Unit 14 Worldwide Tour Operation Management Assignment

Task-1 Examine the recent trend and developments in the tour operations sector with a brief analysis of the type of holidays taken and the emerging popular destination.

According to World Trade organization (WTO), travel and tourism sector is major economic growth driver for not only developed countries but also for the developing countries as well. Standard growth rate for tourism sector in UK is more than 4% per annum which is much more as compared to the other major sector in the country such as manufacturing, IT and telecommunication etc (Syratt, 2003). Some of the major emerging trends in context to UK and worldwide travel and tourism sector can be given as under:

• E-commerce technology: E-commerce technology in the travel and tourism segment has enhanced the popularity of travel and tourism segment. E-commerce technology has developed the need of tour operation managers so that tours can be purchased through online medium. E-commerce technology also helps for consumers to gain information on the package and schemes.
• Paper money: Advancement in the paper money segment has allowed consumers worldwide to purchase the tours through cards so that it’s easy to make transactions through online medium.
• Increasing spending power: Consumers in UK are having high spending income due to which there is higher spending made by them on the lifestyle items such as tourism packages. Further one of the key segments in UK is older age people with more than 10 million people in UK with age more than 65 years of age. These people are having high income range (Swarbrooke, 1999).
• Niche tourism segment: There are several niche consumer segments emerging in present age which are offering wide opportunities for the tour operation managers to design tour package by studying the consumer requirement and offering package for them.
• Customization for holiday package: Consumers are looking for high degree of customization with their favorite destination, choice for hotels, food and entertainment medium. Tour operation managers are having key role in order to fulfill consumer demand for the customization in designing tour packages.
• Market research: Market research has played key role in recent time for understanding the consumer requirement and based on the consumer behavior for purchase of tour package offerings are made by the tour operation companies.
• PESTEL analysis: PESTEL factors are important and define the tour and travel industry around the world. PESTEL analysis factors include political, economic, social, technological, environmental and legal factors. Depending upon the PESTEL factors pertaining to a particular country tour and travel trends are decided in the country (Johnson et al, 2008).
• Higher focus on customer satisfaction: Tour and travel industry being a service oriented industry has high focus on the customer satisfaction parameter. In order to develop customer satisfaction it is important that tour operation managers design package in such a way that real benefits offered are higher as compared to the expected benefits.
• Role of government authorities: Government authorities are playing important role in order to invest into the travel and tourism activities and distribute information among the consumers around the world.

Holiday or travel can be for different purposes such as the business travel, leisure travel and visit to friends & family etc. In UK consumers have high spending for the visit to friends and relative while the major spending in holidays would be for the business travel (Thomas cook, 2010). Emerging popular destination for tourism in the world is UK for its heritage, cultural, business and architectural sites. Brazil is emerging as tourist destination due to the sports events in coming time after Olympics held in UK in recent time. Burma is also among the emerging tourist destinations wherein tourists are visiting for colonial charm. Croatia will join EU and one of the popular destinations due to its beautiful cities (Holloway, C. 2002). Ecuador is South American city popular as its capital Quito is UNESCO world heritage site. Ethiopia is emerging destination due to its adventurous and cultural travelers. Greece due to great value for holiday is also attracting consumers around the world.

Task-2 Prepare an itinerary for a heritage plus wildlife beach holiday and develop a package with stages ( evaluate the destinations and attractions, appropriate timescale, and the components of the package to be purchased with contracts).

2.1 Assess the stages and timescales involved in developing holidays.

Planning should be done for development of a good tour package as it includes analysis of the location, research activities, customer’s needs are understand and negotiations with the service providers (Porter, 2014). Developing a package for the selected location would take around 1 year time. The key activities of planning can be discussed as:

Careful examination of the destination place - In the present case, three different locations has been selected, St. Lucia as the Beach location, UK as the Heritage location and Kenya as the Wildlife location. These locations would be examined with respect to environment, cost factors, nearby famous areas and restaurants etc.These factors needed to be pre checked and this examination would take about 3 months time.

