Tour Operators in Travel Tourism Assignment

Tour Operators in Travel Tourism Assignment

Introduction

In this Tour Operators Travel Tourism Assignment present world where the contacts between the people living in various countries are so quick, the people travel to various countries owing to the multinational operations of the company and the lifestyles are so busy that the people think of travelling to locations for holidays and the ultimate goal is to have rest and peace away from the busy and polluted life of the city. Thus with the present scenario of the world with globalized economies and companies and a rise in the income levels of the company, the demand for the tourism industry has risen. The current tourism industry is estimated to be around 500 billion $ for the Chinese tourist alone and is one of the highly growing industries in the world (Hodgson, 2016). Also the industry works in close correlation with the travel industry for the travel needs of the tourists and the hospitality industry to meet the needs of tourists including hotels or accommodation, food and other such facilities. Thus there is a trend in the recent world where the three industries work in close cooperation with each other. Also there is a need or want in the people living in the modern society to move to various destinations for sports or adventure, honeymoons, family holidays, business tours, nature lover instinct, etc. Thus there is a trend in the industry to specialize the operations as per needs of the various customer segments and plan all the things including destination, accommodations, travel, etc as per the needs and budgets of the segment. The study basically aims to discuss these trends in the industry and understanding of the process of designing of the holidays. The various marketing planning activities that the firm goes in while targeting the customers are also addressed in the study through the light on planning, contracting and selling price calculation for a holiday package through the case of the Chinese students in group travelling from London to Paris for a tour Also the use of brochure and modern methods of marketing have been discussed here. Finally the various strategic and tactical decisions making by a tour operator has been discussed. Thus the study aims to develop a complete understanding on the various aspects of working of a tour operator in modern tourism industry.

Lo 1 to understand the tour operations industry within travel and tourism

1.1 Analyze the effects of current and recent trends and developments on the tour operators industry

The present tourism industry has rose from the days of providing the customer with services only for accommodation or travel and it now provides a complete package of services including food, accommodation, travel, city tours, money exchange, visa facilities, transfers and pick u2p from hotels, etc. Tour operators are the providers of the tourism needs of the customers and mostly it is done through use of inclusive packages. Many tour operators in UK and other parts of Europe are represented by British Incoming Tour Operators Association. Presently around 600 tour operators are functional at UK. This could be made possible to the customers through close integration of the three industries travel, tourism and hospitality (Lucy, 2015). There is a significant growth in the tourism industry around the world with the increase in the purchase power of tourists and continuously increasing needs and wants associated with tourism, as in case of UK it maintains a growth rate of 4 % even when the economy is not growing so rapidly. One of the recent trends is that the customers do not need to book for tours months before they actually use the services. Also there is a trend to fluctuations in the prices of tours for different seasons in order to ensure business all around the year. As the tour operators book mass accommodation, flights and other services so they are capable of providing packages to be purchased by the tourist at the last moment. The modern world tourists make use of internet for making purchase and gathering information about destinations and services. The social networking including Facebook and twitter has a quite important role in increasing and impacting the purchase of tours and it also leads to word of mouth publicity for the tour operators like Cox and Kings for providing best and specialized services.

The modern tourists are involved I buying all the services ranging from travel booking, city tours, accommodation, food, etc online due to presence of global companies online and make payments for these services through use of e cash. Also the trend of use of mobile tourism services in the tourist enables them to search for services while the course of tours and hence the company must attract them through the sure of best prices while offering package as the customers are becoming smart. The current world is getting aware about the sustainability of operations in the business and thus wishes them to contribute to the provision of eco friendly operations and this also applies to major tourism companies.  Due to pollution and busy life styles of the modern people, there is a need or a segment of customers who wish to go to clean, silent and natural tourist destinations. There is a trend in the modern tourism industry towards personalization and almost all the tour operators provide customization of dates, modes of travel, etc in order to suit the requirements of the tourists. There is an increasing competition pressure in the tourism industry and the modern tour operators are facing problems due to dynamic packaging apart from diversion of business by others in the industry through the use of common internet based platforms (Hall, 2010).

