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Unit 14 Tour Operations Management Assignment Solution -TUI Group
Diploma in Travel and Tourism
Unit Number and Title
Unit 14 Tour Operations Management
Tour operations industry consists of many sectors about which the discussion will be carried on in the Tour Operations Management Assignment Solution -TUI Group report assignment. There are many recent trends and developments in the industry which affects the performance and development of the tour operations industry. Also, in order to develop decision making skills, various strategic and tactical decisions will be made. Different scenarios are given which will be used for determining the prices for holiday packages in UK by tour operators. The promotion methods will be discussed by the use of brochures and various distribution methods will also be reviewed. The main aim of this assignment is to gain understanding on the tour operators industry and about various other aspects like stages in creating holiday packages, decision making or advertisement or promotion methods.
Task 1 Understand the tour operators industry within the travel and tourism sector:
1.1 Analyse the effects of current and recent trends and developments on the tour operators industry.
A sightseeing tour is to be designed in this report for a group of 45Chinese students for the summer holidays 2018. The tour will be from London, UK to Paris, France and will be not for more than 5 days.
2.1 Your manager has requested a detailed proposal so you have to assess the timescales involved in developing this holiday
A detailed proposal will be prepared for planning the holiday package for Chinese students from UK to Paris and for 5 days. It includes various steps like Planning for creating and developing a framework for the design of holiday package. It helps in taking further decisions by considering different available options (Zhu, et. al., 2012).For developing the holiday, below given are certain essentials which are to be discussed for bringing effectiveness and for creating excellent travel experience for the travellers:
Detailed investigation or research of the destination/ Planning for developing holiday tour
In this case, the detailed research and investigation will be carried out for Paris in relation to its environment, prices of stay, facilities available, cost, destinations for visiting, etc. These can be checked through online websites which includes reviews of real visitors.
It can also be completed with the help of PESTEL tool which analyses Political, economic, Social, technological, Environmental and legal factors (Zhu, et. al., 2012).
It will take around 5 months to clearly investigate all the facilities in the visiting country i.e. Paris.
It is the discussion between two parties to reach to an outcome with mutual consent. Here, the negotiation will be done with different vendors, restaurant owners, hotel management and travel companies for settling and providing the services at reasonable rates (Biederman, 2008).
This process will take 3 months for contacting every service provider and time is consumed in discussions on the rates which are profitable for both the parties. The tour package should involve minimum cost so that maximum profits can be gained.
Development of tour
It takes place when the service providers are fixed and selected. Also, different services which are to be covered in the tour packages will be decided finally. Development of tour starts when the features and attractions of the tour package are communicated to the tourists/ students. For attracting maximum students for the tour, this tour package should be promoted on online websites, portals, pamphlets, etc.
It takes up to 6 months because all the services are to be finally selected and this plan is to be communicated well to the potential tourists (Biederman, 2008).
Financial decisions regarding pricing
While the determination of financial aspects, the company will have to determine the difference in the currency exchange rates of UK and France. All the related costs will be covered and considered like transportation costs, accommodation costs, costs of tickets, etc. and cost oriented tour pricing has been adopted so that costs can be covered and the tourists can get maximum satisfaction (Mair, 2011).
It will take up to 1 month
Marketing of tour packages
Once the pricing decisions are taken, now marketing for the tour package is required to be done. Marketing for this tour package will be done though online channels because students are more active on online platforms.
It will take 1 month to advertise and market the tour package among Chinese students (Mair, 2011).
After tour management
The work doesn’t end where the tour gets finish, it is important to gather the responses of the tourists for their experiences in the tour. For this survey can be carried out and it will be analysed to know the actual responses (Mair, 2011).
It will take 1 month to distribute survey questionnaire and to gather feedbacks.
2.2 evaluate the suitability of different methods of contracting for different components of the holiday
There are mainly two methods of contract which are adopted for different components of holiday package from UK to France. These methods are Fixed Contract Method and Sale only Contract. Different components of holiday packages are transport service providers, hotels, attractions, etc. which adopts these methods of contracts (Medlik, 2012).
Sale only Contract
Fixed contract is a type of contract which is for a particular fixed term and will end after the period ends. In tour operations, this type of contract is meant for maximising the sales and the services which will be unutilised will be not be repaid back by the service provider because tour operators purchase services in bulk to bring cost effectiveness. For e.g. the tickets are booked for 50 people but only 48 seats are utilised, but the whole balance of cost is to be paid to the service provider (Medlik, 2012).
On the other hand, Sale only contract is the contract in which the services are sold at higher prices than the fixed contacts. These contacts are made on the basis of demands and requirements of the customers. There is no risk of un- utilisation because the payment is done for the services which are utilised by the travellers. For e.g. 45 beds are booked for 45 students and payment is done for the same (Medlik, 2012).
It is clear from both the terms that every type or method of contract have its own merit and demerit like Fixed contract provides high discounts which lowers the costs of the package but in the case of sale only contract, no payment has to be made for the serviceswhich are not used. It only focuses on the customers which uses the services (Medlik, 2012).
