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Unit 14 Tour Operation Management Assignment Airtour
Diploma in Travel and Tourism
Unit Number and Title
Unit 14 Tour Operation Management
This paper is intended to discuss about different tour operators, and their services to the public so the growth of the tourism sector can be understand. Hospitality means providing services to the interested visitors with consistent quality as well as excellence by maintaining the profitability at every level of the tourism. The main tasks of any tour operator are to arrange tour for several interested people by providing them diverse range of facilities along with the main services. In order to get diverse range of service package, customers do not have to go to different service providers because in the recent times one tour provider can offer diverse range of services. Different common auxiliary services that are provided by different tour operators are transportation facilities, food and beverages facilities and retail facilities. All of those tour packages are well acceptedby the customers because it saves their time as well as money. Through this tour packages customers can get all of the facilities at one single place.This tour operation management assignment section describes the tour operation management of Air tours.
Task 1: LO1
1.1 Effects of the recent and current trend as well as the development on tour operator industry:
Tourism industry becomes one of the fastest growing sectors that become oneof the effective economicdriversin order to develop differentcountries in the UK. Itis seen from a current statistics that the current growth in the UK tourism sector is 4% that achieve better growth than other sectors. There are several current and recent developments and trends in the tourism sector are:
- Increasing level of monthly disposal income of the people:In the recent times, people have started to earn more and spend more, which increases the scope andopportunity of different sectors based on tourism. Tour operators of London generally implement different strategy that can attract the attention of the visitors to spend their holidays by visiting different beautiful places in London. In this system, both the tour operators and local publics are benefitted as they get more benefit from the visitors.
- Adoption of ecommerce:By adopting ecommerce strategy different tour operators of London has scattered their business over different geographical area. By using this technology, they can now attract visitors more easily by providing different details about packages, booking tickets or about different suitable packages through online. For the adoption of ecommerce technology, a sudden boost in the number of domestic and foreign tourists in the UK has been noticed.
- Effect of globalization:In the recent times, due to globalization number of visitors is increases. Due to this globalization more tourists comes to the UK for their business purposes or for visiting purposes. It is seen from the current statistics that the number of tourists increases to 797 million form 674 million within 5 years and in next five years, it increases to 940 million (Ap and Wong, 2011).
- Change in demographic pattern:Due to the change in the demographic pattern, tour and travelling sectors can offer more value to the customers. Different tour operators design the tour packages in that way so it can attract customers from different demographic area.
- Effective research on markets and target customers:Conduction of the market research helps different tour operators to identify the need and expectation of the target customers by attracting them with attractive package according to their abilities. For example, they set tour packages for both the high-income people and low-income people according to their needs.
- More focus on the satisfaction of customers:As stated by BalogluandMangaloglu (2011), providing more focus on the satisfaction of the customers by understanding and meeting their needs and providing facilities and charge price according to them helps them to attract more customers. Focus on the customer satisfaction strategy helps tour operators of London to design tour packages according to need of customers can provide extreme success to them.
- Offering more customized holiday package:Recently tour operators offer more customized holiday packages to the customers and help them to select their desired tour packages according to the preference of place and budget.
- Effective marketing:Tourism marketing plays more vital role in the recent time by creating awareness regarding tourism in the London and makes them more knowledgeable regarding the service of those tour operators.
- Role of government and other organization in tourism:Government provides high level of support to the tourism industry because it enhances the business in that country. There are several trade bodies like federation of tour operators, travel association, UK inbound, UK civil aviation authority have greatest impact on the tourism in London.
Task 2: LO2:
2.1 Stages and timescales in the development of holidays:
For designing a good tour package, it is important to provide an effective focus on the target customers. In order to design an attractive tour package, it is important that Airtours must evaluate their tour package by involvingplace analysis, research related activities, understanding the need of the customers and negotiation with the service providers (Bastakiset al.2014). In order to develop tour from London to France, it would take 1-yeartime. Key activities regarding planning are as follows:
- Careful examination of the destinations:In this case, Paris, France is selected as the destination place that must be analyzed in terms of cost related factors, environments, famous areas, restaurants and different sites. Analysis of this factor may take almost 3 and half months of time by Airtours.
- Research:Here research involves the identification of different facilities that are available to the visitors in that place. Research is one of the planning activities because without this, it is difficult to offer anything to the customers and these research activitiesrequire around 2 months of time by Airtours.
- Negotiation:A tour package require the involvement of different services so it is important to negotiate with different service providers like service providers of transportation, accommodation, guide, food etc. This negotiation may take around 3 months of time.
- Development of the tour:After accomplishing, all of those activities it is important to develop the tour that involve designing of different facilities that the tour operators want to offer their customers. After designing all of the facilities, Airtoursmust communicate the plan with the customers through different promotional activities like advertisements.