The provision of food during the old days of the tourism industry used to be an additional part where as in the present scenario the food along with wines, etc is made an integral part of the hospitality at the tour packages. The modern business customers wish to have services like access to Wi-Fi during the course of travel, conference halls in hotels where they stay, etc in order to suffice to their business and client handling needs at destinations (Page et al, 2008). The tour operators now design and develop the packages and the services with utmost care to the segment of the tourists like honeymoon couples, business class, students or educational purposes, sports or adventure lovers, etc. As a trend in case of UK tourists, the people completely switch off from work during their tours and 72% of the tourists behaved like this in 2013 (Lucy, 2015). The focus is on exploring new destination that are untouched and can help to generate unforgettable memories for the tourists. Chinese tourists are the highest spenders in the world tourism and the companies are placing special focus and research in order to meet and identify their needs to the best. The international tourism needs of the customers are growing an as per reports the tourists will be 47 % more involved in international tours by 2020 as compared to 2013. Thus the tour operators must analyze these trends to make their business survive and thrive.

Lo 2 understand the stages in creating holidays

2.1 Assess the stages and timescales involved

There are various stages in creation of the holiday packages by the tour operators. The first stage is identification of the needs and mindsets of the targets in order to identify what can motivate them to buy this kind of package. As in case of Chinese students visiting to Paris during the summer vacation 2018 for a 5 days tour from London, the needs may involve education purpose apart from enjoyment of summers. This stage is very important in making the sales effective and may involve a time frame of around a month and must be based on research. The next stage in the process is research of the location or the destination. As in this case the destination is France mainly including Paris and the place is known for its art and architecture apart from having the beauty that attracts the tourists from around the world. This stage may involve a time period of around one month for the tour operators. The next stage is contacting and making relations with the service providers including flights, car rentals, hotels, food, guide services, etc and this may involve a time period of around 2 or 3 months for the tour operators. The next stage involves negotiation and contracting with the service providers and making the supply chain of the tour operators as competent as possible. It may involve a time period of around 2 months and this leads to creation of the competent price for the tour operators by entering in contract with the service providers at negotiated prices (Hodgson, 2016). Final stage is marketing which involves designing and planning of brochures, advertising, etc in order to reach the target markets and inform them about the availability of the services that could help in satisfaction of their needs and wants.

2.2 evaluate the suitability of different methods of contracting for different components of holiday

There are different kinds of tour operators as in case of the UK alone there are more that 600 tour operators. The various kinds of tour operators in the tourism industry includes (a) Mass tour operators where the focus is on selling high volumes of packages and includes Thomas Cook, first choice, etc, (b)Domestic tour operators like those tourist companies which provide tourist needs in one country only like only tours in UK provided by the tour operators WA Sheerings , (c) Inbound tour operators is including tour operators providing services to the tourists visiting from the globe to UK and providing for their needs in the country as London is one of the prime location for tourists around the world and (d) Specialist tour operators like Cox and Kings which focus on serving to the needs of the special segment of customers and develop a niche in the travel and tourism markets like providing tours to a particular country or offer a particular kind of packages like honeymoon or sports packages only. These companies are increasing due to the differentiation of the needs and want of the tourists and serve individual needs rather than the mass markets (Mendoza, 2008).

Tour operators provide the customers with various services and hence are supposed to enter in to contract with various tour services provider including food, flights or travel, accommodation or hotels, transfers, city tours, guide services, etc. The different methods of contracting can be used by the tour operator in contracting for the services but it is mainly done through use of either fixed contracts or Sales only contracts with the service providers. In case of fixed contracts, the tour operators book a fixed amount of services say the flights or hotel rooms and they have to bear the risks if the demand is not substantial especially in case of off seasons. The other method of contracting the various components of the tour services is through making payments for only that part of services that is being used by the tourists and as per the sale of a particular type of package (Wurtzburger, 2008). In case of Chinese students, visiting to Paris from London on a 5 days tour during summers, sales only type of contract can be made by the tour operator.

2.3 calculate the selling price of a holiday from the information

The selling price is the most important decision for the tour operator and the various considerations should be taken in mind while planning the pricing for the tour package. The customers in the modern world are smart enough to make use of internet services and get involved in dynamic packaging (Lew, 2008). Also as the Chinese people are the leading most spenders in the tourist industry and they are very much used to internet based websites for planning and buying the services and also in making use of other such tools including geo targeting. Thus the tour operator must act prudently and prices must be well negotiated with the suppliers. As the students are supposed to visit France in a group of 15 and the company has negotiated the prices at 60 Euros with the St Michelle hotel at France on the twin sharing basis and 10 Euros for extra BB for a person for a night. Also the company has negotiated with the travel company who has accepted to provide a luxury coach at the rate of 1000 Euros including all the service charges, taxes and driver charges for 20 person.  The selling price of the tour package for  a group of Chinese Students in a group of 15, planning to visit Paris France in the summer vacations around August, 2018 and with the tour starting at London, UK and lasting for around 5 days could be estimated as follows:

Thus the cost per person could be estimated (2800 Euros for 15 students) to be around 187 Euros/Person for the 5 days tour from London to Paris.