Research - Research activities include the investigation of the available facilities or services that can be provided to the consumers for their satisfaction and for enhancement of tour features. The duration of around 2 months can be taken for the research work under the planning process. To ascertain that such activities can be performed in the destination place, the concerned area is first researched.

Negotiation - Negotiation is done with the various service providers for availing transportation facility, lodging facility and other required facilities for the tourists and this process would take around 3 to 4 months.

Tour development - After fixing the service provider, finally the tour is developed involving various facilities to be offered and the tourists are informed about the benefits of the package. For the communication purpose, promotional activities are done like offering the tour package via online portals, pamphlets, huge banners and advertisement.

Financial evaluation and pricing - Financial aspects of the tour needed to be evaluated in terms of checking currency prices and overall costing so that the pricing can be done accordingly keeping in mind the profitability estimates. Two types of pricing mechanism are there- cost oriented tour pricing and market oriented tour pricing.

Administrative Staff - In on-season there is requirement of human resource in right numbers. For proper managing of human resource appropriate recruitment and selection process needs to be developed so as not to face any excess or shortfall in the staff at peak times.

Marketing tour package- To make more customers aware about the various aspects of tour package, marketing is done by means of online and offline methods. Selection of advertisement media depends upon the target segment marketing.

Tour operator’s brochure - Brochures act as a major marketing tool for the tour as they contain full information regarding the tour package, sites therein and destination covered.

Post tour management - In Post tour management customer survey is being carried out to know the overall customer satisfaction index by noting their experience from the tour services.

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

For the purpose of tour designing, two methods are adopted by tour operators which are Fixed contract method and Sale only contract method which are discussed here under:

Fixed Contract - Due to off season sale shortage this method is availed by the service provider in which he charges for the volume based capacity for maximizing their revenue. Thus, the total capacity is booked by the tour operator rather than as per actual consumption. Due to high volume of people seeking the tour package high discounts are offered in these types of contracts. And because of high discount tour operator get the benefit of large number of people availing the tour package (William, 2010).

Sale only Contract - These contracts have high cost as compare to fixed contracts as they are made in lean season. The un-utilized capacity is ignored and the contract is designed as per the needs of the target customers. The Sale only contract gives special attention to the prospective consumers and includes various facilities with high costs. Such type of contract is somewhat risky as there is risk of weak response for a specific tour package designed for a particular segment.

The above discussion clearly shows that both the contracts have merits and demerits. The Fixed contract method contains high discounts, pre decided profits, advance booking etc. while the sale only contract focus on target customers and reduce wastage of funds by non-payment feature of un-utilized capacity.

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

In the present study, our agent is assigned the responsibility for arrangement of accommodation in Kewarra Beach resort in 3 star hotel in UK (the heritage destination site). Using the fixed price contract this hotel is booked in 30 pounds on twin sharing basis. Thomas cook airlines are booked for 80 passengers on fixed contract basis. Ignoring the actual capacity utilized all the payment is to be done in advance. Total air fare per person decided is 130pound. Further, for local traveling from coach, taxi or other conveyance charges are 10, 35 and 100 respectively. Entertainment charges are charged as 40 pounds per person (Kelsey, 2014). The total tour package charges would be 355 pounds per person and 535 pounds per couple as the case may be.

Table 1: Showing the total cost involved in package of UK heritage destination.

Sr. No.	Package Details	Sale Price/ person	Sale Price/Couple
1	Charges for transportation via airplane	£130	£240
2	Transportation Local By Coach By Taxi Representative visit	£10 £35 £100	£20 £55 £100
3	Booking for Hotel	£20	£30
4	Other charges for sightseeing and music	£40	£80
	Total Cost	£ 335	£ 535

The above table shows that the prices for various facilities have been shown both for individual and couple. 

