Unit 2 Tour Operation Management Assignment

Introduction

The basic concept of tour operation management is to evaluate the tour operators and their related aspect within the travel and tourism industry specifically. It mainly facilitates with the management of the business of tour operators and help in identifying the related practices in the market. The present report is been therefore developed with the intentions to focus on the business practices of the tour operators and their related aspects in details. The report would be identifying the key trends and developments which affect the tour operators in the industry of UK. It would be focusing on various methods being used by the tour operators for contracting for different activities of a holiday. It would be even assist in evaluating the planning decisions being taken for the selection of the brochure along with the distribution methods being used to sell the brochure in the market. The report would be basically including the detailed facts and information about the tour operation of TUI travel Plc which is a multinational tour operator management of UK.

Task 1

1.1 Evaluation of the effects of current trends and developments on the tour operator

Change is an ongoing process and could take place in any of the manner such as either with the trends or the developments in the industry. There had been immense change in the tour operator industry due to the changes in the trends and development in past few decades. It has been observed that the industry had been modified with the changes in these trends in the market which had laid both the positive and the negative impacts over them.  There are huge amounts of trends and development which could be identified in the tour industry and had impacted the functionalities of the organisations flourishing in the industry (Mariani.et.al, 2014). In context to the TUI travel Plc, it is found that the organisation had been impacted with the trends and developments prevailing in the current time. Some of the basic trends and development affecting the organisation are:

Trends and developmental trends on the tour operator industry

The trends and developments are the aspect which keeps on changing with the changes in the market conditions or the business  environment prevailing in the industry. These trends are found to make various impacts over the tour operators in both the negative and the positives aspects. Some of the most common trends and development of the tour industry are:

• Technological developments
• Emergence of customer centric approach
• Emergence of e-commerce technology
• Discovery of unique and untouched places
• Increased purchasing power
• Advanced marketing in tourism
• Increase in the independent travellers

 

 

Some of these trends and developments majorly impact the tour operators to the great extent. With the increase in the technological advancements, people have become much aware about the travel activities and the industries which had made them incline towards the organisations. With respect to the functionalities of TUI, it has been found that the people are getting influenced towards the discovery of new destinations and travelling due to the increase in their income levels which made them spend more on the leisure activities. Thus, the industry had been greatly affected by these trends and developments and have availed large number of  profitability out of it.

Task 2

2.1 The stages and timescales involved in development of the holidays

With the increase in the number of tourist, it has been seen that the tour operators are tending towards the attractive customised holiday packages being developed on the basis of the customer expectation, desires and demands specifically. With the purpose to expand the functionalities, TUI had recently developed a holiday package concerning the Chinese students for a tour to Paris and France from London, UK.  The estimated number of students for the tour are 45 and the tour is been planned for not more than 5 days. TUI with this purpose would be following specific steps so that ensure effective development of the holiday and reach to the desired levels of outcome (Butcher and Smith, 2015). The steps which would be used by TUI for developing the holiday package are:

• Conducting market research: With the finalisation of the destinations, it is very much important to carry out a market research so that to collect relevant facts and information to the specific location and make plan over it. The research and development team of TUI would be collecting information about the attractions, market conditions, weather, trends, entry fees of the sightseeing locations, transportation facilities, accommodation, food, miscellaneous expenses, etc.  This would assist in making an estimation or idea about the financial planning along with the cost of the package. This would even help in making plan and schedule for the tour based on the locations and the transportation facilities between the distances effectively.
• Total itinerary development: Based on the collected information by the research team, the management of TUI would develop a plan for the entire journey including all the amenities to be provided to the travellers. It has been found that the organisation would be making a systematic plan involving all the activities which would be carried out throughout the journey (Guo.et.al, 2013). This would help in ensuring the success of the tour in a systematic and effective manner.
• Negotiation with the suppliers: Negotiating with the suppliers would be contributing in the reducing the cost of the tour and avail fare discounts or benefits out of the deals. It has been found that the negotiation with the hotels, airlines, etc. would help in getting the reservations as well as the facilities on reasonable costs.
• Financial planning: Financial planning would help in making proper budgets for the package so that to make proper arrangements of the finances. With the help of this financial management planning, TUI would be able to identify the cost of the package including their profits and would set the prices accordingly (Bosun.et.al, 2014).
• Marketing of the tour: It is very important to carry out a marketing campaign for the holiday package so that to make the people aware about the package and grab the attentions of the people eventually. TUI would be making use of the online sources, brochures, social media, etc. which would contribute in spreading the information effectively.

