Tours Operations Management Assignment
This tours operations management assignment is prepared for the travel and tourism agency based at London, UK. Itincludes the results of investigation of tour operator industry belonging to the travel and tourism sector with various types of operators, product and services provided by them, the scale in which tourism industry is operating and the trends and developments affecting the tourism sector in United Kingdom. After the investigation the information so obtained is examined in order to make strategic and tactical decisions considering various management issues. The methods of creating holidays, evaluating destinations and distribution methods for selling the holidays, contracting with various vendors and sellers, use of internet technology and travel agencies etc. are also discussed. Apart from this the evaluation of strategic and tactical decisions have been made which need to be taken by the tour operators in accordance with the needs of different consumers by analysing the customer portfolio (Sarquis, 2015).
This tours operations management assignment describes the plan of developing a holiday package for the holiday program of 15 Chinese students for 5 days during the summer vacations of August 2018 who wish to travel from London, UK to Paris, France for sightseeing. For the purpose of development of holiday package the Chinese students are assumed to be based at London and the holiday will include travelling from London to Paris and return to London.
P 2.1 Assess the stages and timescales involved in developing holidays
The stages which are involved in developing holiday package for Chinese students from London to Paris are as follows:
- Research- This stage includes identification of social, economic, political and climatic factors affecting the travel to Paris during the month of August in the year 2018 through research conducted in this regard about environment in France to assess the influence of these factors on the holiday. The identification and evaluation of important destinations in Paris for sightseeing worth for students, identifying the hotels for accommodation and meals that would be appreciated by Chinese students majorly including Chinese hotels and restaurants l0ocated in Paris is also included in this stage.
- Tour itinerary development – This stage includes determination of a summary tour program including the points of origin and destinations along with the duration of stay, the route to be covered in Paris, accommodation and transportation facility, locations for sightseeing etc. In this an itinerary tour package will be developed in accordance with the interests of students and suggestions and recommendations from them can be incorporated.
- Negotiation with suppliers/ vendors – This stage includes making arrangements and contracts with the suppliers of various services related to the tour located at Paris and the vendors for the supply of goods and other stuff required for the holiday package in London. The terms and conditions for the contracts and arrangements are discussed and agreed upon by both the parties to avoid ambiguity.
- Costing of holiday package – This stage includes the calculation and determination of cost of the holiday package including the cost of all facilities to be provided by the tour operator, fare of travel, accommodation charges, food cost and other charges and expenses to be made during the tour duration of 5 days. The pricing of the tour can be based on cost pricing strategy or market based pricing strategy.
- Brochure production – This stage includes designing the brochure of holiday package which will provide all the required and relevant information to students about the tour including the locations to be visited in Paris, cost of the tour with details, accommodation and transportation facilities to be provided, meals that will be served to them and the luggage and other things which they may carry. The designing will require pre determination and planning.
- Administrative staff – This stage includes assigning duties to the administration staff for the smooth and effective tour conduction and operation and safety of students. It includes deciding in advance the roles and responsibilities of different staff members for different tasks or operations to be undertaken during the tour.
- Feedback – This stage includes the post selling monitoring and review of the holiday package and receiving the comments, feedback and suggestions from the students about the holiday package prepared for them so that the changes can be incorporated for improvement and avoiding troubles that could be faced during the holiday (Batabyal, 2015).
On the basis of above discussion and analysis the conclusion can be drawn that various stages are involved in the development of an efficient holiday package. In developing the holiday package of 15 students for 5 days the above mentioned timescales and stages shall be considered by the travel agency and decisions shall be made in accordance with these stages and their involvement and contribution in the holiday package.
P 2.2 Evaluate the suitability of different methods of contracting for different components of the holiday
The different components of holiday explaining the different methods of contracting which could be used for them are as follows:
- Transportation – The contract with the local transport service provider of Paris shall be fixed contract made bysigning the agreement with the transport for travelling to various locations of Paris for sightseeing during 5 days and a fixed payment of lumpsum consideration shall be made to the transporter for all the costs related to driver, fuel and toll charges and parking.
- Accommodation– The suitable method of contract for the accommodation facilities to be provided to the students for 5 days and 4 nights in Paris shall be the variable contract with payment based on the stay during the day and night since the students will travel at different locations in Paris therefore the place of stay will not be the same during the journey of days. Separate contracts will have to be made with the hotels of different cities of Paris which are planned to be visited for sightseeing.
- Meals– The fixed contract method is not suitable for the contract with vendors for supply of food in accordance with the taste of Chinese students at various locations which will be visited during the tour in Paris since the food will be required at different locations therefore the contract for supply of food will have to be with different vendors in different cities which are proposed to be visited (Yenidogan, 2011).
