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Sample of Tour Operation Management

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Introduction of Tour Operation Management

This report helps in investigating the tour operators industry of the travel and tourism sector. It also includes different type of operators and products and services offered by them. It explores stages involved in creating a holiday package and determining selling price of the holiday package. This report also discusses the role of modern advertisement tool and a comparison between modern and traditional advertisement tool used by the tour operators. This report also explain the strategic decision making and tactical decision making taken by the tour operators to establishes them in the industry for the long time period.

Task 1

I am working as tour operator for “TUI Group” of London, UK. I have prepared a report of organizing sightseeing tour for a group of 45 Chinese students. The tour is organising from London, UK to Paris, France. It is a 5day tourist plan. The tour plan is for summer vacation in August 2018.

1.1) Assess the stages and timescales involved in developing holidays

Following stages are involved in developing holidays:

Research:

London and Paris differs politically , socially, economically and legally from China thus as a tour operator I need to research every aspect for the tourists students from China. I have involved the most attraction places in London and Paris like La Villette Park; Canal sent Martin, Eifel Tower, and Montmartre etc of Paris, France (Filby, Stockin & Scarpaci, 2015) because the students from different country leads to increase the country's tourists income so their satisfaction is very valuable and thus this stage of research has vital role.

1.Gathering Evidences-

As a tour operator after taking into account all the- research above, I will gather the evidences to make the tour successful and attractive. The plans should not be built on assumptions or limited knowledge because there is a good saying that incomplete knowledge is more dangerous than no knowledge because it could lead to disaster. These evidences includes all the details related to well managed service providers, tourists guide, legal authorities, reputed hotel services,

2.Packaging Cost Analysis -

After whole research and gathering evidence, the other step is to analyse the packaging cost as per the tourist plan and the consumer need. Tourist group need to deal with various consumers of different status and it is the responsibility of group to satisfy each consumer requirement. Therefore, tour operator should have the various plans to satisfy the consumer requirement with regard to their financial status and their expenditure capability.

3.Arrangements and negotiating service providers:

For sightseeing in London and According to my plan I will start the tour package from London. I will make arrangements for flight tickets from china to London for the group members and assembled at hotel near by airport. The whole group assembled there at night and then in departure for Paris from there. I have made all the arrangements for their living at the hotel. For travelling purpose I will hire a 50 seat Luxury bus from bus service provider. There will be a tour guide also. I made negotiations with the service providers. All the arrangements for staying will be made in Hotel St Michelle of Paris by us for the whole plan prepared keeping in mind that the whole group of student received full satisfaction with the services provided by us. We are only make arrangements as per the requirement of group. As a tour operator, I also required to identify the alternative destinations because the emergency factors like climate change and other environmental changes could lead to spoil the pre-determined plans and can lead to various complaints from the tourists as time and money is precious for them. Thus it would lead to effect the goodwill of the 'TUI' Group and my reputation as the tour operator.

4.Fulfil legal requirement:

I will also make arrangements as per the legal regulations applicable on tour operators. I will make arrangements for Air Travel Organizer Licence (ATOL) which is managed by CAA in UK , internal visas and make other arrangement for the Paris tour which is applicable as perlaw (Applegate, Bixby & Chvátal, 2009), so that the students need not go through mental hazard during tourism after reaching the destination. All the preventive measures should also be kept in mind for any unwanted incidence like loss of passport, visa etc. because the tourists at new place have no idea about legal procedures and requirements at this stage. It is the duty of the tour operator to confirm the safety and security to maintain its goodwill.

5.Promotion Strategies-

This is last stage where marketing manager is required to use a suitable promotional strategies which can help to promote their products effectively.

1.2) Suitability of different methods of contracting for different components of the holiday and different types of tour operator

There are many parties involved in this tour plan like travelling agencies arranging flight tickets for the whole group, Bus service provider, Tour Guide and hotel. There are different types of contract options available with us we can make contract as per the nature of party and requirement. Once negotiation is done company is required to make contract with their different suppliers and service providers. The contract options available to us are as follows:

Fixed contract:

In this type of contract, companies are focused on the maximum revenue collection in the peak time. Such kinds of contract are help in the volume based capacity which is more concentrate on the maximum utilization of capacity. TUI group requires that in the session time. But in the situation when the numbers of customer are law, company faces financial looses.
Sale only contract: This is another approach which can be used in the off season and especially for the selected or niche customer segment. Such kinds of contract are highly expensive for the company and customised for the premium customers.
Once careful analyses of both approaches are done then the company is required to determine the pros and cons of both method and take corrective decisions at the pre decided level.

