the concerned organisations. It assists in ensuring business functioning that is smooth as well as flexible and also assists in avoiding the chance of any type of confusion in respect of the everyday organisational activities. Certain tactical decisions which are taken by the tour operators includes negotiating with the service providers, making different arrangements in respect of transportations as well as accommodation and to maintain healthy relationship with the stakeholders to keep them informed in respect of the organisational activities. (Buckley, 2011)

One of the significant tactical decisions that that tour operators take are associated with coordinating with the tour operators. For ensuring efficient coordination as well as for deriving the anticipated outcome from the same it is definitely very much significant for the tour operators in consulting various services as well as conducting proper research of the market to gain information in regard of the price rates of the services that are provided in the current period. For instance, certain tactical decisions that Thomson undertakes in regard of service processing are associated with allowing the use of internet services that are of high speed for providing instant and most efficient services for the customers. (Buckley, 2011) The channel of distribution that Thomson uses is mainly related with the channels linking the producers with the consumers in a direct manner and as a result there is reduction in the price rates for the customers also.

Conclusion

This case is associated with the aspect of travel and tourism management for analysing the influences of the current and recent trends and developments on the tour operators industry, then assessing the timescales that are involved in developing a holiday as well as evaluating the suitability of different methods of contracting for different components of the holiday. Along with this the planning decisions are evaluated in respect of brochure designing as well as the evaluation of the suitability of various methods of distribution are also done for selling a holiday package.

References

Buckley, R., (2011). Tourism and environment. Annual Review of Environment and Resources, 36, pp.397-416.
Conrady, R & Buck, M (2011), Trends and Issues in Global Tourism 2011, Springer Science & Business Media
Lind, P. (2014). Monitoring Business Performance. Routledge
McCalman, J. (2015). Change Management: A Guide to Effective Implementation. SAGE.
McDaniel, C. (2011).  Essentials of Marketing. Cengage Learning.
McDonald, M. (2012). Market Segmentation. John Wiley & Sons.
Moutinho, L (2011), Strategic Management in Tourism, CABI.
Mowforth, M & Munt, I (2015), Tourism and Sustainability, Routledge.
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