However, the planning would be completed approximately in 6 months. The planning of the schedule is been indicated with the help of a Gantt chart below:

Table 1: Gantt chart

In order to ensure the effectiveness of the tour package, TUI would be making use of various types of contracting with the suppliers or the service providers so that to avail attractive benefits out of the package. TUI had made prior contracts with the hotels and airlines to reserve the number of seats or rooms for the Chinese students and provide them with the best satisfactions. Getting the accommodation and transportation facilities reserved for the destinations for 5 days so that to avoid any kind of the inconvenience to the tourists. There are approximately 45 students expected to travel through the holiday package for which the booking has been done. However, the tour operator had undergone with two basic types of contracts to get the facilities reserved. Following are the contracts:

2.2 Suitability of various contracting methods for different elements of the holiday and different types of tour operator

• Fixed contract: The fixed contract is basically termed as the contractual relationship which lasts for a specific period of time and is been carried out for the specific purpose. TUI would be initiating the bookings by getting into fixed contracts with the hotels and airlines so that to ensure the availability of the services. This contract would help the organisation to avail the volume in the off season depending upon the expected capacity and enhance the profits of the business (Kärcher, 2013). As per the norms of fixed contract, it has been found that the non-usage of the capacity would not be beard by the service providers and would have to be paid by TUI only.
• Ad hoc: This contract facilitates with the planning and arrangement of the cost of the contract based on the activities to be conducted throughout the tour either daily or hourly. TUI had entered into this contract on the discounting rates with the hotel and the airlines for travelling to Paris and France and had made the bookings as per the needs (Bailey, 2013).

Following are the four basic types of tour operators:

Figure 1: Types of tour operator

• Outbound tour operator: These particular types of tour operators are been mainly specialised in designing and promoting multinational trips especially across the borders. The tour operator basically makes arrangements of the travel and tourism documents, transportation to the destination and get into contract with the inbound operators to provide with the services like accommodation, local sightseeing and additional services required during the tour.
• Inbound tour operator: Inbound tour operators are mainly who deals directly with the inbound foreign tourists, providing them with the services such as accommodation, transportation, entertainment, etc (Witt.et.al, 2013). TUI is been known as the leading inbound tour operator and offers the services either individually or by collaborating with the other tour operation across the countries.
• Domestic tour operator:  The domestic tour operator mainly operates within the home country only and fulfils the needs of the group travellers or the individuals. These types of operator mainly promote their tour packages by using both the outlets and the travel agents.
• Ground tour operator: These tour operators are basically referred to the destination management companies, reception operators and handling agencies which facilitate the other tour operators with the assistances in the foreign countries (Page, 2014).

2.3 Calculation of the selling price of the holiday

The package is to be planned for 45 students and the tour period will be of 5 days. Rooms would be shared by two persons. The cost of the package would be calculated in pounds and the cost in euro is converted to pound. The conversion rate is 1 Euro = 0.86 pounds

Total number of rooms = 45/2 =23 rooms 
Cost of Hotel for 23 rooms for 5 days =54 * (0.86) * 23 * 5 = £ 5340.6
Cost of B&B for 45 students for 5 days = 45*12*0.86*5 =£ 2322
Charges of coach = £ 5400
Charges of local guide = £ 900

Table 2: Calculation of selling price

PARTICULARS	Cost of hotel	Cost of supplement	Charges of coach	Charges of local guide	Total cost	Profit margin (20%)	Actual selling price
FOR 45 PERSONS (£)	£ 5340.6	£ 2322	£ 5400	900	13962.6	2792.52	£ 16755.12

 

