Unit 14 Tour Operations Management Assignment - TUI Group

Unit 14 Tour Operations Management Assignment - TUI Group

Unit 14 Tour Operations Management Assignment - TUI Group

Introduction

This tour operations management assignment - TUI Group report helps in investigating the tour operators industry of the travel and tourism sector. It also includes different type of operators and products and services offered by them. It explores stages involved in creating a holiday package and determining selling price of the holiday package. This report also discusses the role of modern advertisement tool and a comparison between modern and traditional advertisement and promotion tool used by the tour operators. This report also explain the strategic decision making and tactical decision making taken by the tour operators to establishes them in the industry for the long time period.

Task 1 - Presentation

Unit 14 Tour Operations Management Assignment - TUI Group

Task 2

I am working as tour operator for “TUI Group” of London, UK. I have prepared a report of organizing sightseeing tour for a group of 45 Chinese students. The tour is organising from London, UK to Paris, France. It is a 5day tourist plan. The tour plan is for summer vacation in August 2018.

2.1) Assess the stages and timescales involved in developing holidays

Following stages are involved in developing holidays:

Research:  As a tour operator I have researched about all the tourist places of London and Paris. I only involved those places for tour which have great attraction in tourist.  I included La Villette Park; Canal sent Martin, Eifel Tower, and Montmartre etc of Paris, France (Filby, Stockin & Scarpaci, 2015).

Arrangements and negotiating service providers: For sightseeing in London and According to my plan I will start the tour package from London. I will make arrangements for flight tickets from china to London for the group members and assembled at hotel near by airport. The whole group assembled there at night and then in departure for Paris from there. I have made all the arrangements for their living at the hotel. For travelling purpose I will hire a 50 seat Luxury bus from bus service provider. There will be a tour guide also. I made negotiations with the service providers. All the arrangements for staying will be made in Hotel St Michelle of Paris by us for the whole plan prepared keeping in mind that the whole group of student received full satisfaction with the services provided by us. We are only make arrangements as per the requirement of group.

Fulfil legal requirement: I will also make arrangements as per the legal regulations applicable on tour operators. I will make arrangements for Air Travel Organizer Licence (ATOL) which is managed by CAA in UK and Make other arrangement for the Paris tour which is applicable as per law (Applegate, Bixby & Chvátal, 2009).
These are the stages involve in developing a holiday plan.

2.2) Suitability of different methods of contracting for different components of the holiday and different types of tour operator

There are many parties involved in this tour plan like travelling agencies arranging flight tickets for the whole group, Bus service provider, Tour Guide and hotel. There are different types of contract options available with us we can make contract as per the nature of party and requirement. The contract options available to us are as follows:

  • Contract under Seal: contact under seal is a legal document which is enforceable on both the parties as seal will impose on the agreement. There is no legal benefit required for any party. We can go with this option with supplier of bus services and vendors.
  • Express contract: Parties state terms and condition of working either orally or in writing at time of its formation. In this one party offers something to other party and the other party accepts that offer. It is very simple method of doing contract. This type of contract is suitable for tour guide who will guide the tour group and explain them about the tourist destinations.
  • Unilateral contact: A unilateral contract involves a promise that is made by one party to other party. If that other party accepts the proposal of offer or then contract become executed. This is one sided contract because only the offer or who make promise will be legally bound. This option is also available for bus service providers.
  • Bilateral contract: Bilateral contract is two sided contract under this both the parties involved in the contract promises to perform with each other. The promise that one party make become a consideration for the promise made by other. We can enter in bilateral contract with the management of hotel (Brunner & Stolletz, 2014).