1.3) Calculate the selling price of a holiday from given information below

Travelling agency has established network with partners in France and prepare a plan which provides selling rate of the holiday package as a whole and for each student.

Calculation of selling rate of the holiday package:

  Cost Calculation Amount
  Cost of Rooms 45*54*5 12150
  Cost of BB 12*45*4 2160.00
  Total variable Cost   14310
  1euro=0.9pounds    
  variable cost in pounds 8370*0.9 £12879
  cost of bus   £5,400.00
  cost of guide   £900.00
  total cost of tour   £19179
add profit margin 20%   £3835.8
  total sales price of tour   £23014.8
  number of students is 45    

The above table shows the whole calculations of selling price where fixed cost remain unchanged and variable cost is the cost which is directly proportionate to number of students in the package, i.e. it varies with number and increasing as well as decreases proportionately. Since, we need to calculate the selling price in pounds, therefore, the variable cost in Euros need to be converted into pounds first then direct cost need to be added . Direct cost is the cost which is directly related with the product cost, which does not change with the change in no of students’ up to the certain level. As per the above calculation sheet company are expecting 20% profit margin form it.

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Cost per student=511.44 Pounds

Task 2

As a tour operator of “TUI Group” London I am working with the marketing department of my company for assessing the different strategy used for selling tour packages by company and planning for designing an attractive brochure.

2.1) the planning decisions taken for the design of a selected brochure:

Brochure is used as advertisement tool in tourism industry. It can be used as off line and on line tool for conveying information regarding the attractive tour packages and selling prices of tour packages to consumers. We are planning here to develop an attracting brochure for new tour packages because brochures having many advantages like it has low cost, high reach to the large group of customers, brochure can solve quarry regarding the product of company, provide the channel where people can get more information about the product and give information to people if any attractive offer made by the company. For designing new brochure proper search and planning is required.

Factors to be considered for planning related issues: Issues like structure of brochure, objective of brochure, matters involve in brochure, type of customers and time scales are needed to be considered while planning for brochure. Planning for a brochure design involves following steps:

1)Decide budget for brochure design:

Before starting planning a budget should be designed so that all cost can be controlled.

2)Objectives:

Decide the objective for which the brochure is designing. We have to decide our target customers so that designing of brochure becomes easy.

3)Target Customer:

decide the group of customers should be targeted by the brochure.

4)Collection of samples:

For starting planning for brochure started collecting different samples of brochures. Collecting those designs which are preferred mostly in the industry and collect information about the style, language graphics etc are used in that brochures and then select a suitable.

5)Decide format:

Second step is design a format that how the brochure will look like and what will be the colour scheme of the brochure and also ensures that the format should not be matched with the brochures of other tour operators.

6)Draft Matter:

Draft the matter which is going to present in brochure. It should be considered that matter should be small but includes whole information about the services of tour operate.

7)Fixing time period:

Fix a time period for brochure designing so that it will complete on time.

All these steps are followed in designing brochure for “TUI Group” this will result an effective brochure design for the consumers (Tricoire, Graf & Gutjahr, 2012).

2.2 Assess suitability of Traditional brochure option available to tour operators of “TUI Group” and Thomas Crook and appropriate brochure for “TUI Group”:

Traditional offline Brochure option is also available to with the both organisations “TUI Group” and “Thomas Crook” of tourism sector. With the advancement of technology Thomas Cook group modernise its advertisements strategy and change their medium from traditional brochure to E- brochure. E- Brochure designs are more benefited then traditional brochure printing which includes:

1)E- Brochures are flexible marketing tool than traditional brochures because we can choose and design our e-brochure as we like but it is not possible with printed brochures.

2)E- Brochures are time effective than traditional printed brochures because they can easily be available at any place and at any time.

3)E- Brochure can approach a lot of consumers at a time by sending the brochure online one can take quick response of consumers.

4)E- Brochures are also environment friendly than traditional printed brochure there is no waste of paper.

5)E- Brochure is a cost effective tool. It cuts marketing expenses to a great extent.