Fixed cost of package is =£ 13962.6 
Profit margin of 20% = £ 2792.52
The actual selling price of holiday package would be = £ 16755.12
Cost for one person =£ 372.336

Task 3

3.1 Planning decisions taken for the design of a selected brochure

Brochures are been considered to be an effective way of promoting and advertising the holiday packages being developed by the tour operators. It is very much important for the tour operator to make effective decisions over the designs of the brochure as to attract the customers to the large extent. TUI is required to keep some of the basic feature of brochures which grabs the attention of the people and influence them to more towards the tour packages. The management of TUI has been planning for a adventure holiday package and thus needs to make efficient decision over the designs of the brochures. Following are some of the basic aspects which must be focused while designing a brochure:

Format of the Brochure: Presentation is the most important aspect which influences a reader towards any of the matter. It is very much important to focus on the format of the brochure so that to provide the readers with an ease to go through the content. The format must be clear and concise as it has been commonly said that first impression is the last impression and the reader would only continue when the initial format is attractive (Lupton and Phillips, 2015).

Persuasive Message: In order to avail fruitful results, it is very important to target the right market and convey the right information among them. TUI must ensure the relevance of the content being used to convey the actual information so that to influence the people in desired manner. The details regarding the holiday package such as destinations, attractions, transportation, accommodation, schedule, costs, website details, contact details, etc. must be included so that to make the customers aware about the package. The organization must even depict all the charges and no hidden charges must be kept.

Figure 2: Brochure for adventure holiday

Attractive Design: The brochures must be attractive so that to grab the quick attentions of the people towards it. It is important to make use of the pleasant colors so that to make the readers delighted with the looks. The presentation would encourage the readers to read the brochure and get aware about the package effectively (Anastasiadou and Migas, 2016).

Unique and Distinct: The brochure must be unique and uncommon with the other so that to influence the people with an innovative concepts. Bringing new innovation and creativity in the brochure would provide with the brand recognition to TUI and would develop its brand image as well.

3.2 Suitability of the alternatives to a traditional brochure for different types of tour operators

With the emergence of new creativity and innovations in the means of the promotion, the tradition brochures are also been replaced by various alternatives being adopted by diverse tour operators. In the recent times, the tour operators distributes the brochures either by making use of the physical or the online sources which influences the customers to the great extent. In order to promote the adventure holiday package, TUI could make use of the direct mail brochure which would assist in approaching the customers easily and effectively. TUI could even make use of the visual brochures which could facilitate in influencing the customer through attractive picture of the specific destinations and the adventurous activities.  This initiative would help in grabbing the attention of the customers and attract them towards the package (Goodall and Ashworth, 2013).  With the purpose to cover the wider market segment, TUI could make use of the social media sources such as Facebook, Twitter, Instagram, etc. which would help in spreading the information to the large platforms. Concerning the specialised tour operators, promotional brochure would prove to be profitable and effective in promoting the planned tour successfully. Therefore, with the help of these alternatives TUI would be able to avail the desired number of customers and cover a wide range of customer segment.

Figure 3: Adventure tour

3.3 Evaluation of the suitability of different methods of distribution used to sell a holiday

 There are immense numbers of methods which could be used by the tour operator to sell the holiday package in the market. With respect to the holiday package of TUI, brochures would be the most suitable way of selling the holiday within the target market. It has been recognised that the effective layout and design of the brochures along with effective information helps in influencing the customers to the great extent. TUI could even make use of the methods such as social media marketing, direct sales, telephonic sales, online marketing, emails, etc (Senders.et.al, 2013). Email marketing could be used to circulate the brochures to the existing as well as the new customer segments specifically and make them informed about the packages in details. TUI could make use of the social media and direct sales method for selling its holiday so that to enhance the probabilities of attaining the higher numbers of responses towards the adventure holiday package.

