Unit 14 Tour Operations Management Assignment - Thomas Cook

Program	Diploma in Travel and Tourism
Unit Number and Title	Unit 14 Tour Operations Management
QFC Level	Level 4

Introduction

In this era of globalisation travel and tourism industry is resulting with huge scope and advantage of this can be taken by the tour and travel industry by effective tour operations management in their activities. This report is detailed study of the various aspects included in the tour operations in the travel and tourism industry in which there can be adopted strategic management and strategic decision making. There is explained various aspects related to the products of this industry which are the tour packages offering by the companies and various recent developments done in their management. There are defined various aspects to develop brochures products and facilities of customisation in the products with the increase in the distribution channels in this industry. Thomas Cook a travel and tourism operator company is providing effective services and managing its operations is explained in the report.

Task 1

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

Task 2

P 2.1 Assess the stages and timescales involved in developing holidays.

In the travel and tourism industry there are various aspects that make impact on the overall process to plan holiday with defining time scale with it. There is required to do planning of activities in the initial stage that can help in developing holidays by analysing all the alternatives and making the most effective decision from them. There are various stages which are involved in this planning process which are defined as follows.

Researching the place:  The first step in this process is to look for the effective place which can be appropriate destination for the purpose of holiday for the customers. There are identified all the requirements of individual who is willing to go for the holiday and also consider analysis of the environment by using the PESTEL model of business environment.

Preparing itinerary:  In the process of developing holiday there is required to make effective plan in which there is required to plan other activities after selection of the destination that can make help in effective planning. This is defined as the summarisedform of overall tour plan which includes all the destinations, accommodation facilities and transportation facilities included in this. This provides an overview of the overall holiday (Chand, 2011).

Pricing of package: There is required to adopt effective method of pricing in which there are selected effective methods of pricing by which there can be defined effective price to the overall holiday package. There are required to be considered the foreign exchange rates, costs of accommodation and transportation, tax framework in the different countries. Prices must be fixed by considering the required facilities and budget of the customers.

Promotion of holiday package: In this stage there are selected various methods and techniques to promote and advertise the holiday package that can make others aware about the holiday package and can attract more customers who can make impact on profitability of the organisation (Chand, 2011). Marketing sources are used to effectively attract different customers in the organisation which can make impact on theeffectiveness of the tour operation management of the developed holiday package.

Implication of the plan: In the last stage there must be effective implication of the holiday plan which can help in making the plan real and achieving success into this.There are required effective plan which can make impact on the overall effectiveness of the holiday plan. There is required to manage all the planned activities and control them in effective manner that can make impact on overall performance of the holiday plan (Farahani,et. al 2011).

P 2.2 Evaluate the suitability of different methods of contracting for different components of the holiday and different types of tour operator.

In the tour operations there is required to contract with different parties which can make impact on the overall tour operations management in any organisation. There can be selected following types of contract in accordance with the attributes and characteristics of the tour operations (Farahani,et. al 2011).

Fixed contract: There is adopted quantitative approach in this type of contract of sale in which there is collective approach is implied where the tour operator tries to take benefit of the maximisation of the sales volume. There is defined that this type of contract is useful in the offseason in which there is huge risk because the contract is done on its full capacity where there is risk of un-utilisation that can make huge loss to the tour operator. The level of risk is high in this contract which generates high returns (Filby, et. al 2015).

Sale only contractor: This contract is seasonal contract in which there are high prices in comparison to the fixed contracts. The level of risk is less of the tour operator as in there is liability of the individual and there are less chances of any kind of discount in comparison to fixed contracts. The level of risk is less here so there is less returns for the tour operator.

P 2.3 Calculate the selling price of a holiday from given information below.

As per given in the situation there are 15 Chinese students are planning their tour for London, UK and Paris. The following is the calculation of cost of their tour in accordance with the selling price per person of tour.

