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Unit 14 Tour Operations Management Assignment - Cox and Kings
Cox and Kings is a travel company which operates business in various countries. It is a leading holiday company which manages work in 23 countries. The Unit 14 Tour Operations Management Assignment Cox and Kings identifies major tour operator’s origin and their market segment. It evaluates the current market trends in tour operating industry. The report implicates various stages involved in developing the holiday package and different methods of contracting which are suitable for the tour operator. It will calculate the selling price of a holiday for individual person and depicts different types of tour operator in the industry. The study will throw a light on planning decisions taken by the operator to design the brochure and provide suitable alternatives to traditional brochure for different types of operators. It evaluates different methods of distribution used by operators to sell the holiday package. The current study explains the strategic decision taken by tour operators and compares the tactical decisions that are taken by tour operator in various situations.
1.1 Analyse the effects of current and recent trends and developments on the tour operators industry
Latest trends are influencing development of new services by tourism and travel industry. Expectation of tourism and their interest contribute to number of new trends. Latest trends on tour operator industry are given as follows:
- Holiday Package: Holiday package is becoming the most famous trend in UK. People are interested to buy holiday package in order to take break from work. It has been found that approximately 72% of travellers visit different countries to enjoy their holidays. Cox and King is expanding their business by developing holiday packages especially for families at reasonable price and discount. Their market strategy attracts people to purchase holiday package (Mariani.et.al.2014).
- Adventure trend: This is another new trend that highly attracts young travellers specially. Cox and Kings is developing adventure package that include popular adventure places for visit. It has been analyzed that people are very much interested in doing some adventures things like skydiving; wind surfing etc (Lemelin.et.al.2010). It has been analyzed that 20% of world tourist are looking for adventure activities. They want to take unique experiences.
- Discovering new and unique places: This trend includes opportunity to include lesser known destination that can be added into travelling packages. It has been noticed that travellers are interested in discovering new and unique places that would add unforgettable memories where people cannot go there by ordinary travelling methods. Cox and Kings are finding such places and add them in their packages with complete details.
- Internet and latest technical tools: This is another trend that has emerged in travel and tourism industry. Travel and tour organizations are using internet to reach at multiple customers in order to inform about their services and products.
- Dark tourism trend: Dark tourism is another current trend that attracts people to visit horror places or historical places (Goodall and Ashworth, 2013). It includes such places which are related to bad stories and sorrow in history. Some memories are kept at that place which influences people to visit there.
- Sports: Popular sports event across the world are an important trend which attracts the tourist from all over the world. Popular sporting events like world cup football, Olympics, grand slam events, cricket tournaments attract people from all over the world. People go places to support their teams and players (Goodall and Ashworth, 2013). The travel and tour organisation use this as an opportunity to develop packages which serves the twin purpose of tourism as well as watching the sports event. Cox and Kings also follow the strategy and organises packages to sporting events. Currently organisation is focusing on developing the package to Brazil and South America as Olympics will be taking place in 2016.
2.1 Assess the timescales involved in developing holiday
In order to develop good tour packages, time scales are required to involve. It develop plan to keep focus on target consumers. It is the most important part for travel and tourism industry to analyze current trends, places, research activities and understanding customer’s expectation. It would take time to develop a package for selected destination. Timescale includes following stages that are executed one after another:
- Examine Destination places: Cox and kings first examine different sites, nearby famous areas, cost factors, environment and restaurants. All the factors are pre checked and it would take one month of time. It also examine climate of destination places that is very important to be consider in tour packages.
- Research: Research stages investigate the additional facility at selected destination. It include complete research about concerned area like facility of transportation, hotels, lodging, availability of good food and some other facilities expected by travellers. The research would take around one month time in order to make their planning successful. It includes investigation of basic service providers so that travellers do not face service issues. It also research about availability of appropriate safety measures at destination (Paquin.et.al.2016).
- Tour Development: Finally tour development stage is undertaken by service provider after complete research and examine destination. The designing of tour development describe offered facilities and benefits of packages. Cox and Kings include cost estimation in order to improve profitability. Financial evaluation and pricing are executed to get competitive advantage in market. It would take around one month time (Kruja, 2012).
- Marketing tour packages and contracting: Promotional activities include online portal, banners, pamphlets and advertisements. Cox and Kings use both online and offline marketing methods so that more and more customers get aware about offers. Depending on target segment marketing is done thorough particular media. Apart from this, tour operator’s brochure is also designed that include details of company, details of destination covered and discounts. Apart from this, it contract for business with hotel owners and transport facility providers.