2.3 calculate the selling price of the tour from the information given above
In the given case, in a trip of 45 Chinese students from London to Paris, is been organised and a hotel, St Michelle Hotel is providing accommodation at a rate of 54 euros for a twin room in which 2 adults can share a room and a supplement for BB is 12 euros per person/ per night. The special rate with the transportation company is decided at £5,400 for a 50-seater luxury coach including all extra charges. The local guide is been hired at £900. The profit margin is 20%. The calculation and determination of selling price is given below:
Type of cost
Cost for accommodation
4 nights *(€54*20 students+€12*5 students)
4560* .85 €= £3876
Cost for transportation
Add: profit margin @20%
1 pound = 1.1 Euros
The selling price for the holiday is £12211.2.
(Dolgui &Proth, 2010).
This task is related to the evaluation of the brochures which are been used by different tour and travel companies for promoting their services. The task will include the evaluation of the planning decisions for the design of brochure of TUI group and various alternatives will be compared for tour operator so that the most appropriate one can be adopted.
3.1 Evaluate the planning decisions taken for the design of a selected brochure
Planning phase is very important for the further implementation of the brochure for meeting the objectives of informing maximum no. of people and in lower cost which increases the profits of the company. Some important planning decisions taken for the design of a selected brochure are discussed below:
- Recognize issues of planning decisions: First of all, the issues are to be identified which affect the planning decisions of the company for the brochure. These issues can be related to the Format and design of brochure, information conveyed through brochure, time for developing the brochure and more (Huang, et. al., 2015).
- Brochure format: The format of the brochure is designed by keeping in mind the customers which are targeted by the company. It should be developed containing information about the tour package like company’s name, tour package and its constituents, prices charged, etc. which are important to be known by the tourists (Huang, et. al., 2015).
- Target market of brochure: For developing brochure, its target market is to be decided which makes the brochure effective. For e.g. A brochure is prepared for students in a very attractive designs and colours. It contains the pictures of the adventurous activities and youth enjoying the holidays.
- Budgeting:Budget has to be made for preparing the brochure. It is the estimation of amount which will be incurred and its preparation and it leads to successful implementation of planning within the costs defined.
- Time scale or action plan: An action plan has to be made so that the activities can be completed within the decided time (Holloway & Humphreys, 2012).
3.2 Assess the suitability of alternatives to a traditional brochure for different types of tour operators and recommend the most appropriate for your tour package.
Traditional brochures are those documents which contains the information about tour and its features in the printed form. It is effective n spreading the information but not in attracting tourists because there is no use of oral or lively communication between the tour operator and the customers. There are various emerging trends and new technologies which can be used nowadays by the tour operators for communicating the information about tour packages and to attract maximum no of people towards it. These new methods cover all the limitations of the traditional brochures and are an effective medium of placing a communication between the customers and the companies (Holloway & Humphreys, 2012).
There are many alternatives of brochures available which can be used by different tour operators like e brochures, travel agents, social media, direct selling, websites and more but among all these alternatives, the most suitable one can be the social media and online websites (Khare & Khare, 2011). For TUI, the most suitable alterative of traditional brochure for TUI for the holiday package for students will be these online channels or techniques because, in this digitised world, people are using internet and it has wide scope. This is better alternative because first of all, it is accessed by wider no of people and it also includes lower amounts of costs. People get convenience through online channels because they can get information about the tour packages by sitting anywhere in the world (Khare & Khare, 2011).
To convey the information about destinations, visual brochures can be used in which the destination can be properly viewed by the tourists and it can be easily promoted by the online techniques like emails, social media sites like Facebook or Google plus (Holloway & Humphreys, 2012).
3.3 Evaluate the suitability of different methods of distribution used to sell a holiday for different types of tour operator and recommend the most appropriate for your tour package.
Brochures are a very important and effective medium through which information about the tour packages can be shared and communicated with the tourists. This helps in selling maximum no of tours to the customers, bringing maximum profits to the company (Khare & Khare, 2011). To maintain a balance between the demand and supply and traditional methods has been proved quite good in this but now with the change in the demands, requirements, technologies and with the emergence of latest technologies, new methods of sales and distribution of tour packages has been developed. Different types of tour operator’schosesdifferent techniques to distribute and sell their packages. For e.g. the adventure holidays tour operator will use visual brochure for selling its products while the tour operator for educational tours will sell its products through different online educational portals where the students can be communicated and sales can increase(Holloway & Humphreys, 2012).
There are benefits and disadvantages of every technique but the suitability has to be analysed according to the type of services provided by the service provider. Also, the costs incurred have to be analysed and the profitability too. These are to be considered so that the most suitable method can be selected and strategic decisions can be made for the business.