So there are many parties involved in this tour plan. We required a manager of tickets of flights, luxury bus from bus service provider, a tour guide who guides the group insight seen. After making research in the market bus service provider are interested in entering in express or unilateral contract. Hotel and living lounge service provider executes bilateral contract or contract under seal in which they defined all the facilities along with their charges in the contract. If we cannot use all the facilities provided by them they also offer us discount in prices. As a Tour operator I will execute the contract with these parties before the tour starting time period.
We are the outbound Tour Operator specialized in promoting and designing multinational tours. We sells tour packages to group or individual of our country and also arrange tours for foreign groups with the cooperation of other domestic tour operators of other countries (Zhu, Hu, Wang, Xu & Cao, 2012).

2.3) Calculate the selling price of a holiday from given information below.

Travelling agency has established network with partners in France and prepare a plan which provides selling rate of the holiday package as a whole and for each student

Calculation of selling rate of the holiday package:

  Cost Calculation Amount
  cost of rooms 45*54*5 € 6,210.00
  cost of BB 12*45*4 € 2,160.00
  Total variable cost   € 8,370.00
  1euro=0.9pounds     
  variable cost in pounds 8370*0.9  £8,154.00 
  cost of bus    £5,400.00 
  cost of guide    £900.00 
  total cost of tour    £14,454.00 
add: profit margin 20%    £2,890.80 
  total sales price of tour    £17,344.80 
  number of students is 45    
  price per student will be 3212£    

The above table shows the whole calculation of expenses of the tour package. The total cost of tour is £14,454 including the cost of bus service, cost of tour guide.
The total sales price of the tour is £17,344.80 which includes 20 % profit margine.and the price for per student is £3212. This plan is prepared on considering lowest prices after making negotiation at a special rate with the suppliers of services (Drozdowski, Kowalski & Mizgajski, 2012).

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Task 3

As a tour operator of “TUI Group” London I am working with the marketing department of my company for assessing the different strategy used for selling tour packages by company and planning for designing an attractive brochure.

3.1) The planning decisions taken for the design of a selected brochure:

Brochure is used as advertisement and promotion tool in tourism industry. It can be used as off line and on line tool for conveying information regarding the attractive tour packages and selling prices of tour packages to consumers. We are planning here to develop an attracting brochure for new tour packages because brochures having many advantages like it has low cost, high reach to the large group of customers, brochure can solve quarry regarding the product of company, provide the channel where people can get more information about the product and give information to people if any attractive offer made by the company. For designing new brochure proper search and planning is required.
Factors to be considered for planning related issues:  Issues like structure of brochure, objective of brochure, matters involve in brochure, type of customers and time scales are needed to be considered while planning for brochure. Planning for a brochure design involves following steps:

  • Decide budget for brochure design: Before starting planning a budget should be designed so that all cost can be controlled.
  • Objectives: Decide the objective for which the brochure is designing. We have to decide our target customers so that designing of brochure becomes easy.
  • Target Customer: decide the group of customers should be targeted by the brochure.
  • Collection of locus assignments. For starting planning for brochure started collecting different locusassignments.of brochures. Collecting those designs which are preferred mostly in the industry and collect information about the style, language graphics etc are used in that brochures and then select a suitable.
  • Decide format: Second step is design a format that how the brochure will look like and what will be the colour scheme of the brochure and also ensures that the format should not be matched with the brochures of other tour operators.
  • Draft Matter: Draft the matter which is going to present in brochure. It should be considered that matter should be small but includes whole information about the services of tour operate.
  • Fixing time period: Fix a time period for brochure designing so that it will complete on time.

All these steps are followed in designing brochure for “TUI Group” this will result an effective brochure design for the consumers (Tricoire, Graf & Gutjahr, 2012).