2.2. Evaluate the suitability of different methods of contracting for different components of the holiday
There are mainly two methods been adopted by tour and travel operators which are Fixed Contract method and Sale only contract method. It has been analyzed that Cox and Kings Organization also adopt these two methods. The explanation of methods is given below:
- Fixed Contract: In this method, the service providers charge for fixed volume based capacity. This would generate maximize revenue and it doesn’t matter about off season sale shortage. In this tour operator book total capacity regardless how much capacity would be actually use. Cox and Kings have entered into fixed contract method for summer and winter tour packages. It also covers risk about un-utilized capacity by receiving full amount from operator. In this type of contract, organization offer high discounts according to type of contract (Ashworth and Goodall, 2012). It initiates people to use these packages. Cox and Kings have selected this type of contracting method so that large number of people will come and take benefits of discount.
- Sale only contract: In this method tour operator has selected contract which will actually use. In this contract Cox and Kings need to pay only for actually consumed capacity by clients. The tour operator does not worry about un-utilized capacity. This type of acnb contract method highly concern about prospective customers and provide multiple facilities in high cost. But there is another risk factor that is weak response for particular tour package which may lead to loss in organization (Urry and Larsen, 2011).
Both the contracting methods have been evaluated and it finds that both the contracts have merits and demerits. Fixed contract offers high discounts, calculate pre-define profit by advance booking etc. Whereas Sale only contract mainly reduce wastage by non-payment of unutilized capacity. However it is expensive also.
2.3 Calculate the selling price of a holiday
From the case study it can be seen that some of the cost are given in pound and some in Euro. For calculating the cost of package, all the cost needs to be converted in a single currency. For the package the cost will be calculated in pound. Conversion rate is Euro = 0.79 Pound. The tour will last for five days and for 15 days. The rooms will be shared by two so for 15 people 8 rooms are required.
Transportation cost= £1000
Tour guide cost = £200
The above cost are fixed and does not depend on number of persons £ 1000 + £ 200 =£ 1200
Variable Cost depends upon the number of persons going for the tour
Supplement Cost per person =10 Euro for a person for a day =10*0.79 =£ 7.9
Total Supplement cost 15 persons for 5 days = 7.9*15* 5 = £ 592.5
One room in St Michelle Hotel cost = 60 Euro = £ 47.4
Cost of 8 rooms for 5 days is = 8 * 5 * 47.4 = £ 1896
Table2: Total sales cost
Profit margin (10%)
Actual selling price
3.1 Evaluate the planning decisions taken for the design of a selected brochure
Travel and tourism industry is using brochure as a medium to make people aware about offer services, products, prices and discounts. It acts as a medium to communicate with clients. It includes all the key information that attract consumers to use organization offers. The distribution of Brochure is made with objective to share information with maximum number of people in low cost. It is a paper document that can be folded into template, pamphlet and leaflet. Organization is concern about designing of brochure because it act as medium of information flow (Rodríguez.et.al.2010). Its designing phase identify necessary information that will include in brochure. It is developed by mainly follow planning, organizing and implementation activities.
There are some planning decisions which related to brochure design which are explained at below points:
- Finding issues affecting planning decisions: Some key issues are necessary to identify before planning phase for suitable development of brochure. The issue includes target customers, language, format, estimate cost, find region, resources and time limitation to generate brochure. All such issues are considering important that affect planning phase so it is necessary to evaluate them first. Cox and Kings Organization is also estimate time and cost before going to next stages
- Consider budget and Target Market: The target market should be selected like for Cox and Kings, niche market segment is included. This play a vital role for identifies habits of target consumers and strategies of competitors. People are attracted at some extra benefit services. Therefore, Organization needs to design and include information that gives extra benefits against competitors and include these in brochures (Tresidder, 2010).
- Format of the Brochure: The format of brochure is designed by keeping in mind target customers of organization. The format include clear vision and contain basic information like name of company, description destination with key features, duration of tour, price, discounts and extra offer facilities. It also includes booking conditions and policies or some health hazard related issues. Apart from transportation modes are also summarized that give comfort in travelling. All such thing must be include with clear and short description (Kurniawan and Rosa, 2013). Special content that can attract customers must be highlight and also include attractive image.
- Time limit and stages: Time limit should be added in designing phase so that it is completed in prescribed time frame. Entire stages like analyzing planning, budgeting and formatting should be complete in define time frame. A time limit should be allocated to each phase so that its manufacturing is completed on time and then it is ready to distribute in market. It has been analyzed that delays at designing of brochure miss opportunity at particular season. It would turn the direction of clients towards competitor.