Task-3 Design and plan a brochure and assess the suitability of alternative methods (non-traditional) of communication and promotion.

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

Brochures are being used by the travel and tourism industry as a medium for communicating the key information about the tour package to the clients. In the present context, a study about the designing and implementation of brochure of Thomas Cook would be taken. Brochure distribution is done in order to impart the whole knowledge of the available tour package to the respective maximum people in a very low cost. In order to develop a suitable and attractive brochure as per the requirements, it is very necessary to go through the entire process of planning, organizing and implementation activities properly (Levy, 2010). For designing brochure first comes the planning phase and some of the decisions related to planning of designing present brochure are discussed here as:

Identifying issues affecting planning decisions - Various issues are needed to be identified before designing a suitable brochure like segmenting of target market, layout, objective for conveying information, available time limit for generating the brochure etc. These factors affect the decision pertaining to designing of brochure for tour and travel agencies.

Format of the Brochure - The whole layout and format of brochure is designed in accordance with the target consumer segment and the information to be conveyed with the consumers. Information like tour company name, tour duration, and description of destination, service of the ground operators, transportation price, extra charges and any health hazard related issues should be well described in the brochure (Lewis, 2013).

Budget consideration and Target Market - In the context of Thomas cook, target market contains the niche segments. Budget factor should be kept in mind as it would define the spending habits of the target customers.

Time limit and stages - Within the prescribed time limit, the designing of brochure of Thomas Cook should be completed. The whole process of planning, organizing and implementing must be accomplished within the time range allocated to each stage.

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

The present task would enumerate the numerous alternatives to a traditional brochure for different types of tour operator for attracting large number of customers. Due to new technology it has become vital to implement new changes in the traditional brochures. E- Brochure system is a very easy way to communicate and attract with customers worldwide. An attractive brochure would surely make the customer desirable to know about the tour operator’s offerings. Such new alternatives in the traditional brochure would attract more customers and high revenue (Paulo, 2012).

Using online method for deigning of the respective brochure would help in reaching a larger number of people covering large network thereby enhancing the revenues. As compared to traditional physical brochure system, e-brochure is very cheap and fast and helps in reaching large number of people. Also, visual images have more impact and clear understanding for the viewers. Thus, Thomas cook should adopt visual medium to offer more clarity and eye catching feature in their brochure.

In the visual medium, the images of the concerned destination place like St. Lucia beach are displayed along with the presentation of key features of the destination place to attract customers. Such visual brochures are easily promoted via online social media sites viz. Google+. Further, video brochures can also be developed with the help of online methods and can be marketed through internet marketing tools for promotion. In video brochure there is sound facility too along with visual pictures of destination. Video brochures have very low cost as they can be easily uploaded on You Tube with very fast promotion worldwide.

Examining all the aspects discussed above, Thomas cook is advised to use a combination of all the brochures. Such brochure should be designed which contains the features of video brochure, visual brochure and e-brochure. The final brochure developed should have the combine benefits of all the brochure types so as to be more attractive and easily approachable for the customers (Poon, 2010).

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

Various methods can be availed for selling the holiday package for Thomas cook group. These methods can be direct sale method, online trading, sale via telephone, promotion and sale by call centers etc. 

Under the direct sale method sale trough online media can be made to the targeted customers. Using this method of distribution by Thomas cook group would result in targeting a larger customer base with apparently very low cost. The whole information regarding the destination place is given in the selected brochure by means of online media.

However, for the purpose of distributing holiday tour package, email marketing tool can also be used by different tour operators to inform the consumers about the different tour packages. By the use of email facility, first the target consumer segment is identified and then complete information is send to them for their consideration regarding the available tour package. External Agency’s help are also taken for promotion purpose to enhance the sale of tour package. With the help of call centers, the sales executives by making telephonic calls to the respective customers try to convince them to avail the benefits of tour package (Sachdev, 2013).