Calculation of selling price of tour

Cost	Calculation	Amount
	cost of rooms	45*54*5	6,210.00
	cost of BB	12*45*4	€                                                                       2,160.00
	Total variable cost		€                                                                       8,370.00
	1euro=0.9pounds
	variable cost in pounds	8370*0.9	£                                                                       8,154.00
	cost of bus		£                                                                       5,400.00
	cost of guide		£                                                                           900.00
	total cost of tour		£                                                                     14,454.00
add:	profit margin 20%		£                                                                       2,890.80
	total sales price of tour		£                                                                     17,344.80
	number of students is 45
	price per student will be 3212£

  Task 3

3.1 Evaluate the planning decisions taken for the design of a selected brochure

Printing brochures & method of distribution

Brochures include identification marks of the package. This may include information on the package. These are

• Name of the package
• Contents and services provided in the package
• Discounts and offers
• Other relevant information about the tour package which need to be taken care of which includes (1) Rules & regulation (2) Restrictions

The Brochures aims at capturing the market and inform customers about the relevant product and services. This might increase the turnover of the tour and travel organisation like Thomas Cook. It includes persuasive message or information transferred by non-personal medium (Gavino, et. al 2010).

Earlier it was in the paper format only but now a day with emerging change in technology the Brochures has reformed itself to e- Brochures which is spreaded through internet, television and other channel of advertisement. Earlier it was limited to paper form Brochures which has a limited reach and scope of informing mass people. Paper format Brochures are generally spreaded through paper media. The direct mailing of Brochures catalogues printing Brochures on motor vehicles are becoming increasingly popular (Gavino, et. al 2010)

The above is the example of Brochure of Thomas Cook which signifies various lucrative packages for various countries. The main features of the Brochures are

• Reach the wide range of customers in short span of time
• Create brand image of the organisation
• Can be influencing for changing a variety of customer behaviours
• Can be merged with other promotional approaches
• A flexible approach of informing the complete data and variety of media tools available to communicate the same
• Consumers can pay more attention to the paper form of Brochures as they are not quickly screened out as in the case of other television advertisement (He, et. al 2012).

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

Before considering the Brochures method and deciding the format following necessary elements are to be considered. These elements are tabulated in the below table

s.no	Element of Brochures to be considered	General nature of the elements to be considered in tour and travel business particularly
1	Content	Content generally include Welcome note and brief note of company and about the package What the package is offering all about including flights, choice ofhotels bookings with option of various star categories, securities and safety, coach subway and taxi hire The pre-packaged tour package with different amenities according to needs and requirements of tourist Option of customised services Customer care services with dedicated toll free no.
2	Structure	Structure of such Brochures are sequential starting with series of information, attractive pictures and a detailed information about the package
3	Style	The main USP of the Brochures of Thomas Cook is its first look as it is rightly said ‘first impression is the last impression. It is a colourful document describing structural innovative way of information writing
4	Paper quality	Generally paper quality of the Brochures is very fine. It generally uses glossy paper with a fine mat look and with a good appropriate thickness of paper so that one can retain it for a longer period of time
5	Size	The size of such Brochures are generally A4 or A5 sheet of paper with horizontally printed over it with a book fold at the centre of the page.

 

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.

Method of distribution:  Methods of distribution Brochures or packages include the channel or middlemen who help in distributing the same. Organisation is situated at one place and it is difficult to advertise about the company throughout the globe. It is the channel of distributions used which are used by various organisations like Thomas Cook which helps them grabbing the customers around the global market. Along with being economy if efforts of middlemen also helps in bringing the efficiency in distribution of packages and providing support services like transportation of passengers, flooding and lodging, providing agency services on behalf of Thomas Cook (Hu, et. al 2011).