3.2 Alternative of conventional brochure for different operators
Brochures plays vital role in the growth of Cox and Kings Ltd. Organization design the brochure in a way that it attract the customers and easily depict the necessary details. Through brochure customers can easily identify the mentioned information. Organization attracts large number of consumers worldwide by designing attractive holiday packages. Up gradation in technology binds organization to adopt new substitutes of traditional brochure. Substitute of traditional brochure are e-brochure, video brochure etc. New alternatives for the traditional brochure increase the customers and revenues (Huertas.et.al.2014). Following are the alternatives for the traditional brochures:
- E-brochure: This brochure is available at the lower cost and faster to contact in comparison to old brochures. This brochure can be reached to the customers in very short time. It covers wide area with large number of viewers with significant return. The aim of this brochure is to provide digital platform to the Cox and Kings to advertise the services. It provides digital set-up for information that travel agents need to advertise for the holiday package. E-brochure saves the cost of operators and allocates same content which is exactly printed on the paper brochures. It provides various facilities to the management like graphic design, edit facility, colour quality, cost efficient, covers less space etc. E-brochure improves connectivity of management to the customers in advanced technological way (Brito and Pratas, 2015).
- Video Brochure: Video brochure mainly depicts video portfolio that organization creates including its services and offers which are provided by the organization and upload that video on website or various social media sites like face book, twitter, Google+. This method increases the customer base and convenient for the customers to get relevant detail. Video includes audio and pictures of the services offered by the organization which is easy for the customer to get the relevant detail. The customer can save the video in the laptop, mobiles etc and carry it at different places and share it with the subordinates. Video brochure pleases the customers in comparison of traditional brochure (Tessitore.et.al.2014). Customer feels adorable while watching the video and try to get the services. Video brochure depicts the services in more significant manner and provides necessary details in very short manner.
- E-mail: This kind of brochure assists management to connect the customers by messaging them through mail and inform them about the offers and services provided by the operator. Generally, organization gets the details of the clients by the leads. This is the low cost consuming way for the brochure and organization can easily connects with large number of customers.
In addition to this, organization should adopt the E-brochure which assists the management to get in touch with large number of customers. Through this kind of brochure organization can provide relevant details to the customers like price of package, duration, destination etc. In e-brochure Cox and Kings attach the high definition photos which depicts clear picture of the destinations.
3.3 Different types of service distribution methods adopt by the tour operators
Distribution is a core part of tourism industry it assist management to deliver the services to the customers through various modes. It creates link between organization and suppliers through management can deliver the services to the users. It is a process which moves the product to the consumption stage (Xiang.et.al.2015). Following are the distribution method adopts by the tour operators:
- Direct sell: It is a method to sell the holiday package that involves sales through online media, direct contact with consumers etc. This method can be adopt by the Cox and Kings to deliver the services as it benefited organization to target large number of customers in less time with low cost. All the necessary details are mentioned in the online brochure like detail of destination, cost, climate, duration etc. Through direct marketing management need not to pay the commission to the mediators and brokers which results higher profit margin. Direct sell can be done through social media by uploading the details of the holiday package because it is an open source to advertise the services.
- Call centre: This is the facility for the consumers that organization hires a call centre and sales executives of the organization conveys the details to the customers. The individual person is liable to convince the customer through telephonic conversation (Senders.et.al.2013). Through telephonic talking the person avail the necessary detail to the customers and inform them about the bookings. Customer can easily get the details about the product and services.
- Internet: Internet is best platform to deliver the services to the customers with appropriate details. It assists Cox and Kings to connect with large group of buyers in different part of the world. Through internet client can identify the suitable holiday package. Organization can deliver the appropriate detail on the numerous of social media sites, application, websites etc. This kind of channel facilitates management to deliver services in descriptive with feedback of the consumers (Reino.et.al.2013). Internet cover whole world and allows Cox and Kings to cover wide area. Internet provides segmented customers to the organization and defines various ways to communicate with them.
- Telephone: Through telephone organization can directly get in touch with the customers and make the customer aware about the services and products served by the management. Telephone is easiest and cost effective way to deliver the services to the customers. Telephone is very convenient way to deliver the services to the customer (Evans.et.al.2012).
However it has been identified that Cox and Kings should adopt combination of all the channels of distribution in different situations by which organization can deliver quality services to its customers.
4.1 Strategic decisions taken by various tour operators
There are various strategic decisions which are taken by the Cox and Kings to expand the business. All the decisions are taken by the organization to provide better services to the customers. This kind of decisions includes brochure designing, price of packages, suitable distribution method, segmented customers etc.
