Unit 14 Tour Operations Management Assignment - XL Leisure Group

Introduction

XL Leisure Group is the leading travel company in the UK which is operating their business in various countries. The current study will analyze the effects of present trends on tourism industry. The Unit 14 Tour Operations Management Assignment XL Leisure Group will summarize the various stages involved in developing holidays and identify different kind of tour operators like Inbound, Outbound tour operators. The study assists to calculate the selling price of holidays. The report studies the planning decisions taken through brochure and suitability of alternatives by traditional brochure for the tour operators. The study will implicate the different methods to sell a holiday package to the customer by the tour operators. The study also throws light on the different  business strategy  adopted by the tour operators to sell the packages. Further study depicts the tactical decision which helps the tours operators in different situations.

Task 1

1.1 Outcome of current and recent trends in tour operating industry

XL Leisure Group is a leading travel and Tourism Company of UK which operates its business in different parts of the world. Company provides package holidays to the customers of different nations. The UK based company was established on 12^th September 2008. The organization provides various services to the customers. Leisure Group is private owned company which provides services like airlines, holiday and tour packages to the customers. The main aim of the company is to satisfy the customers by providing quality services at reasonable prices (Leisure Group, 2016). Company offered premium quality products like scheduled flights, charter planes, tour packaging etc.

Impact of current trends on the travels and tourism industry: Tourism sector is growing rapidly by the changing trends in the market. Tourism companies are facing cut throat competition in the market due to advance technology, increase in purchase power of the customer, customer satisfaction. Following points depicts the outcome of present trends on the tourism industry:

• Development in technology: Technology is the major factor in the growth of tourism industry. Tourism sector is increasing their markets by using various technological mediums like internet, social media etc. Leisure Group provides facility to the customers to book tickets online and customers can easily get the information of their booking. Organization provides facility to the customer that they can easily cancel the tickets. Technology development has bought a new revolution in travels and tourism industry. Technology is the most important part in promoting the product of the tourism industry. Tour and travel industry attract the customers by using marketing campaigns on the social media. Leisure Group has designed the website by which any customer can easily get the detail about the company and book the ticket through either by contacting the representative of the company or by using the facility on website (Chon, 2013). Development in technology has changed the ways of communicating with the customers like Leisure Group contact the customers through mail, social media, application software etc. Perception of customers has also changed as they are more interested in booking tickets online. Overall the trend of online transaction has increased in past few years.
• Purchasing Power of the customer: Another trend which has impacted the  travel and tourism  industry is the buying power of the customers. Company is designing the packages according to the budget of the customers. Leisure Group is designing the packages in the form of different class of the customer like business class, service class etc. Increase in spending power of the customers has raised the market share of the company in financial terms and geographic area (Kapiki, 2012). Organization like Leisure Group designs the packages according to the need of the customers and also considers the buying power of the consumers. For example if a customer wants accommodation in a 5 star hotel and lunch and dinner in normal restaurants than organization may design the package according to the budget of the customers.
• Customer satisfaction: The foremost objective of Leisure Group is customer satisfaction which increases the market share of the company. Customer satisfaction decides the future of the organization and informs the company to improve the quality of services. A satisfied customer can advertise the company to different customers by mouth to mouth publicity.  (Hiltunen.et.al.2013). A satisfied customer may choose the same tourist company repeatedly in future and this assists company to have good brand image in the market. New customers can easily approach to the travel operators with the reference of existing customers. Customers are the most important part while designing the packages. Leisure Group has to design the package according to the demand of the customer by which company will be able to achieve the desired objective and satisfy more customers.

