Unit 14 Tour Operation Management Assignment – TUI

Introduction

Travel and tourism is one of the most leading industries in the present times as people have started exploring adventurous and new experiences by moving round the world. Travel and tourism is a widespread term and includes massive number of activities to be performed by the organizations. The tour operation management is been mainly concerned with the assessment of market, planning, implementation and observation of various activities undertaken for accomplishing the set organizational objectives. The tour operator organizations manage the operations to serve the potential clients with greater satisfaction levels and provide them with the services effectively (Blanke and Chiesa, 2013). Therefore, the present Unit 14 Tour Operation Management Assignment TUI is been conducted with the intention to analyze the current trends and developments emerging in the UK travel and tourism industry. The report would assist in developing an appropriate proposal for the tourist and evaluate the contracting ways for different activities of holidays. In addition to this, it would also highlight the assessment of the brochure design being selected by the organization. Furthermore, the report would be recognize and examine the strategic and tactical decisions being taken by various tour agencies. With the purpose to attain more detailed and précised understanding about tour operations, various aspects of TUI, a travel operator in UK would be explained all through the report.

Task 1

1.1 The effects of recent trends and developments on the tour industry

Trends and developments are the terms which assist any of the  organization behaviour  to move ahead and grow with the potential opportunities. With respect to the tour industry, the effects of these trends and developments could be either positive or negative. TUI is the world’s largest travel industry group serving massive population all over the globe. The group acquires various subsidiaries being functional in different countries. TUI Plc is been headquartered in Crawley, England, UK. TUI provides with the wide ranges of the services like transportation, accommodation, travel agency, etc (Evans.et.al, 2012). The group mainly operates it business in approximately 180 countries and serves more than 30 million customers all over the world. It acquires nearly about 54000 employees serving people with their bets services around the world. It has been seen that the travel and tour industry in the present times had attained a greater significance and had also become the major sources of income for the economy. There are wide ranges of developments and trends which affects the industry to the large extent. Some of the major developments are:

• Interest towards events: Now a day’s, the latest trend which have been identified are the events. There are various events like social event, business events, cultural events, etc. being organized by different organizations or groups in different countries. This has become the latest interest of the people to avail the services of tour operators and visit the events specifically. On the other hand, the communities organizing the events contact the tour operators for the assistance in facilitating the participants of the events effectively (Becker, 2013).
• Enhancement in the income levels: With the increase in the levels of income the purchasing power of people have also increased which have made them make higher investments on the tours and travelling activities which contributes in the enhancement of tour industry significantly. The people now invest in spending their leisure time lavishly and with other attraction and thus made the tour industry to plan attractive holiday packages for the people accordingly.
• Technological development: As per my experience, there is an outstanding expansion in the technological aspects which contributed in the development of the tour operators as well. This advancement had facilitated the customers as well as the tour operators to the great extent. The technology had facilitated the customer with the online services to find the operator, check and book the tickets, avail details about the agency, etc (Xiang.et.al, 2015). The internet sources provides with the facilities to access each and every details being present on the websites and check the packages and other requisites by the operators as per their interests.
• Lower costs: Being an employee in TUI, I came across the facts that the packages with lower cost attract the customer more and influence them to the large extent. The packages being offered by the tour operators with favorable discounts and extra services on special occasion like Christmas, New Year, etc. inclines the customers and thus contributes in the growth of the company.TUI mainly focuses on the holiday packages which attracts the customers the most.

Moreover, these above aspects affect the  tour operator  development and assist them in earning higher profits and revenue incomes (Kärcher, 2013). TUI emphasize on providing the customer with the best packages and services with the intention to make them highly satisfied and expand its business operation to the higher levels.

Task 2

2.1 Assessment of the stages and timescales for developing holidays

According to the given case, a holiday package is required to be developed for the Chinese students who desire travelling from London to Paris and France. The tour package is been proposed to be developed for almost 15 students and would last for 5 days. TUI being a leading tour operator of UK acquires wide ranges of services provided to the customers. The tour operator would be making effective plan for developing the holiday package for the Chinese students so that to make them highly satisfied with the services. It has been identified that the tour operator is seeking to expand its market segment and thus had introduced new offers keeping the needs of the customers and the current trends at the priority (Davison and Ryley, 2013). Thus, the tour company had prepared a design of summer holiday package for August in the year 2018. In order to develop the package it requires following some of the steps through which TUI would be able to come up with the plan effectively. The stages are:

• Market research of the destinations: This is the most important and primary stage of developing a package plan effectively. The organization had already decided the destinations i.e. Paris and France for the tour. The authorities of TUI would conduct a market research to find out the current trends, climatic conditions, attractions, culture, suitability of the locations, facilities at the destinations, safety and security, accommodation and food facilities, major attractions and all the relevant information related to the destination. Along with this the organization would also collect details about the cost to be incurred for the 5 days tour in order to make proper planning of finances also (Page, 2014). It is been observed that TUI is making plan for the sightseeing tour so the investigating the facts would also transportation cost within the destinations, entry fees to the attractions, miscellaneous cost, etc. and would come up with the effective package for the students.
• Planning and scheduling: This stage is been entirely concerned with the planning and scheduling of the activities to be conducted throughout the journey as from the initiation to the end of the tour. The managerial authorities of TUI would be managing the time of the entire tour so as to reach the desired places on time and take proper benefits out of the destinations. It would be planning for the best facilities of food and accommodation and make the students delighted. Proper scheduling would support the tour operator in conducting the planned activities effectively throughout the tour. Thus, this would assist TUI in completing the proposed tour in 5 days and would make the students satisfied with the services (Smith, 2014).
• Contracting: This particular aspect is been included in this process because the tour operator would require having beneficial deals with the other service providers so that to develop the package with the attractive cost and avail profits as well. TUI would get into  aspects of business contract  with different organization like for the accommodation facilities hotels would be contacted and transportation companies to ensure the travelling services within the destinations for the students. Thus, TUI would be getting into contract with airlines and a hotel for the tour package for 15 students in the year 2018 prior to the time period. Communicating with the authorities of these service providers prior to the set time would facilitate in availing significant discounts or offers for the package (Khairat and Maher, 2012). For this, TUI would acquire a fixed contract for reserving the rooms in hotels and seats in the flight.

Furthermore, it has been predicted that the planning for proposed tour package would be completed in almost 4 months. The arrangements of planning are been highlighted with the help of Gantt chart below:

2.2 Evaluation of appropriateness of various contracting methods for various aspects of holiday and different types of tour operators.

Contracting with the other service providers facilitates to have better deals and offers in making different arrangements for the entire tour particularly. It has been identified that TUI had made prior contracts with the hotels and airline for holiday package of Chinese students specifically. The proposed package of the tour is of 5 day for 15 students from London to Paris and France. TUI would make contract prior 12 months with the service providers in order to avail best quality services and make the tourist satisfied (Šulei?.et.al. 2014). There immense number of contracts which could be implemented by the tour operators to come into the agreement with the other company. TUI majorly adopts two methods of contracting to facilitate the customer with best services throughout the tour. The contracts are:

• Ad hoc: It is believed that Ad hoc contracting is the easiest and flexible way of making required planning and arrangements of the proposed plan and reserve various services prior to the tour. The cost of agreement is mainly based on the activities to be conducted in a hour or daily throughout the tour. TUI had agreed upon this contract with the discounting rates with the hotel and airline both and had reserved the tickets accordingly (Henderson, 2015).
• Fixed contract: This contract is been mainly carried out by the tour operators to ensure the effective use of the volume based on the capabilities along with the enhancement in the profits in the off seasons. As per the contract, the non usage of the booked volume would be incurred by the tour operator itself. Thus, TUI avoids taking risk over the volume as the number of Chinese students could vary and would lead to the losses.

The tour operators are been mainly categorised among varied types such as:

• Outbound tour operators: These tour operators basically develop and provide with the facilities of international tours in the foreign countries and offer various packages to the people for specific time period. These operators get into contract with the inbound operators and serve the customer with all the facilities all the way through the tour (Cloquet, 2013).
• Inbound tour operators: This kind of tour operators manages and handles inbound tourists from foreign countries and provides them with several facilities like transportation within different locations, accommodation, food and other facilities. For example, TUI had developed and offered the tour package by getting into contract with other operators at different place.
• Domestic tour operator: These tour operators plays significance role in the industry as it acquire wide scope of growth in the present (Tveteraas.et.al, 2014). These organizations focus on niche market and serve the people at domestic levels.

2.3 Calculation of the selling price of the holiday

For calculating the selling cost, the Euro had been converted into Pounds. Duration for the tour is five days and a room will be shared by two. So total rooms required are 8 rooms

Table 2: Selling cost

Particulars	Cost	For 15 persons for 5 days (£)
Cost of hotel	46.60 per room twin sharing	8 * 46.60 *5 = 1864
Cost of supplement	7.77 per person	=7.77 * 5* 15 =582.75
Cost of coach	1000	1000
Charges of local guide	200	200
Total cost		3646.75
Profit margin (10%)		364.675
Actual selling price		4011.425 £

Fixed cost of package = 3646.75 £
Profit margin would be 10% = 364.675 £
The actual selling price of holiday package would be = 4011.425 £
Price per individual =4011.425 /15=267.5 £