Management needs to take appropriate decision because this kind of decision affects the profitability of the organization. The decisions make the organization different from competitors (Ward and Peppard, 2016). It allows the business to design the policy which increases the profits of the organization. Some important strategic decisions taken by the organization are as follows:
- Segmenting, positioning and targeting: In this decision organization identifies the targeted customers and develops the package according to their demand. The decisions are taken by management and evaluate the decision to serve better services to the customers. Organization analyzes the competitive environment and the services offered to the customers to meet their expectation. This is one of the key decisions taken by Cox and Kings Ltd which creates base for all the important decisions.
- Competitive pricing strategy: This strategy includes the analyses of competitors pricing strategy. Organization evaluates the price charged by the competitors for the package and compares the price then set the price. Effective pricing strategy attracts customers to buy the holiday packages. This kind of decisions facilitates organization get the customer loyalty in high competitor market.
- Promotional strategies: Promotional strategies assist management to choose the appropriate promotion method to advertise the product in the market which attracts more customers. The management decides the effective tool to promote the holiday packages. Overall profits of the organization depend on the promotion strategy (Rosselló and Riera 2012). Cox and Kings Ltd promote the services through social media sites, websites etc. Business is more focused to explore the services beyond the boundaries of the country.
- Customer relations: Organization tries to improve the relations with the customers by providing quality services to them. Organization provide discount to the clients to retain them with organization and design various strategies to improve the relation with the customers.
4.2 Tactical decisions taken by Cox and Kings in different situations
Tactical decisions are those which are taken to meet the day to day operations of business. This decision includes bargaining with hotels, restaurants, taxi etc. Organization takes various decisions to attract with the customers. Following are the tactical decisions taken by the organization:
- Seasonal pricing: The organisation follows the concept of seasonal pricing and decides the prices based on the tourist season. During the off season, the organisation gives seasonal discounts to its customers. Organization tries to provide cost effective packages to the customer in order to fulfil their demands and thus the management reduces the prices for specific period of time (Radford, 2012). The seasonal policy attracts more customers and increases the revenue of the organization.
- Exploring new ventures: The organization explores new places and defines tour packages to these new places. This helps in keeping the interest of the people as most of the people are interested in exploring new places.
- Utilization of resources: Organization tries to utilize the resource in an effective manner to generate more revenue. The main aim of the organization is to provide quality services to the customers by effective use of resources. Management designs the strategies in a way that optimum utilization of resources is being taken out and it benefits the business. Organization design the package according to the need and wants of the customer which is suits the budget of the customer (Evans, 2015). Business tries to avail additional services in the package which attracts more rush towards the organization.
- Price wars: The main decision is to decide price which assist management to sustain in the market. Organization design the policy to set the price according to the services provided to the customers. Organization has the liability to set the price with reasonable profits. To sustain in the competitive marketing management has to be satisfied with low profits. If Cox and Kings charge higher then it may be the cause to lose the customers. It will affect the brand value of the organization and it diminishes the profits of organization (Evans.et.al.2012). The organisation keeps the prices of its products less than the competitors to capture more market share. Effective pricing decisions should be taken by the management which increase the loyalty of the customers and generate more revenue for the organization. Before taking the pricing decision organization should keep the competitors price in mind.
The Unit 14 Tour Operations Management Assignment Cox and Kings identifies the major tour operators including their market segments environmental awareness among the tourist industry. It identifies the role of trade bodies that govern the travel and tourism industry. The report analyzes the stages involved in developing the holidays and provides suitable method of contracting. It depicts different kind of tour operators which operates business of organization in different parts of the world. Some operators provide facilities to the customers on behalf of management. The study further calculates the selling price of holiday and it evaluates the planning decisions taken by the organization to design the selected brochure. The report provides various alternatives on behalf of traditional brochure for various tour operators. Cox and Kings Ltd should adopts E-brochure, video Brochure etc to promote the services. Organization should adopt suitable method of distribution which is cost efficient. Business adopts numerous of strategic decisions to compete in the market and tactical decision assist management to handle the different situations.
Book and Journals
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Evans, N., 2015. Strategic management for tourism, hospitality and events. 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.
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Paquin, D., de Elía, R., Bleau, S., Charron, I., Logan, T. and Biner, S., 2016. A multiple timescales approach to assess urgency in adaptation to climate change with an application to the tourism industry. Environmental Science & Policy, 63, pp.143-150.
Radford, K.J., 2012. Strategic and tactical decisions. Springer Science & Business Media.
Reino, S., Alzua-Sorzabal, A. and Baggio, R., 2013. What matters to the industry? An evaluation framework for the adoptability of online tourism distribution platforms. In Information and Communication Technologies in Tourism 2013 (pp. 412-423). Springer Berlin Heidelberg.
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