- Tourist guide – The suitable method of contract with the tourist guide is the fixed contract method since under this method the guide will be able to travel with the students to various locations in different cities and explore the sights and sceneries there. A fixed payment can be made to the guide for all the days as a lump sum amount irrespective of the number of places visited by the students. However if the places to be visited are not pre-decided the fixed contract method will not be suitable since the guide will not be willing to take the students to more places as he will receive the same payment without consideration of number of places visited.
P 2.3 Calculate the selling price of a holiday from given information.
The calculation of selling price for 15 Chinese students for 5 days holiday package from London to Paris for sightseeing is as follows:
- Calculation of accommodation cost: The cost of a twin room with two adult sharing is 60- euros and extra bed is available for 10 euros per night per person. Therefore 5 rooms can be booked and 5 extra beds can be taken to accommodate 15 students resulting in a total cost of 60X5+10X5 = 350 euros per night. The cost for 4 nights will be 350X4 = 1400 euros that will be equal to 1092 British pounds (1400X0.78)
- Calculation of transportation cost: The transportation cost will be £1000 for 20-seater luxury coach including the cost of two drivers, fuel costs and road and ferry taxes.
Price (in £)
Charges of tour guide
Add: Profit margin @10%
*It is to be noted that the food cost is not included in the above calculation of sales price.
Thus the total sales price of the package shall be £2521.20
P 3.1 Evaluate the planning decisions taken for the design of a selected brochure
The planning decisions for the design of a brochure for adventure holiday package shall include deciding the information to be included in the brochure which will be able to motivate and convince the consumers such as college students and young boys and girls to undertake the tour programme in accordance with their requirements and needs for experiencing the adventure holiday trip. The information to be included in the brochure shall include name of the tour and travel agency which is based at London in UK, modes of transport for the tour, details of destination, duration of tour, prices, services and facilities to be provided, booking conditions, insurance cover, documentation required, type of accommodation and meals, extra charges health hazards, risks of the adventure, materials to be carried by the persons while going on the adventure trip etc. Apart from this the cost involved in designing the brochure for the tour, selection of vendor for design of brochure, the format and type of brochure that will be attractive for the young generation and students shall also be considered while deciding about the plan for designing of tour brochure (Public, 2014).
P 3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operator
The traditional brochure is an important tool to provide information about the tour operator and tour programs to the consumers in the target market. A tour brochure plays a vital role in effective marketing of the tour and increase the chances of selling the tour to a large number of prospective clients therefore it should be attractive in effective in all sense. Although the traditional brochure is very helpful in achieving the purpose but the brochure designed by the use of new and innovative methods and techniques is more attractive and gains the attention of large mass of people as compared to the traditional brochure. The suitability of traditional brochure for various types of tour operator is as follows:
- Inbound operator - For inbound tour operators who sell the holiday packages to foreign tourists cannot sell their packages using the traditional brochure since the foreign tourists are technically updated and they understand the new technically designed brochure in better sense.
- Outbound operators - The outbound tour operators which promote multi-national tours cannot operate with the old traditional brochure since the purposes and information to be provided will be difficult to communicate through traditional brochure.
- Domestic tour operators - For the domestic tour operators the traditional brochure can be suitable to the extent that they do not involve the new technological developments and internet processes in their operations and communications.
- Ground operators- For ground operators and handling agencies the traditional brochure do not serve the purpose since they contact with large companies and tour operators which are technically advanced and do not appreciate the traditional brochure and thus the purpose for the tour operator will not be served. (Camprubi, 2014)
P 3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for different types of tour operator
The different types of distribution methods used for selling the holiday packages for adventure holiday by different types of tour operators include traditional brochure, online marketing, telephonic sales, call centers, direct sales etc. The suitability of the methods of distribution for different types of tour operators is as follows:
- Inbound operators- For these tour operators the suitable method of distribution is online marketing and online promotion through brochures since the target client market of these tour operators is the foreign tourists who seek the services of tour operators having access across the world.
- Outbound operators - The suitable method of distribution for these types of tour operators is the online and modern sales methods including information and communication technologies and internet for the promotion of tour programs since these tour operators deal with multinational tours.
- Domestic tour operators - These tour operators can also adopt traditional brochures and direct sales method of distribution of holiday packages since they target the consumers of local market or domestic market. Apart from this other methods are also suitable for these type of tour operators since in today's age every individual has the internet presence and thus online marketing and promotion help in providing them the relevant information about the company and the tour programs. Thus they can methods like telephone calls and direct sales.
- Ground operators - These type of operators act as agents and thus the suitable methods of distribution for such type of operators is the new and modern methods such as online marketing and promotion, online selling of holiday packages and tour programs since they co-ordinate between large tour operators and foreign tour companies. Thus they can use the methods such as internet se4lling and use of call centers. (Huang, 2010)
P 4.1 evaluate the strategic decisions made by different types of tour operator
In tourism and travel industry the tour operators have to make many strategic decisions regarding their tour operations and tour programs. These strategic decisions include the decisions regarding price efficiency, market segmentation, consumer satisfaction and meeting the needs and requirements of the consumers of target market. The different types of strategic decisions made by various tour operators are as follows:
- Pricing strategy – The decision regarding determination of price of the package considering the cost involved in designing and developing the package is a strategic decision. The tour operator needs to consider the relevance of discounts to be given while deciding about the price of the holiday package and tour program.