Task 2

2.1 Various stages and timescales involved in developing holiday packages

Planning the package is the most important task for the organization. A well planned tour package can be sold easily and also satisfies the customers. The planning of a tour package has various stages. The following are the stages which assists company to develop the holiday package:

• Market Research: The first stage of planning the tour package is to research the market trends like price of competitors, consider service providers, faculties, consumer demand etc. These all factors needs to be considered by Leisure Group while developing the holiday package (Kärcher, 2013). Organization should develop the plan according to the demand of the customer. To analyze the demand, company has to do the research of the customers and their expectations. Management has to identify the culture of different countries before deciding the packages like demographic markets, interest and activities of the customers, seasonality demand etc. Operators have to research about the competitors like at what price the other company offers similar products, in what areas they deals and their features of products. Research facilitates the organization to analyze the current market trend of the industry and assist to mould the prices according to the demand of the customers.
• Planning and Scheduling: The next stage of designing the package is planning and scheduling of package according to the time. XL Leisure Group identifies the suitable time to travel and set the best accommodation standards for the customers. Organization estimates the number of passenger and plans the trip according to the number of travellers. Management plans the trip according to the facilities, attraction and accessibility for the customers.
• Contracting: Leisure Group has contracts with the various service providers like transportation companies, air lines agencies etc. Organization books the tickets in advance for the customers. Tourist companies need to take decisions based on quality hotels, transport agencies to complete the planning of tour (Evans.et.al.2012). Travel operators try to negotiate the prices offered by the hotels; restaurants etc and book them at the minimum prices which assist the operators to attract the customers. Contracting assists management to provide suitable services to the customers by merging them in the brochure of the business
• Costing the holiday: The next stage is cost of the holiday package that the operator examine the prices of package that what is the cost of accommodation, transportation, and rental cars and then remove the unnecessary expenses
• Pricing: In this stage Leisure Group keep the necessary services and adds the profit margin. Company set the profit margin according to the economic condition of the market and customers (Glasson.et.al.2013). Management tries to keep the price according the price of the competitors.
• Create the brochure: After completion of the above steps, the next task is to design the brochure in which management will mention all the details to the customers (Lumsdon, 2016). Details like cost of the package, facilities, destinations, time of departure, accommodation details are included in brochure. Leisure Group designs the brochure in a way that customers can easily identify the important points of the tour.  It is the vital marketing tool which motivates customers to buy the product. It can be online or in printed form.
• Advertising: Advertising is the mode to get in touch with public and inform them about the services provided by the company. Company organizes the campaigning to educate the customers about the trips planned by the organization.
• Operation and Execution: In this step the management execute the plan with the customers and perform the task according to decided operations (Canavan, 2014).
• Post tour management: This is the last step of planning in which management conclude the trip and collect the feedback from the customers that how they feel about the company, the services provided met the expectation or not. At the end operators make the payment to the suppliers and travel agents for the rendered services (Hassanien and Dale, 2013). Company evaluates the plan that what went wrong in the plan which discomforted the customers.

2.2 Different methods of contracting for different components and different types of operators

Contracting facilitates company to pre book rendered services that creates the customer base for the company. Contracting facilities help management to serve better services to the customers and helps in determination of the prices of the products (Smith, 2014). It is difficult for the company to invest on the accommodation, hotels and other facilitates so company commit various aspects of contract  with the hotels, travel agency etc. Contracts are of different types which assist organization to serve better.

• Fixed Contract: In this contract company commit the hotel companies to book the rooms in advance and also pay in advance. The companies charge this kind of expenses from the customers in advance. It is advantageous for the hotels that if all the rooms are not occupied but still the hotel get paid (Witt.et.al.2013).
• Allocation: This kind of contracts are popular in hotel industry that commit contract with the tour operators that company has to confirm the agreed date to the hotels and number of rooms. For example Leisure Group has contract with the hotel Marriot that in January 2016 company need 20 rooms. In this context Leisure Group needs to give confirmation about the booking. In this contract hotel have the right to sell the remaining rooms at the competitive price. Another contract in allocation is with flight operators that company pre book the seats, extra book or look for the seats (Riley, 2014). The company has to give confirmation before six to eight weeks of departure.
• Ad-hoc contracts: Ad-hoc contracts are the contracts which assist Leisure Group in overbooking. This kind of contract facilitates company to arrange extra accommodation for the customers. Ad-hoc contract help management to commit the contract when company need (Mostafanezhad, 2013). For example at the time of season, the number of tourists gets increased and ad-hoc contracts can be used to meet the additional requirements.