3.2) Assess suitability of Traditional brochure option available to tour operators of “TUI Group” and Thomas Crook and appropriate brochure for “TUI Group”:

Traditional offline Brochure option is also available to with the both organisations “TUI Group” and “Thomas Crook” of tourism sector.  With the advancement of technology Thomas Cook group modernise its advertisements strategy and change their medium from traditional brochure to E- brochure. E- Brochure designs are more benefited then traditional brochure printing which includes:

  • E- Brochures are flexible marketing tool than traditional brochures because we can choose and design our e-brochure as we like but it is not possible with printed brochures.
  • E- Brochures are time effective than traditional printed brochures because they can easily be available at any place and at any time.
  • E- Brochure can approach a lot of consumers at a time by sending the brochure online one can take quick response of consumers.
  • E- Brochures are also environment friendly than traditional printed brochure there is no waste of paper.
  • E- Brochure is a cost effective tool. It cuts marketing expenses to a great extent.
  • Easy to change: Designs of E-brochure can easily change and updated. If any need have change in the format or matter arises than it can be changed easily. This could not be possible with traditional Brochures.
  • New technology and graphic designing helps in giving high quality look to e-brochure. E- Brochure even can give feel of printed paper.
  • E- Brochures are easy to download it is not possible that we want and get brochure in our hand in case of traditional printed brochure.
  • Brochures are not only attracting potential customers but they also impressed potential supporters, investors and funders.

E- Brochure provides much benefit to the company in terms of cost and profit also. As Thomas crook already adopt e-brochure as marketing tool so, TUI Group should go with the option of adopting E- Brochure. E- Brochures can turn out to be more profitable for the business because they are easily assessable for everyone (Slumkoski, 2010).

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.

There are many options available for distribution of services to a tour operator many of them are adopted by Thomas crook. TUI Group should consider each option of selling services and select suitable one. Distribution channel includes following options:

  • Direct Sale: Direct sales means contact directly to customers without any intermediaries through conducting visits, mail order or online and control over presentation of offers and their price structure. Interacting with customers helps in receiving quick response from them and then change marketing according to them.
  • Hiring agents: Hiring agents for marketing the services of company is another option available in distribution channel. Agent helps in providing more customers to company and take commission for that. Here direct interaction with customer is not possible but services can be provided easily to them.
  • Partner: Another option for selling services is enter in partnerships with related and non competing business .Tour operators can sale their services with the partnership of bus service provider or they can enter in partnership with hotels. But in y=this tour operators can only offer limited services to their customer.
  • Opaque Distribution: Here services are reselling by some other sellers at a low price or at discount here the customer does not know about the actual seller of services. Travel and hotel industry adopt this tool now a days.
  • Online sale services: Tour operator can sale his services through online medium. E-brochure is tool adopted by tour operators to sell their services

As there are different distribution channels available for the tour operators whit help of these channels they can sale their services. Thomas crook competitor of “TUI Group selling its holiday packages through direct sale, telephonic sales and call centre etc. TUI Group may adopt direct sale option by employee more sales executives. They may also hire agents for selling their services and they can also sale their services online to the customers offer. For adopting these channels tour operators should have effective marketing strategy. So the company can use online and offline method for selling the services (Prideaux, Wei & Ruys, 2010)

Task 4

4.1) The strategic decisions made by different types of tour operator:

Strategic decisions are related with whole environment of the organisation in which a firm operates the entire resources and the employees of the company. Strategic decisions having great importance for any organisation. Strategic decisions deal with the range of organisational activities. Strategic decisions are made by top level management they are very complex in nature and deals with the future of organisation and involve lot of risk. Strategic decisions. Strategic decisions taken by tour operator includes following issue:

  • Pricing strategy: Formulate strategy regarding Prise structure is a most important decision. It is required to be taken by the top level management. Strong prising strategy is required to formulate by the tour operators. Many of the tour operators adopt discounted prising strategy where they offers services at a fixed rate to customer but offer high discount to them, tour operators can also go for economic pricing strategy in this they offers their services at a lower cost.
  • Seasonal Strategy: Season play a very important role in Tour industry. Tour operators should also frame strategy related with seasons because change in season affect the tour plan of customers. Strategy plans help tour operators in framing different holiday packages as per season requirement. For the seasonal strategy management must know that in which season their targeted customers are like to go on tours.
  • Segmentation, targeting and positioning Strategy: In this strategy three stages are involved segmentation identify different groups of customers for tour and travelling purpose. Targeting means select a particular group of customers for providing services to them and then positioning all efforts towards the selected group of customers to sell them services. This strategic decision also affect on pricing and promotion decisions so proper review of the situation should be taken before formulating STP strategy.
  • Competitive Pricing Strategy: To beat existing competitors of the industry a strong competitive pricing strategy is required.  Market research is required while formulating competitive price strategy. Competitive market strategy is very helpful and beneficial for the company because it attracts customers from the market and develops loyalty in customers in the high competitive market.
  • Promotional strategy: Promotional strategy should be creative because it will help the tour operator to promote their holiday tour packages. New technology and modern tools of promotion should be adopted by the tour operator for the promotion of different tour packages.

While strategic planning tour operators should take care about different key factors because achievement of strategic goal is depend on these factors. These factors involve engagement of staff of all levels, strong communication, creativity, project management and culture of the organisation. TUI Group and other tour operators should take strategic decisions regarding own price strategy, competitive price strategy, marketing strategy, promotion strategy and seasonal strategy considering their visions and mission statement. On the basis of strategic decisions tactical and operational decision are taken by tour operators to carry out day to day functional activities of company (Potgieter, 2010).

4.2) Compare the tactical decisions that could be taken by a selected tour operator in different situations:

Tactical decision making involves decision related with the longevity, profitability and continued improvement of all areas of operation. Tactical decisions are taken by the tour operators so that they can deal with day to day operational activity of business. Tactical decisions are formulated on the basis of strategic decisions taken by the company. Tactical decisions help tour operators in ruining the business in a smooth way. Tactical decisions cover following:

  • Tour operator can formulate short term pricing policy on the basis of strategic decision regarding price. Thomas Cook and Cox tour operators’ offers different holiday packages at a reasonable price. They both provide a wide range of holiday packages and tailor its packages toward the satisfaction of needs of the customers.
  • Many tour operators’ offers financial services to their customers in the form of car hire facility, airport parking facility, airport hotels and currency exchange facility etc.
  • Tour operators try to communicate with their customers for the purpose of direct selling of their services through telephone, call centre, mailing and sales executives and help them in deciding tour pancakes with an objective of increasing profitability and customer loyalty.
  • Some tour operators like Cox prepares tactical plans for achieving objectives and focusing on the strategies of its competitors.
  • Tour operator made more advertisement and promotion to attract more customers towards their services. They adopt e-brochure as an advertisement tool.
  • Many tour operators includes in its service product coin telescope and binoculars which help the perspective customers in collecting more information regarding other services and packages.
  • Many tour operators like Cox and Thomas Cook focuses on health and safety measures in flights for its customers this effort will increase faith and loyalty of customers towards the company.
  • Tour operators take a tactical decision about tie up with the several service providers. Before tie up with service provider’s type of customers catered and pricing policy should be considered.
  • To carry out customer research programme is another tool of tactical decision making.  Under this tour operator collect information regarding customer’s knowledge about holiday packages and with the help of the data tour operator prepare different and attractive holiday package for them. This will also help tour operators to find out problems regarding tour packages and framing remedial actions for them.

Thus different tactical decisions are taken by different tour operators in different situations arises towards them (Chand, 2011).

Conclusion

The report provides information regarding tour operators industry. It explains hoe a tour operators develop stages for designing holiday packages along with calculation of selling rate of holiday packages. This report gives a brief introduction about E- Brochure and its benefits over traditional printed brochures. This report describes strategic planning decisions and tactical planning decisions taken by different tour operators.

References

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Chand, M. 2011, "Strategic Alliance Practices in Indian Tour operation Industry: an Exploratory Study", International Journal of Hospitality and Tourism Systems, vol. 4, no. 2, pp. 30.
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