Task 4

4.1 Evaluation of the strategic decisions made by different types of tour operators

To meet the standards of the organization, different strategic decision are taken by the organization for its fulfillment. TUI Travel PLC had developed strategies by considering the discount pricing strategy, customer relation, seasonal aspects and distribution decision. The following strategic decisions are:

• Discount pricing strategy: Discount pricing strategies are made to seek the high number of consumers to avail the tour package. Discount amount with fixation of price of a particular tour package is an important decision which is generally associated with fixed price contract (Hinterhuber and Liozu, 2012).
• Customer relation: TUI Travel PLC is a leading organization which mainly focuses on the trust between the organization and customer. It assures quality services to the clients which satisfies them. Products and plans are made considering the need of the customer, including the health and safety issues. While taking the decisions, growth and efficiency of the organization would not be affected.
• Seasonal aspects: Seasonal aspects been considered before development of any tour package. Peak season and off season affects the demands of the tour package. In peak seasons, high discounts are offered to the customers by arranging tour in desired destination place (Evans.et.al,  2012).
• Distribution decision: The customer can demand any product in any situation, the organization should avail the requirement of the customer. The decision of distribution should not be complicated that may lead the customer to more for other organization. TUI Travel PLC matches with the latest technology going on in the market that matches the needs of the customer.

4.2 Comparison of the tactical decisions which could be taken by the tour operator in diverse situations

Tactical decisions are short term that affects the organization for a short period of time. These decisions are made in daily routine of business which helps to activities effectively. Important aspects such as hotels, restaurants, taxi, etc are the part of tactical decision. Tactical decisions being taken by organizations are as follows:

• Price discrimination
• Utilization of resources
• Price wars

 TUI Travel PLC mainly focuses on the prices, so that large revenue is taken out of the decision.  On the other hand Cox and kings decides the variable prices so a customer could get affordable prices. Organizations are focussed on delivering quality services to their target customers (Hannak.et.al, 2014). The basic objective of an organization is to optimise the use of resources. The decision of pricing is most important decision that makes the organization to attain sustainability in the market.

Conclusion

The above report concludes that the tour operators industry had been changed drastically due to the changing trends and development in past few decades. It has been revealed that it is very much important for the tour operator to make effective decisions over the designs of the brochure as to attract the customers to the large extent. The report identified that TUI could even make use of the visual brochures which could facilitate in influencing the customer through attractive picture of the specific destinations and the adventurous activities. Moreover, it has been also found that TUI could make use of the social media and direct sales method for selling its holiday so that to enhance the probabilities of attaining the higher numbers of responses towards the adventure holiday package.

References

Books and journals:

Anastasiadou, C. and Migas, N., 2016. Individualising the Tourist Brochure: Reconfiguring
Tourism Experiences and Transforming the Classic Image-maker. Mediating the Tourist Experience: From Brochures to Virtual Encounters, p.123.
Bailey, P., 2013. Working-Class Organisations and Popular Tourism, 1840–1970 by Susan Barton (review). Victorian Studies, 55(3), pp.512-514.
Bosun, P., Tenescu, A. and Dima, I.C., 2014. Informational stocks and e-logistics management of a tourism company. International Letters of Social and Humanistic Sciences, (27), pp.75-85.
Butcher, J. and Smith, P., 2015. Volunteer tourism: The lifestyle politics of international development. Routledge.
Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and tourism. Taylor & Francis.
Goodall, B. and Ashworth, G. eds., 2013. Marketing in the Tourism Industry (RLE Tourism): The Promotion of Destination Regions. Routledge.
Guo, X., Ling, L., Dong, Y. and Liang, L., 2013. Cooperation contract in tourism supply chains: The optimal pricing strategy of hotels for cooperative third party strategic websites. Annals of Tourism Research, 41, pp.20-41.
Hannak, A., Soeller, G., Lazer, D., Mislove, A. and Wilson, C., 2014, November. Measuring price discrimination and steering on e-commerce web sites. In Proceedings of the 2014 conference on internet measurement conference (pp. 305-318). ACM.
Hinterhuber, A. and Liozu, S., 2012. Is it time to rethink your pricing strategy?. MIT Sloan anagement Review, 53(4), p.69.
Kärcher, K., 2013. Reinventing the Package Holiday Business: New information and communication technologies. Springer-Verlag.