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Unit 14 Tour Operations Management Assignment Solution
Diploma in Travel and Tourism
Unit Number and Title
Unit 14 Tour Operations Management in Travel and Tourism
The tour operator industry is one such industry which is growing at a very fast rate and the tour operators are making fortunes. A lot of tour operators have jumped in this business and the entire tour operator industry is contributing a lot towards the economic growth. The tour operator industry has picked up so much popularity because of the better facilities which is provided by the tour operators and the affordable packages. The packages which are designed by the tour operators also have all the components which are required during a holiday or a tour and the customer do not have to worry about anything. Everything is being taken care of by the tour operators. There are a lot of effects of the current and recent trends and developments on the tour operations management. By the recent trends and developments, it means the advancement in the technology, various kinds of services, better connectivity to various tourist destinations, and one stop holiday package including all the related services, wide range of prices with different services included in the package. Now for the tour operators, it takes a lot of efforts to make a particular holiday package. There a set of stages which is involved in creating a holiday package and we will be discussing in this paper. For creating these holiday packages the tour operator has to provide different services for which they have to make deals with different service providers like accommodation, air travel, ground operators. Now there are different checks which are used to identify the appropriate methods of contracting for different components of the holiday and different type of tour operators. Also the tour operator has to make a lot of decisions in this process while making these holiday packages. One of the important decisions here which the tourist operator has to make is to decide the selling price of the holiday package. There are a lot of methods which are used to decide the selling price of the holiday package; this will also be discussed in the paper. Then after the holiday package has been designed and created. The next step is to create the brochures. There are a lot of planning decisions which are taken while developing these brochures as these brochures gives the first impression of these holiday packages and is a key driver to the decision making of the tourist whether to buy the holiday package or not. These days there are a lot of alternatives also present in place of the traditional brochures which are used these days. These include the online brochures and video brochures. After these brochures has been made it is also required to distribute these brochures so that it is easy available to all the potential customers. This is also done via a number of distribution channels. While creating these holiday packages the tour operators have to make a lot of strategic and tactical decisions. We will also be comparing some of these strategic and tactical decisions and decide which is the most appropriate one among them.
1. Define the term Tour Operator
If we are discussing about the tour operators so first of all we will defines who the tour operators are. The tour operators can be defined as those who bind the tour and travel components to develop a holiday and sell them to the customers.
2. Explain the role of the Tour Operator
The basic role of the tour operator has to develop such holiday packages in such a way that it is selected by the travellers and it provides a wonderful experience to the customers of visiting various holiday destinations. While doing this the Travel and tourism operator has to perform various roles such as developing an itinerary for the holiday packages, negotiate with the service providers and the suppliers, develop the brochures, distribute the brochures, market the holiday packages created, take feedback from the customers and improve on the touch points. These holiday packages consist of different components like accommodation, airlines, ground operator services, local transport services, etc. All these components are combined together by the tour operators and then they are sold to the operators at a fixed price.
3. Define vertical and horizontal integration in the context of the Tourism industry
There are also vertical and horizontal integration in the tourism industry. It is as the name suggests, horizontal integration will be when the tour operators join hands with the rivals or the tour operators who is providing the similar services to the customers. Horizontal integration can be better understood as when and organization owns two or more companies on the same level of the buying chain. Examples can be quoted for the horizontal integration as the organization First Choice Group owns First Choice Travel agency and First Choice Hypermarket as well. On the other hand the vertical integration means when an organization owns companies on two or more levels of the buying chain. Here an example would be where an organization owns a travel company as well as a tour operator company. For example “The Big 4” is an organization which owns an airline, tour operator and a travel agent.
4. What are the advantages and disadvantages of vertical integration in the context of Tourism Industry?
The vertical integration also has a lot of advantages and disadvantages in the Tourism industry. The advantages of the vertical integration is the profit for both the companies will lie in the organization and the organization will be able to provide the end to end service to the customers (Dilley, 1986). The organization does not have to go to the third party to using their services and the services can be produces with the same organization. The disadvantage could be when a company tries to do vertical integration and if one of the services is not performing up to the level then the whole service set fails and the combined services also fall because of the inefficiency of one of the components.
5. What are the advantages and disadvantages of horizontal integration in the context of the Tourism industry?
There are lots of advantages of the horizontal integration and the most important among them is it increases the market share of the organization. The horizontal integration will also help to fight competition in a better way. The disadvantage of the horizontal integration would be if one of company is not performing well then the entire performance of the organization will also suffer (Poon, 1993). The horizontal integration actually helps to capture a major segment of the market. The profits of the company will increase. It will also help to root out the competition in the market.