- Evaluation of finance and pricing strategy:Before offering the tour package to the customers, it is important to evaluate the overall costing of the tour and currency prices of the tour so that profitability can be previously estimated. There are two types of pricing strategy that need to be followed they are market oriented tour pricing and cost oriented tour pricing (Buhalis, 2010).
- Administrative staff:It is important to hire right administrative staff so all of the office work can be successfully conducted.
- Marketing of the tour package:After developing the tour package, it is important to market the tour package by evaluating the right segment of target customers.
- Brochure of the tour operators:Brochures are considered as the major marketing tool so Airtoursmust develop an effective brochure by mentioning site visited, company name and destination covered by them.
- Post tour management:After the completion of the tour of customers, the tour management agency must take feedback regarding the service offered to them so it can help the agency to make their services better.
2.2 Suitability of the different methods of the contracting for different components of the holidays and different types of the tour operators:
There are mainly two methods, which are widely adapted by the tour operators while designing the design packages for tour, which are fixed contract and sales only contract. Those two methods of contracting will be discussed under the tour operators Flight Centre and Airtour.
- Sale only contract:According to BuhalisandLaw (2012), sales only contract is that kind of contract that follow comparatively high level of costs and made in the lean season. This kind of contract is very much essential to target potential customers and this kind of contracts isfollowed by the Flight Centre to design their tour packages. This kind of contract provides special attention and person-centered services to the customers by following high costs. However, there is one risk, which isthis contract may have weak responses from any particular segment of customers who are seeking discounted services.
- Fixed contract:In case of this contract, service providers charge the volume-based capacities form the customers so they can maximizes their revenue during the off-season. In this contactingmethod,tour operators book the total capacity regardless of the actually consumed capacity by the customers. This contracting method is followed by Air tour. There is always a risk due to the unutilized capacity because they have to pay the full money as per the contract. Here the volume of people that can avail the service is high because the discounts offered by them are high (Cavlek, 2012).
2.3 Selling price of any holiday:
In this present case, the agency of the learner provides a holiday package to the 45 Chinesestudents to a tour from London to Paris. In this tour, 54 euros are required for the twin room that 2adults can share. Price for the 50-seater luxury coach that includes two drivers, all road, fuel and ferry taxes is £5400. Supplement for the BB is around 12 euros per night or per person. Charge for the local tour guide is £900 during the time in Paris.
Sale price per person
Total sales price for 45 students
Booking price for hotel
Price for transportation
Supplement for BB
Price to hire local tour guide
Therefore, the total price required for the tour of 45 Chinese prices for their 5-day package is £21150. In this total tour, the agency of the learner wants to secure 20% profit so the overall costs of this total package will be £25380 and the amount charged by the agency is £4230.
Task 3: LO3
3.1 Evaluation of the planning decision that are taken for the design of selected brochure:
Brochures utilize in the tours, travel organization as the medium to provide tour related information to the customers, and make them aware regarding the services. This section describes the planning decision regarding brochure for the Airtours. In order to design good and suitable brochures, it is important for the organization to develop planning, organizing and implementing the activities with care. Planning decision regarding brochuresis as follows:
- Identification of the issues that affect planning decision:As opined by Dahles (2012), it is important to identify issues regarding format, target segments and objective of the information before developing any suitable brochures because those issues affect the designing of brochures.
- Format of the brochures:Format of any effective brochuresmust be developed by considering the target customers along with the information that need to be shared with customers. Brochures must contain different information regarding name of the organization, description regarding destination, price, transportation mode, extra charge required by company, booking related condition etc.
- Consideration of the budget and target market:Airtours develop their brochures by considering the budget as well as target market.
- Stages and time limit:Designing of any brochures must be completed within the prescribed time and all of the stage for developing the brochures like planning, organizing and developing must be completed within allocated time.
3.2 Suitability of the alternatives for a traditional brochure:
As stated by Herroelenet al.(2015), technological advancements make it important to adapt new alternatives to thetraditionalbrochures systems. System of making the e-brochures makes the communication with the customer more easy and fast. By designing and maintaining a more effective design, tour operators make their customers more attracted to their services. Therefore, a huge amount of revenue can be generated by attracting more customers. Online brochures are available to the customers in 24*7 bases that make the customers more attracted towards the organization. In this case, e-brochures are utilized by the Airtours to cover a large network of target customers with the involvement of low pricing strategy. E-brochures are generally comes in lower price because it does not require any kind of printing cost that hard copy e-brochures required. Along with that, e-brochures require faster access of the information than any kind of traditional hard copy brochure system. Moreover, e-brochures are more eyes catching and hold more clarity features because the messages that are conveyed through the e-brochureshave high level of impact and clearer understanding. Airtours has adopted this visual clarity to design their e-brochures.