Different kind of operators: Operators are those who operate the business under the name of company. Operator’s assists management generate strong customer base in the different parts of the world. Operators regulate the policies designed by the Leisure Group. Tour operators work as agents for the company and to raise the profits for the organization. Different tour operators perform various activities are as follows:

• Outbound tour operators: This kind of tour operators provide special kind of packages to the customers and sell the packages to the potential clients. Outbound tour operators promote specialized packages for the customers and develop them continuously by adding different kind of luxury services. Outbound tour operators provide facilities to the travellers to travel to different parts of the world. Companies operate their business in one country and facilitate customers to travel in another country. For example Leisure group sell the trips to Thomas Cook to enter in another country (Alegre.et.al.2013). Outbound operators commit the contract with inbound operators which take charge at the time of arrival.
• Inbound Operators: This kind of operators provide services like entertainment, currency exchange, local tour activities etc. Inbound operators serve directly to the customers in which they design the plan for the customers and serve to them. This kind of operators fulfils the needs of local customers who reside in UK and want to move in UK only. The services provided by these operators are coach tours, heritage tours, and travel by rail (Espinet.et.al.2012). Example of inbound tour operators are British Tours Ltd, UK inbound, Anderson travel.
• Domestic operators: domestic operators entertain the customer of UK only. This kind of operators provides services in their home country. The area of this kind of operators is limited and serves to limited customers. Products of this kind of operators are coach holidays, farm holidays, day tours etc. The example of domestic tour operators are Leisure break tours, cultural tours, Luxury vacations (Caruana.et.al.2014).
• Ground Operators: Ground operators handle the clients of different companies and provide facility to the customers like accommodation, rental cars, sightseeing, travel, information about several places etc.

2.3 Calculation of selling price of a holiday

For calculating the selling cost, the Euro had been converted into Pounds.    The conversion rate considered is 1 Euro = 0.79 Pound. The duration of tour will be 5 days. Since the rooms are shared on twin basis, thus total of 8 rooms will be required.

Table 1: Selling cost

Particulars	Per head amount  (£)	For 15 persons for 5 days (£)
Cost of hotel	60*0.79	1896
Cost of supplement	10*0.79	592.5
Cost of coach	1000	1000
Charges of local guide	200	200
Total cost		3688.5
Profit margin (10%)		369
Actual selling price		4057.5

Fixed cost of package = £ 3688.5
Profit margin would be 10% = £ 369
The actual selling price of holiday package would be = £ 4057.5
Cost of Package for an individual = 4057.5/ 15 = £ 270.5

Task 3

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

The most important tool for merchandising in tourism business is brochure. The role of brochure is to enhance business. It highlights the features, sells packages, tap into new markets and features a special offer. Brochure helps in targeting market segments.

• Customer – the brochure of XL Leisure Group fulfils the aspirations and needs of customer. It contains the information needed by customers to make decisions related to booking or purchase. The customer of tourism services aspire or need comfort, indulgence, adventure, relaxation, excitement, enjoyment etc which should be demonstrated in the brochure (Smith, 2014).
• Unique selling features – the brochure of XL Leisure Group should maximize the features which are unique selling feature of XL Leisure Group. The features should be presented in bullet form and not whole description or narration.
• Format and design – the format and design of brochure should follow the principles of AIDA which stands for gaining Attention of customer, developing Interest, creating Desire to purchase and call to Action.
• Maps and images – brochure should contain the map showing all routes to XL Leisure Group at the back page of brochure. It should contain images related to target market enjoying such as family pictures or business travellers.
• Use of colours, pictures and fonts – the presentation of brochure will be effective only if appropriate colour, images and fonts are used. The size of font should not be too small to be readable or too large to cover more space (Smith, 2014). The images should be selective and effective and content should be written in two or three colours.
• Sequence – the information in the brochure is required to be presented in correct sequence. It includes a front cover mentioning the name of organization and single statement defining the product or services dealt by organization. It can also contain a picture and slogan to attract customer. Second page should include the facilities and features such as good  food safety and wine, comfortable rooms, etc. The back page should include a map, logo, name and address of organization.