Lo 3 be able to review the brochures and methods of distribution used to sell holiday

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

 In the old days of the tourism industry, the printed brochure was the most important concern for adding tangibility to the intangible nature of the services provided by the tour operators. It is useful as the prospect could read the relevant information about the tourist destination, prices, services provided and having a look at the images of the tourist destination. However in the case of the family decision making for the tour purchase the prospect can take away the brochure and this used to be a meaningful tool for allowing the family members to gaze in to the overall experience provided by the tour operators. Around the maximum and even 50 % of the budgets of the traditional tour operators used to be focused on the printing, planning and designing of the brochures however the modern tourist are more and more becoming savvy to make use of internet services to view and purchase the tour services, thus the web based brochures have become an important tool for the modern tour operators as also it allows to reach the world at minimal expense (Karanasios et al, 2008). The planning and design of the brochures involves a team of experts making research about the destination, planning of contract with the various elements of the service provided at the tours, estimations of the costs, etc. Thus the brochure is an integral part of the planning and marketing activities of the tour operating organization. The brochure must be capable of providing the information about the destination, prices, services, etc in a very discrete manner that must be appealing as well through the use of images of the destination. Also the company tries to design the brochure in the most effective way to improve the sales generation and tries to maximize the reach of the brochure as far as possible with in the given resources and constraints. Also the characteristics of the target audience are important in design and planning of the brochures like for the honeymoon or young couples the brochure must be designed to celebrate love and must be designed with images of young couples at the destination along with certain graphics and the red color. Thus the characters of the targets also play an important role in designing of the brochures.

3.2 assess the suitability of alternatives to a traditional brochure for different tour operators

The traditional tourist companies made use of attractive brochures in order to ad tangibility to the highly intangible nature of the tour services provided by the various kind of tour operators and also it was suitable to the mass tour operators like Thomas Cook which help in designing of standard packages with certain inclusive services.  The traditional brochures provide meaningful information regarding making booking, complaints, price, ancillary service, etc and are quite different from those used by Thomas cook in the earlier days which used to look like a magazine (Britten, 2009). These provided valid support for decision making as in case of family holiday packages provided by Thomas Cook. The other alternative to the traditional brochures are those available online through emails to the prospects available on demand from the websites by leaving the email address. Also the audio visual brochures are circulated through use of social networking sites in order to attract the target as the people in the world are connected on the social networking media and are prospects for many of the tour packages like the youth can be focuses in case of sports focused tours. While in case of specialized tour operators like Cox and Kings, the high level of customization in the tourist destination and the level of services provided at those destinations, the traditional brochures hold less useful as compared to internet based brochures. Also, in case of specialized tour packages the target customers are mostly the youth, like in case of adventure or sport focused tour packages or people using the internet. Moreover the use of videos about the destination could be made available on the online or emails of the prospects and this kind of brochures are far more effective in closing the sales or the making of actual purchase by the clients (Abubakar et al, 2014). Also the procedures related to bookings, cancellations, payments, insurance, refunds, etc are attached to the online platforms in case of the most of the tour operators.

3.3 evaluate the suitability of different methods of distribution

The traditional method of selling or making the tour package available to the target customers is through the use of regional offices where the customers or the prospects can visit on recognition of a need to buy a tourism package. Here the customer is persuaded to buy the package and elaborated about the benefits and services by a sales person of the company and this is done with the help of brochures which help to add a level of tangibility to the services provided by the tour operator. However the modern tour distribution is done through the use of direct marketing where the customer can visit the website of the company and get the required information through emails or the company may use telephonic media to contact the prospect and provide the relevant information (Beaver, 2008). The use of internet in distribution of the company brochures and making sales of the packages is growing in the present scenario as this is relatively cheap method and the reach is also high. Also the tour operator company is attracted to make use of internet as most of the target buyers of tourism industry make use of internet. The company can mail down their brochures to the targets or prospects on demand from the company website and the company person may follow up the prospects through use of mobile phones or mails. If the target customers are young as in case of Chinese markets where most of the people make use of the internet for shopping almost anything, direct marketing is preferred (Lu et al, 2008). Also it can help them to make bookings or cancellations, making complaints, etc with utmost ease. In case of Chinese students, the use of internet for dissemination of information and making sales is very effective.