6)Easy to change: Designs of E-brochure can easily change and updated. If any need have change in the format or matter arises than it can be changed easily. This could not be possible with traditional Brochures.

7)New technology and graphic designing helps in giving high quality look to e-brochure. E- Brochure even can give feel of printed paper.

8)E- Brochures are easy to download it is not possible that we want and get brochure in our hand in case of traditional printed brochure.

9)Brochures are not only attracting potential customers but they also impressed potential supporters, investors and funders.

E- Brochure provides much benefit to the company in terms of cost and profit also. As Thomas crook already adopt e-brochure as marketing tool so, TUI Group should go with the option of adopting E- Brochure. E- Brochures can turn out to be more profitable for the business because they are easily assessable for everyone (Slumkoski, 2010).

Traditional Brochures –

Traditional brochures are the most common and effective tools by the company and organisation provide information and summary to the wide audience. It is a single foldable sheet used by the marketers to highlight a product, company or service. It can be folded into template pamphlet, leaflet etc. These are distributed under newspapers, handed over personally door to door or at the high traffic locations.

These brochures are of different types like Bi fold, tri-fold, z-fold, c-fold etc. The basic disadvantages of traditional brochure is that it has very narrow market and it includes large amount of manpower which leads to utilisation of the time and money on large scale and it also leads to wastage of paper to large extent because brochures once distributed cannot be recollected. Therefore e-brochures are much beneficial than the traditional brochures.

2.3) 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.

There are many options available for distribution of services to a tour operator many of them are adopted by Thomas crook. TUI Group should consider each option of selling services and select suitable one. Distribution channel includes following options:

a)Direct Sale:

Direct sales means contact directly to customers without any intermediaries through conducting visits, mail order or online and control over presentation of offers and their price structure. Interacting with customers helps in receiving quick response from them and then change marketing according to them.

b)Hiring agents:

Hiring agents for marketing the services of company is another option available in distribution channel. Agent helps in providing more customers to company and take commission for that. Here direct interaction with customer is not possible but services can be provided easily to them.

c)Partner:


Another option for selling services is enter in partnerships with related and non competing business .Tour operators can sale their services with the partnership of bus service provider or they can enter in partnership with hotels. But in y=this tour operators can only offer limited services to their customer.

d)Opaque Distribution:

Here services are reselling by some other sellers at a low price or at discount here the customer does not know about the actual seller of services. Travel and hotel industry adopt this tool now a days.

e)Online sale services:

tour operator can sale his services through online medium. E-brochure is tool adopted by tour operators to sell their services

As there are different distribution channels available for the tour operators whit help of these channels they can sale their services. Thomas crook competitor of “TUI Group selling its holiday packages through direct sale, telephonic sales and call centre etc. TUI Group may adopt direct sale option by employee more sales executives. They may also hire agents for selling their services and they can also sale their services online to the customers offer. For adopting these channels tour operators should have effective marketing strategy. So the company can use online and offline method for selling the services (Prideaux, Wei & Ruys, 2010).

Task 3

3.1) the strategic decisions made by different types of tour operator:

Strategic decisions are related with whole environment of the organisation in which a firm operates the entire resources and the employees of the company. Strategic decisions having great importance for any organisation. Strategic decisions deal with the range of organisational activities. Strategic decisions are made by top level management they are very complex in nature and deals with the future of organisation and involve lot of risk. Strategic decisions. Strategic decisions taken by tour operator includes following issue:

1)Pricing strategy:

Formulate strategy regarding Prise structure is a most important decision. It is required to be taken by the top level management. Strong prising strategy is required to formulate by the tour operators. Many of the tour operators adopt discounted prising strategy where they offers services at a fixed rate to customer but offer high discount to them, tour operators can also go for economic pricing strategy in this they offers their services at a lower cost.

2)Seasonal Strategy:

Season play a very important role in Tour industry. Tour operators should also frame strategy related with seasons because change in season affect the tour plan of customers. Strategy plans help tour operators in framing different holiday packages as per season requirement. For the seasonal strategy management must know that in which season their targeted customers are like to go on tours.

3)Segmentation, targeting and positioning Strategy:

In this strategy three stages are involved segmentation identify different groups of customers for tour and travelling purpose. Targeting means select a particular group of customers for providing services to them and then positioning all efforts towards the selected group of customers to sell them services. This strategic decision also affect on pricing and promotion decisions so proper review of the situation should be taken before formulating STP strategy.