Different methods of distribution used by Thomas Cook are as follows-

Newspapers – The newspapers are the important and most relevant form of print media available to companies to reach wide range of customers. The further advantages of the above channel are as follows

• It gives wide coverage and reach. Due to its large circulation and coverage average cost per customer becomes very low so it is cost effective too
• It gives one of the most important feature of Boucher that is gives flexibility of design and data or information to be shared

E- Broachers & E-commerce – it is newly emerged form of marketing planning or promoting and even selling the packages of tour companies. Slowly it has taken a huge share in total market and now e- commerce has captured major part of total market (Hu, et. al 2011). Now it is the companies which has to decide the factor working on issues with internet technologies like

• Transforming marketing strategies to create customer value by segmenting transforming goals and objective according to e-customer needs
• More carefully planning and executing the strategies and creating a loyal customer base as in case of e-selling price differentiation and services can hamper our customer base a lot. Customers now a day are making comparative analysis on various grounds so the company has to be vigilant in making policies related to conception, promotion, servicing, pricing and discounts offered on packages
• It gives company high speed of interaction with low cost of maintenance with mass reaches. It further gives multi-dimensional communication with high level of user control.
• It has fewer hassles in the operations of the business with moderate level of credibility

Direct selling-  It is the process the company like Thomas Cook approaches its customers on one to one basis and sells its products directly general face to face physical interaction. It is conventional way of selling the packages and still most reliable form of it. It is a two way activity which deals with customers directly (Mak, 2011). It is the original form of direct selling which is based on field sales call. Companies still rely on professional sales force to locate prospective customers and to converts that prospective customer into actual customers by inducing them. Representative and agents carry out direct selling task.

• It includes use of telephone operators to attract new customers and to remain connected with existing customer to solve their grievances and persuading for future bookings (Mak, 2011).

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Task 4

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

STRATEGICAL AND TACTICAL DECISION TAKEN BY TOUR OPERATORS

Strategically decisions

s.no.	Strategical decision	Factors supporting decisions
1	Pricing Decision	Pricing is important tool and aspect in growth and sustainability of any organisation particularly tour and travel which is highly influenced by heavy cut throat competition. For every organisation profit is the soul need for its existence. The earning of profit totally depends on its pricing decision. Apart from competition several other factors which influence the pricing decision like social environment in which firm is operating i.e. whether social environment in which firm is operating is ready to pay the suggested price or not, other factor may include political, legal and economic factors. Pricing decision is taking after taking suggestions from different levels of management It is major element in deciding the strategies of the company and further it is influenced by many factors. These factors are further sub grouped into two major streams Internal Factors for making pricing decision Cost of the services Objectives & Goals of the tour organisation Different product packages Organisational objectives   External Factors for making pricing decision Demand of the services or packages Brand value of organisation Government policies & rules/regulations Market economic conditions Further there are some organisational goals and objectives which are needed to be achieved for setting the price of the service. The primary objective is to increase the profits and creates stability in the market so that the price does not fluctuate too often. Generally the segment in which Thomas Cook is working is too flexible and market sensitive so there is frequent changes in the cost of the packages to the company. It is on the part of the company to reduce the vulnerability to the price war threats as there is huge competitive situation in the market. This is also sometimes customer focused decision is taken after seeing the ability of the customers to pay for the respective packages (Operation and Management,2014).
2	Positioning & Image /Branding	A branding of the company profile is its identification in the market. It is generally associated with name, symbol or design of the company logo, name etc. It is much more than an identification mark or a symbol. It is delivering of quality to the almost satisfaction of customer needs and building faith in organisational values. In another words it is reputation of the company which helps them to bring greater control and capture great market area. It is recognised by brand name, brand mark, trade mark etc. The decision taken while opting for brand name creating positioning/ image of the company in the market are as follows (Operation and Management,2014). It should be short and simple and easy to recognise Like Thomas Cook it should be easy to pronounce as customer will hesitate to demand ask for servicers from that brand which are difficult to pronounce It should be unique and different so that it create attractiveness and create a feel of luxury among its customers
3	Volume	The volume or demand of the organisational services also influences its strategy making decision. There are majorly two scenarios based on volume of series demanded on which strategies is to be decided Expansion of market- It is diversification of exiting product base. Company like Thomas Cook in case of growth scenario increase its product lines. For example company will increase the package for the areas of untapped markets which might give huge revenue generations Contraction of Market- The management has to drop some services or reduce the area of operation of unprofitable markets
4	Packages referring customer portfolio	The tour and travel companies generally make various packages according to customer demand and needs. The profile and economies of the customer base is major factor while deciding the customer packages. The package is generally sub grouped into three categories (1) luxury (2) moderate or average (3) economical
5	Product capitalisation decision	It is an important factor which helps to decide that how much a company should invest on a particular project or investment according to funds available for disposal. Following measures are to be taken before making strategy regarding capitalisation of product Finding requirement of funds required to carry the basic operation of the company effectively and then further make strategy to invest in particular product Determination of total fund requirement and cost of funds to be also checked with the benefits attained with the project associated with it Financial planning and strategy making includes both short term as well long term planning (Potgieter, et. al 2010). It is necessary for success of any business enterprise