E-brochuresaremore effective than the traditional brochures because it conveys clear messages by depicting the images of the destination place (Mihalic, 2012). Along with that, e-brochuresclearly mention all of the key features regarding the destination place. Moreover, e-brochures can be easily promoted through the social media that is more effective and less costly than the traditional media. Video brochures can be easily integrated with the internet-marketing tool that is very effective to attract customers. Video brochures are effective because it includes the video clipping of the concerned place that is very effective to grab the attention of the customers. Moreover, this type of clipping is sharable in the YouTube that is one of the fastest promoting tool in the world, which can attract the attention of the millions of target customers. Therefore, Airtours should develop the combination of all this video brochures and e-brochures and offer their customers so they can attracted to services provided by them.
3.3 Suitability of different methods of distribution used to sell a holiday:
Several methods are available in the holiday packages of Airtours. These methods are online selling, selling through telephone, sales and promotion through the callcenters, direct selling strategy etc. Direct selling strategy of the Airtoursinvolved offering holiday packages direct to the customers through online media (Swarbrooke, 2012). This selling strategy is effective for the Airtours because it helps the organization to target high volume of customers in low costs. Making aware, all of the target customers through this method of distribution are so much easy because only brochures are required to aware customers in this selling strategy. Along with that, mail - marketing strategy is also applied by the organization to make their target customer segment aware regarding their services. Sometimes, tour operators hire a third party agency to make to promote their holiday packages to the customers. Through this third party agency, Airtours can call their target customer segments and convey different information regarding their holiday package. With selling strategy, Airtours can convince their target customer in a greatest extent because customer care executives have great experience to convince people (Ryan, 2011). Therefore, by considering all of the selling strategy it can be saidthatAirtours utilizes a combination of all this selling strategy to reach their target customers.
Task 4: LO4
4.1 Strategic decision made by different types of the tour operator:
There are several strategic decisions that are madeby the tour operators to continue their business. Tour operators takes some business related decisions every day that involve different decisions related to development and design of a brochures, fixationofdifferent price for the tour packages, identification of the customer segments and selection of the distribution method. Tour and travel business generally involves high level of the flexibility in case of some elements for maintaining businesses smoothly. There are several key decisions that are undertaken by the Airtours are as follows:
- Pricing strategy:Company must provide a discount by fixing the cost regarding the tour and they must calculate this with effectiveness. The main reason behind this is high discounts attract more customers so company should offer high discounts in various seasons to increase their sales.
- STP of the organization:Airtours must set their target set of customers so they can develop an attractive set of tour packages to attract that set of customers by positioning them. Decision regarding the target customers is generally made after analyzing the present condition in competitive marketplace so a set of attractive services can be arranged to meet the expectation of those customers.
- Competitive pricing strategy:As stated by Towill (2013), competitive pricing strategy generallyinvolves the analysis of the price that are offered by the rival organization for the same trip so an effective and low pricing strategy can be set to attract customers.
- Different seasonal aspects:Before the development of the tour packages, it is important ton consider the seasonal aspects. In case of tour and travel business, peak season and off-seasonpossess a huge impact on the business because level of profitability depends upon the season. For example, customers like to make a tour on the peak season so tour operators can get a huge profit on that season. On the other hand, they can get very less profit on the off-season.
- Promotional strategies:Promotional activities of any tour operator business generally include promotions by utilizing several tools within a selected budget.Overallprofitabilityof any business mainly dependent on the promotional techniques that are used by the tour operators because through these strategies, organization makes customers aware regarding their services.
4.2 Comparison between the tacticaldecisions that are taken by tour operator in different situations:
Tour operators take several tacticaldecisionsevery day in order to negotiatewith the service providersregarding food and other facilities, arrangement for the accommodation and tie up with the stakeholders as the part of overall value chain. As stated by Wunder(2010), in order to make effective tacticaldecisions, tour operators must make a list of the service providers who proposes services to the customers. After that, it is important to send them proposal for inviting quotation from them. After receiving quotation form different service providers for every activity regarding accommodation, food, and transportation, it is important to receive the most effective quotation depending upon the pricing range. Selection of the proper quotation must be done by considering the objective regarding good services and cost minimization.
In order to get the best services from the service providers, it is important for the Airtours to arrange personal meeting with them (Mihalic, 2012). They must be selectedaccording to the equality of the services, suitable pricing strategy and different facilities offered by them. This overall process requires different tactical decision making regarding pricing, different types of discussion with the service providers and negotiation of the price.
From the above discussion, itcan be concluded that in order to achieve more economic growth from the tourism industry more support is required by the government. They should provide different free counseling, cuts in tax rates to help them. Along with that, tour operators must make different strategic and tactical decisions in that way so they can achieve optimum success from their businesses.
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