Task 3

3.1 Evaluation of the planning decisions taken for the selected brochure design

With the development of the plan of the adventure holiday package, TUI now requires having effective brochure to be designed for carrying out the  advertisement and promotion  activities of the package effectively. Brochure is the best way for promoting tourism industry because brochure presents all information about organization and about different holiday packages. Brochures help in attracting and targeting large numbers of customers and incline them towards the package. Thus TUI would be presenting essential information about the package of adventure holiday in the brochure. In order to attain effective design of brochure TUI would be considering various aspects while deciding the brochure (Bricker and Black, 2016). Some of the key elements which are been prioritized are as follows: undertakes following important decisions for the brochure:

• Format: Formatting is the most important aspect of the brochure as  every reader expects  that the  company describes all information in systematic and attractive manner. The format of brochure will be in z-fold and it would l be entirely covered by the descriptions about the package, accommodation, transportation facilities and contact details along with the organization. Management would make use of attractive images of locations, infrastructures of accommodations and famous destinations in each page of brochure (Cardin.et.al, 2015). The format would be well structured and clear so that every customer could understand the details about the offerings.

• Quality printing: It is very important for designing an attractive brochure as the quality of the brochure also represents the status of an organization. It depicts the image and brand value among the targeted customers. In addition to this, TUI would also be using Die Cut Printing technique for designing the brochure as it provides with different creative shapes and assist in attracting the customers.
• Color: The selection of the color for the brochure design is very much important as it mainly concentrates on the end users and the recent market trends.TUI management has selected color according to summer trends to develop the design (Cetera, 2013). Color should be attractive and simple in brochure so that it does not irritate the reader and make them feel good with the brochure. The organization could make use of bright and vibrant colors to make the brochure look more attractive
• Paper quality:  The paper quality of brochure has significant impact on the users of brochure as it also creates a mind set about brand image among the customers. Paper quality must be high so that to create a positive image among the people. Thus, TUI would ensure high quality of paper as it would be smooth and durable so that the users can keep for long period.
• Content: Content is the most important aspect of the brochure as this would only influence the customers to move towards the adventure holiday package of TUI (Shepherd, 2015). This includes the entire information about the offerings of the package and the other attractions provided by the tour operator. It also includes the details of the destination and the additional perquisites which would influence the customer to join the tour with TUI. Along with this, it also includes the contact details through which the customers would contact to get the deal and contribute in enhancing the sales and profits effectively.

3.2 Assessment of the appropriateness of the alternatives to the traditional brochure for various types of tour operators.

With respect to the present scenario, several brochures have been developed and designed as per the desires and needs of the tour organizations. TUI requires focusing on the details about the offerings and attractions of the adventure holiday tour package in the brochure. It has been found that with the customers are more inclined towards innovation and thus the alternative of tradition brochure must be considered by the organization. Brochures are been considered as an effective tool to attract the customer and make them aware about the offerings and influence their decisions towards the holiday package (Duke, and Persia, 2015).  Following alternatives of traditional brochures could be bought into consideration by TUI:

• Promotional brochure: Promotional brochures are been used to promote the products and services of the tour operators and mainly includes the details of discounts and offers provided by them. This brochure is been considered much suitable for the outbound and ground level tour operating organisations. The promotional brochure contributes in the enhancement of sales among the target audience. With the help of this brochure, these tour operators would be able to enhance awareness among the targeted customers (Zhou, 2013). With respect to the requirements of TUI packages, this brochure is not much effective and appropriate. Thus, TUI would not be benefited with this type of brochure.
• Direct mail brochure: Direct mail brochure is been considered much effective for the inbound tour operating organisations. With the help of this brochure, the management of tour operators directly mails the details about the products offering to the listed target customers. The operators could also attach additional information about the destinations of adventure tour and discounts provided on the packages. However, direct mail brochures are also known as e-brochures which are been considered as more effective tool in different situations. With the help of this particular type of brochure TUI would be able to depict the details about the package within the large platform of customers and would also reduce the cost comparatively for the organisation (Räikkönen  and Honkanen,  2013). It has been found that the cost of design of e-brochure would be comparatively much lower to the other physical brochures. The online source could be the most appropriate alternative for the organisations as visual information is been considered more effective and influence the  customer relationship  at large.  As per the present case, direct mail brochure would be a suitable approach for TUI for spreading awareness about its offerings and the package information.

3.3 Evaluation of the different methods being used for selling holiday for various tour operators

As per the present scenario, there are wide ranges of distribution tools and methods which could be used by the tour operators. With the help of these distribution methods the management of TUI would be able to advertise the offerings of the package of adventure holiday in the targeted segment. Some of the best suitable methods of distribution which would assist TUI are as follows:

• Internet: This is the most effective way of distributing the package and avail maximum number of customers. In the present times, internet sources are the most common sources which have been used by each and every individual and provides with a large platform to approach the customers. The distribution of adventure holiday package of TUI among the targeted customer segment would be made through email, website, mobile application and social media like face book, twitter, LinkedIn, etc (Smith, 2014). These sources are been considered as the most effective sources to approach large number of customers at lower cost and time both. Moreover, TUI at present is emphasising email to distribute the information among the customers effectively. 
• Direct sell: Direct sale is been considered as the cost effective methods of distribution for the adventure package of TUI. It is the traditional form of promoting and distributing the products and services among the customer target by making use of face to face interaction and exhibition and influence the customer specifically. With respect to the present case, direct sales would not lay an impact on the customer as no one has much time to listen to the entire information of the plan and provide with the feedback (Busby and Curtin. 2010). Thus, direct selling would not prove to be effective for the promotion of adventure holiday package of TUI.