3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operator 

There are various challenges in marketing of tourism, reaching to target market and convincing them to travel to desired location (Dolli and Pinfold, 1970). The main issue for tourism is promotion and ensuring customer satisfaction. There are different types of tour operators namely Inbound Tour Operators, Outbound Tour Operators, Domestic Tour Operators and Ground Operator.

XL Leisure Group should adopt alternatives to traditional brochure to attract large number of consumers. One of such technique is E-brochure. It is cost effective and reaches large number of people. The cost of designing E-brochure is also less (Nistoreanu, 2006). Another alternative is visual brochure which provides opportunity for consumer to see the beauty of tourism destination. Video brochures can also be used as an alternative by associating them with social media tools such as you tube, Facebook etc. XL Leisure Group should integrate all these alternatives for efficient promotion and conveying the correct message to the target consumer (Dolli and Pinfold, 1970).

The given figure shows a combination of video on YouTube, brochure on website and popularity of e-brochure.

• E-brochures can be accessed 24x7 and 36 days. They can be made available on website or can be mailed to target consumers. They can be associated with sound effect and music and can be made available on you tube, flash or video. They are environment friendly, have wider reach, easy to access, colour theme, background sound, can be searched and if required can be printed out.
• Video brochures can be accessed by internet and can be downloaded. It conveys the message effectively. The consumer feels connected. It also helps in attracting niche segment.

Large number of companies in tourism industry is making use of visual brochures to entice potential travellers (Warta, 2011). The above mentioned alternatives are suitable for different types of tour operators as they have wider reach, flexible, easy to be accessed by customers, attractive and effective.

3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for different types of tour operator

The different types of tour operators include – Inbound Tour Operators, Outbound Tour Operators, Domestic Tour Operators and Ground Operator. Inbound Tour Operators provide services to foreign tourists in collaboration with foreign tour operators. They are image builder of the country. Outbound Tour Operators sells tour packages to customers of his own country to visit other countries. Domestic Tour Operators sells tour packages within the boundary of home country. They are contributor to national integration. Ground Operator provides services of land arrangement for other tour companies at a particular destination. They provide services such as car rentals, transport operators, entertainment organizations, etc.

XL Leisure Group can use different methods of distribution to sell holiday packages such as direct sales, online marketing, e-mail marketing, telephonic sales, etc. It is important to make use of both online and direct method to sell holiday packages.

• Direct sales – it is traditional method of distribution and is cost effective. It will allow XL Leisure Group to interact with target consumer face-to-face. It can be done through exhibition to reach large number of people. It provides direct and first hand feedback of consumer.
• Online marketing – it is the most common way of distribution these days. It has become popular because of increasing use of internet. It provides a platform to reach large number of consumer. Online marketing can be done through website, e-mail, social media, etc (Smith, 2014).
• E-mail marketing- any mail sent to prospective customer is part of e-mail marketing. It generally includes sending brochures, ads, discounts, or just for brand awareness via mail to prospective consumer.
• Telephonic sales – it also provide direct feedback of customers regarding travelling plan. It is more interactive way of distribution and promotion. The query of the customer can be resolved on the spot. The results of telephonic sales are measurable (Smith, 2014).

By evaluating all the different methods of distribution used to sell a holiday for different types of tour operator, it can be concluded that all the methods have their own advantages and disadvantages. Thus, a tour operator should not depend on any one method of distribution but it should adopt a combination of these techniques.

Task 4

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

Strategic decisions are complex and long term decisions which influence the functioning of whole organization. These decisions are mainly taken by top management. There are various strategic decision made by different tour operators. The strategy adopted by XL Leisure Group is to cater to needs and aspirations of end consumers. The strategic decision includes – pricing strategy, targeting, segmentation, positioning, promotional strategy and competitive strategy.