Hence, after considering all the benefits associated with the various distribution methods, Thomas Cook must adopt a combine method and it can use direct method or distribution system by online media to sell the available tour package to the target customers.  

Task-4 Understand strategic and tactical decision making for tour operators.

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

Tour operators made numerous strategic decisions in their business. Such decisions which are taken in their day to day normal routine business can be regarding design and development of a brochure, price fixation decision for the offered tour package, and selection of the distribution method and identification of particular customer segment. Strategic decisions are highly critical and taken with due diligence by the organization (Sheldon, 2010). In order to run the travel and tour business smoothly which comprises of many flexibility in some elements, there is requirement of quick decision making ability at every step of business for producing better results and to build profitable business image. The key strategic decisions pertaining to tour and travel business can be discussed as:

Segmenting, targeting and positioning - It is the key decisions which act as the base for all other strategic decisions. To analysis the present situation the targeted market segment is to be identified by tour operators so that the tour package can be designed and developed as per the requirements of the prospective target customers. Afterwards the services which can be offered to them are defined in order to meet their expectations in the pre defined budget.

Discount pricing strategy -  For availing a high number of customers for the tour package, discount pricing strategy is being used by the tour operators. The discount amount is calculated with respect to the price fixed in the contract of a particular tour package. In seasonal packages, customers are offered high discounts. An appropriate pricing strategy can only be developed taking in consideration the earning capacity and spending habits of the target customers (Streeter, 2012).

Seasonal Aspects - There is much seasonal affect on travel and tour business as off season and peak season affects the overall demand of tour package. During the peak season, customers are offered high discounts for attracting more customers and for generating high revenue for the business. Due to seasonal change in demand, the pricing structure and selection of the destination place affects a lot.

Competitive pricing strategy -  Analysis of competitor’s price for the same trip is also very necessary for determining own price structure to attract more and more customers. Competitive pricing strategy decision helps in making affective decisions to face the challenges of the competitive environment very well. With the help of such decisions, customer loyalty is achieved despite of a highly competitive market.

Promotional strategies - Promotional strategies involve making such decisions that would be used for promotion of the tour packages by various means within the budget. Promotional techniques used by the tour operators helps in lifting the business profitability by generating high income. A suitable promotional tool helps in informing and attracting the customers toward the tour packages.

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

Generally, many tactical decisions are made in business including negotiations with the service providers, accommodation or lodging arrangement with food and other facilities. In the present scenario, Explore and Regal Dive can be taken as examples which are the two major scuba diving holiday tour package companies. There is price war between these two tour operators resulting in slashed prices. The whole mechanism of decision making can be described stepwise as:

Step 1 List of all the service providers for the proposed services is prepared first.

Step 2 Then for inviting quotations proposals are sent to the selected service providers.

Step 3 In accordance with the pre defined budget the most suitable quotation is selected. Such selection is done keeping in mind the cost minimization factor along with good services to the customers.

Step 4 If possible personal meeting should be done with service providers selected in accordance with price suitability and quality of services offered to the customers.

The entire process requires tactical decision making right from pricing strategy to negotiating policy. Taking feedback and assessment of customer experience is also a tactical decision (Poon, 2010). Such assessment is being done to solve the problems faced by the customers as solving of previous problems by taking corrective actions would help in regaining the customer confidence to make them come back again for availing another tour package.  

References

• Syratt, G. (2003) Manual of Travel Agency Practice (3rd edition) Oxford: Elsevier Butterworth-Heinemann 
• Porter, M, E., (2004) On Competition, updated and expended edition. 5th edition. Boston: Harvard Business School Publishing. 
• Thomas cook (2010) Just book it. [Online] Available from: http://www.thomascook.com/?sinav=topnav_home_TC. [Accessed 6 March 2014]. 
• William. J (2010) Mass market tourism details [Online] Available from: http://www.enotes.com/business/q-and-a/what-mass-tourism-leisure-travel-recession-tourism-178425 [Accessed 6 March 2014].

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