- Positioning and image branding – The another important decision to be made by the tour operators is the creation of brand image of its tour products such as inbound and outbound tour operators may focus on positioning their products in the foreign markets whereas domestic tour operators on the contrary may focus in developing the brand image of their company and products.
- Choice of product – This type of strategic decision involves the determination and selection of the products in accordance with the needs and requirements of the customers. For gathering the needs and requirements of customer the study and analysis of customer portfolio is required which depend upon the type of services by different tour operators (Chand, 2011).
- Distribution decisions – The strategic decisions related to distribution involve selection of methods of distribution, identifying the processes of supply chain management, and entering into contracts with middlemen which varies with the type of target market for different type of tour operators.
- Investment funds – These decisions include the determination of strategies and policies for the investment of funds available with the tour operators and those financed from external sources for the purpose of developing and selling the packages and tour operations and expansion of tourism activities and operations.
- Mode of transportation – These type of strategic decisions involve deciding about the modes of transportation to be used for different types of tour programs by different types of tour operators such as the inbound and outbound tour operators who focus on foreign tourists and multinational tors may select aircrafts and cruise and not the rail transport and road transport whereas on the contrary the domestic tour operators may select the rail and road transport for their packages. However the ground operators may consider any of the modes relevant which require strategic decision making by them. (Lozano, 2016)
P 4.2 Compare the tactical decisions that could be taken by a selected tour operator in different situations
The tactical decisions are those decisions which are taken by the tour operators regularly regarding the day to day operations and functions for the smooth and efficient running of their business. The comparison of various tactical decisions taken by a selected tour operator which is domestic tour operator of UK Albatross London, inspired by Leisure Breaks is as follows:
- Competition–The tactical decisions to overcome the competition and elimination of competitors from the market involve the decisions about the improvement in the quality of products, discounted prices and low prices for the product, attractive offers for consumers and extra facilities and services to gain the competitive advantage in the domestic market of UK.
- Price wars – The tactical decision regarding facing the price wars includes evaluation of factors which may be helpful in reducing the prices for the tour products and holidays and applying them for the operations to cope up with the price wars arising in the tourism market and travel industry. This will include analysis of prices quoted by the other tour operators in local market.
- Fuel pricing – These decisions are related to meet the problems of rising oil and fuel prices in the global market w3hich results in increase in the fare of transportation thereby increasing the overall cost of the packages. The fuel prices may adversely affect the tourism business if proper tactical decisions are not made by7 the tour operators in t5his regard.
- Yield management – These type of decisions relate to t6he management of the profits if the tourism business along with their re-investment. Apart from this decisions are also required to be made regarding the identification of factors and processes which result in increasing the overall profits of the tour business by the efforts of tour managers. (Megill, 2015)
- Consolidation – These types of decisions require the identification of facilities such as accomo0dation, transportation, meals, amusement etc. to be included in a package in accordance with the need of the consumers to whom the package will be sold. The consolidation of proper and appropriate facilities is very important to develop a good and suitable holiday package for the consumer therefore the tour operator.
- Maximizing occupancy of contracted beds – These decisions involve the evaluation of the hotel rooms and capacity of beds in the domestic markets with who contract for the accommodation is made by the domestic tour operator so that the occupancy on those beds can be utilized in an optimum manner.
- Optimum utilization of seats – These types of tactical decisions requires the decisions to utilize the seats available in the modes of transportation to the maximum. Since the availability of seats for travelling within the nation in the local modes of transport whether it be rail transport, road transport or aircraft is always scarce and limited therefore proper decision are required to be taken by the domestic operator for utilizing the limited seats in the best possible manner.
- Tactical marketing – The decisions regarding the marketing of products and programs taken regularly involve the monitoring and review of the effect of promotional activities and advertising campaign undertaken by the travel agency and making changes in the existing marketing policies from time to time in order to increase the sales of the tour products and holiday packages. (Dodds, 2010)
From the detailed discussion and analysis contained in the report prepared for the management of travel agency based at London regarding the trends and developments that took place in the travel and tourism industry in UK and its effect on the travel agencies and tour operators it can be concluded that tourism and travel industry is a growing sector. The calculations made for the selling price of holiday package for students who wish to travel from London to Paris shows that the travel from one continent to another of the world is easily affordable. The evaluation of stages involved and planning required for developing an adventure holiday package and designing of brochure respectively which has been made depicts the scope of tour operators and their role in tourism sector that are required to take many strategic and tactical decisions for their tourism business. (UK, 2015)
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