• Pricing strategy- Tour operators adopt fixed price contract to provide high discounts to customers. They also design tour packages. It helps operators in attracting customers (Kärcher, 2013).
• Segmentation, positioning and targeting - Tour operator’s analyses their competitive positioning by segmenting industry, selecting target segment and determining positioning strategy. It helps them in determining other strategies such as pricing strategy (Lumsdon, 2016).

This figure shows the strategic decisions made by tour operators include segmentation of market and adopting a marketing tool to grasp that segment.

• Seasonal pricing - Tour industry is influenced by seasons such as lean and peak seasons. The prices differentiate in particular season from other. The prices are kept competitive as compared to other tour operators. It is done to attract more number of consumers.

Tour operators determine promotional strategy on the basis of budget of promotion and effectiveness of promotional tool. The profitability of tour operators depend on the strategy framed (Lumsdon, 2016). It can be concluded by analyzing the various strategic decisions made by different types of tour operator that there is change in trend is noticed in relation to orientation such as organizations are growing customer oriented and not considering promotion as an expense.

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

Tactical decisions are comparatively less complex than strategic decisions. They are medium term decision and are taken by middle level management. There are various tactical decisions taken by tour operators which include – maintaining relationship with several stakeholders, tying up with several service providers in supply chain, evaluating customer experience, etc.

• Maintaining relationship with stakeholder – To build a good relationship with various stakeholders, it is important to be transparent. The operators should take responsibility of the mistakes made. Make the process of booking as easy as possible for customers to book with tour operator (Smith, 2014)
• Tie-up with service providers – To build relationship with various service providers, tour operators should offer reliable service and remain flexible. It should stick to the terms of contract signed with service providers.
• Evaluating customer experience- It should consider and respond to feedback of client. It should ensure that the customer relationship is gaining firsthand experience. Providing discounts to customers also help in developing relationship with customer (Riley, 2014).

All these efforts come under tactical decisions taken by tour operators in various situations. Comparing the tactical decisions taken by a selected tour operator in different situations, it can be said that the focus of tour operator is to coordinate and satisfy all the stakeholders. They attain this objective by remaining transparent, flexible and considering feedback seriously.

Conclusion:

The Unit 14 Tour Operations Management Assignment XL Leisure Group implicates that Leisure group has positive impact of current trends which has raised the profits of the company and created strong customer base. The report depicts that technology plays a vital role in the growth of the organization and supports company to attract customers digitally. The report analyze that various stages involved in while deciding the price and what are the stages that assists management to design the plan. Research plays vital role while deciding the plan. The study describes the different types of contract which facilitates organization to serve better services to the customers. The current report evaluates the role different tour operators while creating the strong customer base for the company and provide efficient services to the visitors. Report helps to analyze the price of the holiday packages for different persons. The report helps the manager to evaluate the planning decisions to draw the brochure and suitability traditional brochure for different tour operators. The study implicates the different methods of distribution used to sell the holiday packages by the tour operators and their strategic decisions. The collected information helps to compare tactical decisions taken by tour operators in various situations.

Refrences

Books and Journals

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Hiltunen, M.J., Pitkänen, K., Vepsäläinen, M. and Hall, C.M., 2013. Second home tourism in Finland: Current trends and eco-social impacts. Second home tourism in Europe: lifestyle issues and policy responses, pp.165-198.
Kapiki, S.T., 2012. Current and Future Trends in Tourism and Hospitality: The Case of Greece. International Journal of Economic Practices and Theories, 2(1).
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Mostafanezhad, M., 2013. ‘Getting in Touch with your Inner Angelina’: celebrity humanitarianism and the cultural politics of gendered generosity in volunteer tourism. Third world quarterly, 34(3), pp.485-499.
Riley, M., 2014. Human resource management in the hospitality and tourism industry. Routledge.

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