6. Explain the stages involved in developing a holiday
There are a lot of stages which is involved in the development of a holiday package. These stages range from the investigation and the market research phase to the post implementation and feedback stage. The common stages which are involved in the development of the holiday are as follows:
- Initial Research
- Tour Itinerary Creation
- Suppliers and the Vendors Negotiations
- Determining cost of the holiday package:
- Fixing the Price of the package
- Administrative staff
- Post tor evaluation
Let us discuss these stages in detail:
- Initial research: For creation of any holiday it is very important to understand the market structure of the tourist destination, the competitors who are providing the similar products, the customer preferences of the targeted customers. There has to a lot of research regarding these factors to understand what product would be successful and what price should be suitable for the targeted customers (Carey, 19997). There has to be a lot of research including the research on the social, political, economic, cultural, climatic, legal environment, competitive conditions of the tourist destinations. They need to make sure that whatever they create will be bought by the customers and at the offered price. This is prophase of the itinerary creation.
- Tour Itinerary Creation: After the research is completed and the analysis has been done as to what can be included in the holiday package being planned, then the next stage would be to create a proper itinerary as to what will be included in the holiday package, the time table of visiting the holidays destination, the chronological order of visiting different destinations, the time that will be spent at a particular place (Levy, 2010). All these things will be include in the itinerary.
- Suppliers and the Vendors Negotiations: After the completion of the second stage which is the itinerary creation and identifying the suppliers and vendors to deal with for services to be provided to the customers in the tour, they need to negotiate with them. All the negotiations are done keeping the things clear that what is expected from the suppliers and what will be penalty imposed to the vendors of the services are not completed in time (Higgins, 1996). This negotiation will include the services to be expected from the vendors, the details of those services, price to be offered for those services, quality of services expected, etc.
- Determining cost of the holiday package:The next big thing in the stages involved here for the development of the holiday package would be to decide the price of the holiday package. This is a very crucial decision to make. This stage is really very important for the tour operators to make several decisions for their holiday packages. They can choose from different options available to them. They have to know about the cost for each and every component in the holiday package and then take the decision to whether to include a particular item or not (Dann, 1988). The cost include various components like the cost of accommodation, airlines travel cost, ground operators’ cost, local arrangements cost, salaries of the employees of the tour operator company, research cost, marketing cost, promotion cost, etc.
- Fixing the Price of the package:After the cost of the holiday package is known, the next step would be to decide the price of the package. The price of the package is determined by various methods and there are a lot of factors which is considered before fixing the price of a package. The most common way of deciding the price of a package would be to add the profit margin to the total cost. But this is actually not the only thing which is considered before fixing the price of the holiday package(Sheldon, 1986). The other things which are taken into consideration before fixing the price are the competitor prices, the government policies and regulations, the amount the customers are willing to pay, etc.
- Administrative staff:After all the above mentioned stages are completed, the next stage would be to appoint the administration staff which will be required in the holiday season. There are a lot of roles which needs to be performed in the tour operator industry for which they need a lot of administration staff whose roles are decided after appointing them and they perform a set of roles for the tour operator industry.
- When we are completed with all the creation of the holiday package, then the tourist operator need to create the brochures and send these brochures to the target customers to market their holiday packages. There are a lot of ways these brochures are distributed to the customers. There are also a lot of alternative brochures are used these days apart from the traditional brochures.
- Post Tour Evaluation: The last stage of the holiday creation process would be to collect the feedback of the customers who have experienced the holidays and make the necessary changes as suggested by the customers. This will help to improve the services provided to the customers.
7. What is the difference between charter and scheduled airlines?
The charter airline is different form the scheduled airlines. The charter airlines deal with the operation of the charter flights. The charter flights are those flights which do not have a specific schedule and is operated at a convenient time.The schedule of the charter flight can be decided according to the customer. On the other hand the scheduled airlines operate with the flights which have predefined schedules for their flights (Ingram, 1989). Charter flights are basically booked by individuals or some groups who visit some beach or resort or some town or city. They are basically booked by a group of people from the same company, friends group or family. The charter flights have been used basically for mass tourism. Also the tickets for the charter flights are normally not directly sold to the customers but it is sold by the holiday companies. This is not the case with the scheduled airlines. The tickets for the scheduled flights are directly sold to the customers. The charter flights are basically a part of a package which is booked by the tourists to a tourist destination. Scheduled flights on the other hand fly for a particular route, to predefined destinations and at predefined timings.
At the end this paper can be concluded by stating the tour operator industry is growing at a very faster rate because of better facilities and advanced technologies. This sector is a rapidly growing sector and the number of players is increasing every day.
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