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

Tactical Decisions: These are short and medium term decision usually taken for immediate effect and quick responses. These are general responses to quick issues to the problems and market issues some of these are

Market competition: If the market is competitive due to existing rivals or entrance of new players in particular type of industry of tour and travels market is hugely affected, then company has to opt for liberal policies and to keep its service quality intact. Higher level off operations will reduce the working capital cost of the company ultimately keeping the viability of the company’s existence in the long term (Potgieter, et. al 2010).

Price wars: High competition in the market creates price wars and substantial decrease in prices which might not be viable for an organisation to survive in the long term scenario. High competition is the crucial factor in sustainability of firms. A company like Thomas cook can fix prices of the services equal to or lower than that of competitor’s price but company should not consider or compromise on the quality of service provided.

External factors like fluid pricing, yield management, consolidations tactical marketing etc.

• These factors are needed for short and medium term decision of any enterprises which effects its longevity and going concern.
• Discounting of services to meet breakeven at least then focus on the profitability in the off season market (Wu, 2016).
• Waiting for the last day sales and hold some occupancies to earn more revenue at slog time.

Conclusion

This report is detailed study of various aspects related to the effective management in the tour operation company. There are identified recent developments on this sector that can make impact on the overall economic effectiveness of the organisation. There are defined various aspects related to the strategic management and decision making in the tour operator industry.

References

Chand, M. 2011, "Strategic Alliance Practices in Indian Tour operation Industry: an Exploratory Study", International Journal of Hospitality and Tourism Systems, vol. 4, no. 2, pp. 30.
Farahani, R., Rezapour, S., Kardar, L. & Books24x7, I. 2011, Logistics Operations and Management: Concepts and Models, 1st edn, Elsevier, NL.
Filby, N.E., Stockin, K.A. & Scarpaci, C. 2015, "Social science as a vehicle to improve dolphin-swim tour operation compliance?", Marine Policy, vol. 51, pp. 40-47.
Filby, N.E., Stockin, K.A. & Scarpaci, C. 2015, "Social science as a vehicle to improve dolphin-swim tour operation compliance?", Marine Policy, vol. 51, pp. 40-47.
Gavino, M.C., Martinez, P.G. & Malos, S.B. 2010, "Contingent Employment Relationships Between Tour Guides and Tour Operators in Ecuador: Human Resource Management Practices and Attitudinal Outcomes", Employee Responsibilities and Rights Journal, vol. 22, no. 3, pp. 213-234.
He, Q. & Wang, X. 2012, "Realization of sustainable development of tour engineering land: Guided by the government and participated by the public", Trans Tech Publications Ltd, Zurich, pp. 3628.
Hu, W. & Wall, G. 2011, "Tour Guide Management in Hainan, China: Problems, Implications and Solutions", Asia Pacific Journal of Tourism Research, , pp. 1-15.