Lo 4 understand the strategic and tactical decision making

4.1 evaluate the strategic decisions made by tour operators

The strategic decisions are concerned with major changes in the company decision in order to deal with situation arising out of the volatility of the environment and needs special planning and researches before implementation of a strategy in an organization (Joseph, 2012).  In case of tour operators who face constant fluctuations in the demand from the tourist the pricing can be based on discounted pricing or seasonal pricing technique where the company tends to promote the business or tour packages in the year apart from the peak demand periods like Christmas or summer vacations. Thus the prices in the brochures which are printed once during the year may not be very accurate but the customer may end up paying more or less. In order to promote the sales of the holidays discounted pricing strategy may be used when the company pays the hotels and other components through fixed contracts and have risks associated with demand. Prices are kept high as there is substantial demand during the seasons of summer vacations, etc and this strategy help the company to make losses from the fixed contracts and low bookings during the off season when the company may be selling at discounted prices. Mass market operators use competitive pricing strategy to ensure sales and beat the heat from the competition. Thus the strategic decisions are generally taken at the larger or corporate level and enable the tour operator to avert risks and make use of the opportunities posed by the business environment.

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

The tactical decisions in case of tour operator organizations are related to the routine tasks of the firms (Chand, 2013) and help in the normal functioning of the business. They help in implementation of the strategic decisions made by the higher levels of the tour operating company and generally taken by the lower levels of the management. For example a tour operating firm may involve in various tactical decision making like those regarding to the design and supply of brochures to the branch offices, keeping databases of customers, implementation of discounting strategy during off seasons, keeping contacts with the various suppliers of services, maintaining the office decorum, making arrangements and checks for the services to the customers, etc. As in case of First Choice Tour operators at UK, the decision of entering in to contract with the suppliers including accommodation, travel companies, etc may be a tactical decision and generally taken by the middle levels of the management of the company. The tour operating firm enters in to making customer research through provision of the online forms on the company website in order to collect data about the taste and the preferences of the company and doing this through the use of a multiple choice questionnaire will be a tactical decision for the company management. Also the company may involve in making tactical decisions such as in case of mass tour operators like Thomas Cook, the focus is on reducing the overall costs and thus provide the customers with best in class prices and thus to attract them through use of pricing and entering in to fixed contract with suppliers and negotiate the best prices involves tactical decision making. While in case of specialist tour operator, the company wishes to specialize the services as per the needs identification through market research about the consumer preferences which is again a tactical decision and then the company may wish to enter in to sales only contracts as the demand for the specialist tours say a tour to rock climbing areas or other such adventure spots may be limited and thus the company decides so. In this case the strategic decision taken by the tour operator in case of Thomas Cook is to serve the mass markets and in case of the Cox and Kings is to serve the niche segments in the tourism industry while decision making about the type of contracting for use of services from the elements of the supply chain is a tactical decision. Thus the companies continuously involve in tactical decision making in order to allow implementation of the strategic decisions.

Conclusion

In Tour Operators Travel Tourism Assignment there is a current trend in the tourism industry to work with the travel and hospitality industry on a common platform and provide the best package of services to the consumer or the tourist. Also as in traditional days, the tourism used to be only for making family holidays or business class tours but there is a recent advancement in the needs and wants of the people around the world and there are segments in the tourism markets like honeymoon or young couples, nature lovers, sports or adventure lovers, educational clients, etc. There is a tough competition in the industry and thus there is a trend towards the specialization of the tour operators towards the needs of a particular segment. As a result many tour operators are only engaged and specialized in providing needs of a segment say a tour operator serving only to nature lovers and providing tours to destinations where the endangered species of flora and fauna are found and there is absolute peace in the vicinity, far from the modern civilizations. By undertaking the case of the Chinese students planning to visit to Paris on a five day tour from London and making a package for them in the summer vacation in August 2018 including the calculation of selling price, designing of brochure and contracting for the facilities, the understanding of various aspects of planning and creation of a holiday package has been developed. The brochures have long been used by the tour operators as here the product offering is highly intangible so the brochure is a form to provide tangibility to the services but the recent customers are smart enough to buy tours services online. Also customers are using internet for making dynamic packaging where they can buy all their needs from food, travel and accommodation through separate companies online thus the role of tour operator becomes all the more competent in attracting modern customers through price benefits.

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