4)Competitive Pricing Strategy:

To beat existing competitors of the industry a strong competitive pricing strategy is required. Market research is required while formulating competitive price strategy. Competitive market strategy is very helpful and beneficial for the company because it attracts customers from the market and develops loyalty in customers in the high competitive market.

5)Promotional strategy:

Promotional strategy should be creative because it will help the tour operator to promote their holiday tour packages. New technology and modern tools of promotion should be adopted by the tour operator for the promotion of different tour packages.
While strategic planning tour operators should take care about different key factors because achievement of strategic goal is depend on these factors. These factors involve engagement of staff of all levels, strong communication, creativity, project management and culture of the organisation. TUI Group and other tour operators should take strategic decisions regarding own price strategy, competitive price strategy, marketing strategy, promotion strategy and seasonal strategy considering their visions and mission statement. On the basis of strategic decisions tactical and operational decision are taken by tour operators to carry out day to day functional activities of company (Potgieter, 2010).

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

Tactical decision making involves decision related with the longevity, profitability and continued improvement of all areas of operation. Tactical decisions are taken by the tour operators so that they can deal with day to day operational activity of business. Tactical decisions are formulated on the basis of strategic decisions taken by the company. Tactical decisions help tour operators in ruining the business in a smooth way. Tactical decisions cover following:

a)Tour operator can formulate short term pricing policy on the basis of strategic decision regarding price. Thomas Cook and Cox tour operators’ offers different holiday packages at a reasonable price. They both provide a wide range of holiday packages and tailor its packages toward the satisfaction of needs of the customers.

b)Many tour operators’ offers financial services to their customers in the form of car hire facility, airport parking facility, airport hotels and currency exchange facility etc.

c)Tour operators try to communicate with their customers for the purpose of direct selling of their services through telephone, call centre, mailing and sales executives and help them in deciding tour pancakes with an objective of increasing profitability and customer loyalty.

d)Some tour operators like Cox prepares tactical plans for achieving objectives and focusing on the strategies of its competitors.

e)Tour operator made more advertisement to attract more customers towards their services. They adopt e-brochure as an advertisement tool.

f)Many tour operators includes in its service product coin telescope and binoculars which help the perspective customers in collecting more information regarding other services and packages.

g)Many tour operators like Cox and Thomas Cook focuses on health and safety measures in flights for its customers this effort will increase faith and loyalty of customers towards the company.

h)Tour operators take a tactical decision about tie up with the several service providers. Before tie up with service provider’s type of customers catered and pricing policy should be considered.

i)To carry out customer research programme is another tool of tactical decision making. Under this tour operator collect information regarding customer’s knowledge about holiday packages and with the help of the data tour operator prepare different and attractive holiday package for them. This will also help tour operators to find out problems regarding tour packages and framing remedial actions for them.

j)Other tactical decisions regarding the tie-ups with various service providers and organisations to make their product successful in the market. For example, marketing manager is required to communicate with their advertisement agencies to promote their product and services which can help to attract large number of customer in market and firm can attain organisational goals and objectives.

k)Another tactical decision is taking feedback from their customers which can help to increase the customer satisfaction level.
Thus different tactical decisions are taken by different tour operators in different situations arises towards them (Chand, 2011).

Conclusion

The report provides information regarding tour operators industry. It explains hoe a tour operators develop stages for designing holiday packages along with calculation of selling rate of holiday packages. This report gives a brief introduction about E- Brochure and its benefits over traditional printed brochures. This report describes strategic planning decisions and tactical planning decisions taken by different tour operators.

References 

  • Applegate, D.L., Bixby, R.E., Chvátal, V., Cook, W., Espinoza, D.G., Goycoolea, M. & Helsgaun, K. 2009, "Certification of an optimal TSP tour through 85,900 cities", Operations Research Letters, vol. 37, no. 1, pp. 11-15.
  • Brunner, J.O. & Stolletz, R. 2014, "Stabilized branch and price with dynamic parameter updating for discontinuous tour scheduling", Computers & Operations Research, vol. 44, pp. 137-145.
  • 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.
  • Drozdowski, M., Kowalski, D., Mizgajski, J., Mokwa, D. & Pawlak, G. 2012, "Mind the gap: A study of Tube tour", Computers & Operations Research, vol. 39, no. 11, pp. 2705-2714.
 
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