4.1, 4.2 Evaluate the strategic decisions made by different types of tour operators and compare the tactical decisions that could be taken by a selected tour operator in different situations
This article is about the strategic decisions taken by Thomas Cook and Cox & Kings which are two tour operators in UK. Thomas Cook is the mass tour operator which provides travel packages customised and standard packages to everyone while Cox & Kings provides socialised packages to the customers like package for sports events, adventurous activities, heritage sites, etc.(Sarquis, et. al.,2015). Strategic decisions are those which help the company in achieving the objectives by increasing the capabilities of the company. It helps the company in meeting the company’s threats with the help of its strengths and it also helps in taking up the opportunities so that the weaknesses can be eliminated. The strategic plans help in bringing price efficiency and in maintaining the competitive position in the industry. Some of the strategic plans which are to be made by Thomas Cook and Cox & Kings are:
- Estimation of Demands: It is very important for businesses to forecast demand in advance so that they can provide services as per the demand of the customers. This surely fills up the gap between the demand and the supply. Thomas Cook and Cox & Kings both have to take care of the demand so that they can provide sufficient services to the customers (Pansiri, 2009).
- STP Analysis: It refers to the Segmentation, targeting and positioning analysis. Here, both the companies identify their target customers so that tour packages can be made according to the demand of the target customers and then they can be served properly. Thestrategies for positioning the products are also decided in the analysis. The targetcustomers for Thomas Cook are all the travellers but Cox & Kings targets the customers who want specialised tour packages. Cox & Kings can position its products through specific mediums which are related to the segment or target market but Thomas cook have more variety of mediums to position their products (Pansiri, 2009).
- Discount Pricing Strategy: Thomas cook and Cox & Kings can adopt discount pricing in the off seasons so that it can attract more customers in the season with no demands also. Attractive strategy for pricing can attract more customers.
- Risk Regulatory Framework: the companies have to maintain a framework which helpsthem in managing their risks. The tour operators might be at risk when the tourists don’t show up at the last time when all the payments are done. So, a framework will cover the risks of such nature (Evans, et. al., 2012).
On the other hand, tactical decisions are those decisions which are needed to be made for effective operations of the company. These decisions are needed to be taken to meet daily requirements and to solve short term problems occurring in the business strategy. These decisions might include negotiating with various service providers for bringing cost effectiveness in the activities of the company. These decisions are helpful in maintaining the speed and flexibility of the operations of the business and also helpful in maintaining good relationships with the stakeholders of the business(Evans, et. al., 2012). Thomas Cook and Cox & Kings also have to take some tactical decisions in their routine life. These decisions include:
- Decisions for meeting competition: The companies have to take certain decisions which helps in meeting the competition in the industry and maintaining a good position there (Zinkevi?i?t?, 2009).
- Pricing decisions: The companies also have to maintain a price which help them in attracting more customers and a price which brings competitive advantage to the companies.
- Decisions for business: The business of Thomas Cook and Cox & Kings have to take decisions for doing business with other service providers like accommodation, restaurants, transport, etc. so that no business activity can hamper and efficient activities can take place in reasonable prices (Zinkevi?i?t?, 2009).
- Segmentation and positioning: The business has to segment their markets and have to position their products according to the needs of the specific segments. For e.g. Thomas cook segments its customers on the basis of psychographic factors like traits, values, attitudes, lifestyle, etc. of customers. They also segment the customers on the basis of geographic segmentation while Cox & Kings is a specialist tour operator which segments its customers purely on the basis of their interests and requirementsi.e.Psyhographic or behavioural segmentation.
There are some of the factors which affect the tactical decision making of Thomas cook and Cox & Kings, these factors are Information and Communication Technology (ICT), the legal framework of rules and regulations, the economic conditions of the business which showcase how much financial and economic capability the business has. Tactical decisions are also based on the conditions of environment (Zinkevi?i?t?, 2009).
It can be concluded that the Tour operations management includes many aspects as it is a wide industry and is one of the highest contributors of GDP in the country. The assignment has been divided into four tasks among which one is poster containing the details about some recent trends of the travel and tour industry in UK which influences the business of tour operators. The project also discusses some promotional techniques for the tour companies. Brochures and its alternatives have been analysed. One of the tasks is about the given case of planning the tour of Chinese students from London to Paris which has been planned properly and at last an article in the magazine is published which shows about various strategic plans and tactical decisions taken by Thomas Cook and Cox & Kings which helps in the mouth operations of the business with minimum hurdles.
- Dolgui, A. & Proth, J. 2010, "Pricing strategies and models", Annual Reviews in Control, vol. 34, no. 1, pp. 101-110.
- Evans, N., Stonehouse, G. & Campbell, D. 2012;2003;2002;, Strategic Management for Travel and Tourism, Taylor and Francis, Jordan Hill.
- Huang, H., Wu, P., Wu, S. & Wu, C. 2015, "Construction of Decision-Making Model to Select Incentive Tour Travel Agencies", American Journal of Applied Sciences, vol. 12, no. 10, pp. 714.
- Khare, A. & Khare, A. 2011, "Blending Information Technology in Indian Travel and Tourism Sector", Services Marketing Quarterly, vol. 32, no. 4, pp. 302.
- Mair, J. 2011, "Slow Travel and Tourism. Janet Dickson & Les Lumsdon, London, UK: Earthscan, 2010, 232 pp. ISBN: 978-1-84971-113-5", Australian Journal of Environmental Education, vol. 27, no. 1, pp. 196-197.
- Medlik, S. 2012;2003;, Dictionary of Travel, Tourism and Hospitality, 3rd;3; edn, Taylor and Francis, Jordan Hill.