However, to establish an effective distribution for adventure holiday package it is recommended that TUI must make use of internet sources of distribution of the information so that to cover large number of customer segment and influence them accordingly.

Task 4

4.1 Strategic decisions made by the different types of tour operators

Travel and tourism organization make various decisions to maintain the operational flow and craft improvement in the business outcome. In order to meet the standard and business objectives, different types of organization make strategic decisions. In addition to this to craft the decision, the top management of organization consider the legislation, ethical policy and framework of trade union that helps to make decision that accepted by all. Strategic decisions have significant impact on the operational and functional activities of organization that support to maintain the position in market as well retains the customers. TUI and Thomas Cook are leading travel and tourism sector organization of UK that offering the similar kind of services to meet the needs and expectation of customer. By considering the current approach of both organizations, it is been identified that both organization make following strategic decisions analyzing the trends and economic conditions:

• Segmentation, targeting and positioning: In order to develop the marketing plan for travel and tourism packages, the top management of both the organization makes strategic decision by focusing on the quality, demand and economic conditions. Thomas Cook management crafts the decisions for segmentation using the information about the destinations that offered in the package and position it by using the current marketing trends. In addition to this, to target the customer Thomas Cook management use the key features of package and develop the strategy to advertise them that helps to target the specific customers (Atwal and Williams, 2009). On the other hand, TUI makes strategic decisions for segmentation and positioning by considering the needs of the potential customer and availability of other plan. TUI targets the customers by using the innovative approach in marketing and for that take decision for using the online services.
• Pricing decisions: This is an important decision for both the organization in travel and tourism sector. According to observation, Thomas Cook makes the pricing decision by considering the actual cost, other organization prices and focus groups (Björklund, 2011). This kind of approach helps to maintain the ethical pricing and attract the high numbers of customers. Apart from that, TUI management has made pricing decision considering the income level of target customers and own profits objectives. By considering these facts, TUI organization determines the pricing decision. 

4.2 Tactical decisions made by the organization in different situations

In different situations, the top management of Thomas Cook make changes in the tactics according to requirements and market conditions. For smooth business functions and achievement of objectives, Thomas Cook management make tactical decisions which are as follows:

1. Discounting: For that element functionality of Thomas Cook and Cox and King would be evaluate as both organization make different decisions. Thomas Cook is inbound tour operating organization that operating business in many other counties and targeting mass audience for sales. Now to make tactical decision for discounting organization compare currency exchange rate and own economic conditions (Buckley, 2012).  On the other hand Cox and King evaluate the own profit share to provide discounting offers to attract local customers.
2. External factors: There certain external factors that have direct impact on the  business organization  like Thomas Cook and Cox and King. In order to overcome the impact of political, technological and environment changes, top management of organization make tactical changes. Thomas Cook generally follow the regulation and using the Green policies according to tactical planning that gives competitive advantage over local tour organization like Cox and King (Busby and Curtin. 2010). In addition to this, Thomas Cook is technically advanced as top management gives the preference to new tools for managing the operations by making decisions for financial requirements.     

Conclusion

With the above Unit 14 Tour Operation Management Assignment TUI it had been concluded that tour operation management is mainly concerned with the assessment of market, planning, implementation and observation of various activities undertaken for accomplishing the set organizational objectives. It has been identified TUI is the world’s largest travel industry group serving massive population all over the globe. In order to develop the package TUI follows some of the steps through which it would be able to come up with the plan effectively. TUI had agreed upon Ad hoc contract with the discounting rates with the hotel and airline both and had reserved the tickets accordingly for the package. It has been also found that direct mail brochure would be a suitable approach for TUI for spreading awareness about its offerings and the package information. Furthermore, it is been recommended that TUI must make use of internet sources of distribution of the information so that to cover large number of customer segment and influence them accordingly.

References

Books and journals

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Davison, L. and Ryley, T., 2013. The relationship between air travel behaviour and the key life stages of having children and entering retirement.Journal of Transport Geography, 26, pp.78-86.
Duke, C.R. and Persia, M.A., 2015. Purchasing Issue Importance in Service Channels of Distribution: Tour Operators and Travel Agents. In Proceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference (pp. 405-408). Springer International Publishing.
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