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Unit 14 Tour Operations Management Solution Assignment
Tourism Industry has grown exponentially over the past few years and has gained tremendous popularity among the foreigners and domestic consumers. Especially, in the European regions, the demand of tourism is considerably high and that has led to the birth of many tour operators over the year. In this assignment, the learner plan to discuss the various aspect of the tour and tourism industry, thereby discussing the various areas with the help of secondary research and journal. The learner explores the various segment of the industry and discusses the issues and opportunities that tourism industry holds for the future.
1.1 Recent and current trends on tour operator’s industry and its development
With the advent of technology and now internet, consumers have got the freedom to explore the various opportunities when it comes to touring. There are so many organisations in the European countries that offer various solutions and services to its consumers. Especially, the holiday packages are one of the current trends that every consumerlooks forward to. Internet is filled with such type of offers on holiday packages that attracts consumers. In order to reach a global consumer, tour operators are generating their own websites and mobile application to become visible in the market ((Blanke and Chiesa, 2013). Apart from that, marketing is yet another segment of this business that helps them to gain visibility in the market. In addition to this, the recent trends that have gained visibility on social media and magazines are tours that take you away from the civilization. The consumers are now more interested in travelling places that are unique, isolated and have natural essence to the trip.
Consumers are moving away from the crowds and rush and are looking for places that cut them off from the world. Millenarians are looking for places that are unique and can provide authentic experience to the travellers. However, not all consumers are same. There are many consumers who could not afford to travel to places due to high prices, but now with a more spending limit, consumers are slowly moving ahead and gaining confidence to travel the world with their loved ones.International trips have increased from 13% to 20% and are expected to increase to 46% by 2020 (AlSayyad, 2013). Consumers are more than ready to spend because they believe it is worth the money. Among the youth, the ratio has increased due to word of mouth publicity. There are many tour operators in European regions that provide out of the box activities that thrills the consumers. Therefore, to sum up, the recent and current trends that have gained immense popularity are unique places, destinations that have a more natural touch, out of the box holiday packages and many more for consumers.
It has been observed that the demand of chattered service in UK has decreased by 10% in 2 years. The trend of the travel and tourism industry has been changed their strategy for this kind of change in market. On another hand, LCC’s discrimination through direct online sales and development of online virtual travel agencies have offered innovative tourism related e-commerce linkage to hotel accommodation, car rental, insurance, tourismamenities in the form of dynamic packaging so that the travellers can arrange their own travel itinerary (Ghimire, 2013).
It has been noticed that travel and tourism industry now changed their strategy. Now they are very much focused on the technology development which significantly lowers the barriers of entry to the travel market. Now travel and tourism industry has shifted the power from the suppliers to customers. In order to maintain customer satisfaction, poplar travel companies have provided the customization of tour package. It has been noticed that this process has increased the market share by 24% (Goodall and Ashworth, 2013). As a result the travel agencies have gained more than $200 billion profit in 2013 (Hall and Page, 2014). On another hand the travel agencies have thought in future the profit will decrease due to bargaining and discount policy.
2.1 Assess the stages and timescales involved in developing holidays:
As stated by Sharpley and Telfer, (2014), there are generally three types of tour operated by the tour operator such as out bounding, incoming and domestic. According to the case scenario, the tour package will be based on the 45 Chinese students of London, who want to visit United Kingdom, Paris, France for atleast 5 days. Therefore the travel and tourism agency has to follow some major steps to design the entire travel guide.
Research: The travel and tourism organization has to implement a market research to analyse and understand the key elements which are associated with particular tourist market and destination. On the other hand the tour operators have to understand personal choice of 42 Chinese students. After that the tour operators will research whether their selected plans suits on the group of Chinese students or not (Hudson and Thal, 2013, p.157). On another hand the economic, political, social and climate factors influences package tours in future.
After conducting full research on the economic, political, social climate and customer’s psychology, the tour operator has started the selection process for destination and tour ingredients. As stated by Leung et al. (2013, p.21), the new tour operators have implemented the familiarization tour and tour operators have developed the itinerary after any successful tour operation. Tis process will help tour operators to classify the vendors into categories or rating from extremely bad to outstanding. After choosing the correct category, the tour operators has to contract with the vendors such as car service, hotels in United Kingdom, Paris and France. It has been observed that vendors provide more convenient ad comfortable facilities during the visit (Huang et al. 2013, p.493). Therefore, the tour planner has to undertake all possible attributes of the tour which are unidentified individual traveller. Therefore the tour planner has calculated the entire time span of the tour package.
It has been observed that the tour operation planner has an opportunity to negotiate with the vendors and tourists. In this case scenario the tour operators will discounts in group ticket of flight. If the tour and travel organization is popular and old, then they will get better opportunity to negotiate with the vendors. On another hand some travel and tourism organization has their personal flight service such as Thomas cook, so they can offer comparatively cheap price for this trip (Munar and Jacobsen, 2013, p.5). It has been observed that the travel and tourism organization has negotiated with hotel prices. The hotels and restaurants often provide discounts to the hotels for their own promotion. Moreover the reliability and honesty improves the tourist satisfaction.
The tour costing is focused on the understanding the connotation of tour management in determining the nonmonetary value of the tour package. The minatory value of the tour package is depending on the pricing strategy of the vendors (Sparks et al.2013, p.6). However the monetary value is depending on some facts such as air travel cost from London to United Kingdom, UK to Paris, Paris to France and France to London. Apart from that accommodation will be decided from the rates of hotels. The travel agency has to calculate the local sight scene arrangement cost, payroll cost and research cost and marketing cost as a total expanse. After that the travel agency has to set the package price for the group of Chinese student group.
After implementing the actual cost of the total package, the tourism organization has to determine the exchange rates, estimate future selling price and finalize the tour price. It has been observed some hazard during the tours may create the financial risk for the organization. As stated by Connell (2013, p.8), usually financial hazard has been identified by the tour operators in different ways such as foreign exchange, ticket booking of airplane and train, hotel payment and other destination agencies. It has been observed that exchange rate is fluctuated due to some external non controllable factors, government policies, climate, inflation, competitive price, and market segment penetration.
It has been noticed that the tour business is a seasonal business therefore the tour operator appointed some executive as a guide or supervise the team of Chinese students. Therefore the salary of the guide or supervisor is also added with the price of the package.
2.2 Evaluate the suitability of different methods of contracting for different components of the holiday and different types of tour operator:
It has been found that every tour operators try to make their trip memorable to the tourists. The duties of the tour operator are divided in three segments such as mainstream, destination and accommodation and specialist activity.
As stated by Thakran and Verma (2013, p.244), TUI is popular for providing hotel accommodation, arranging excretions and tours, events and meetings and cruise service. Therefore popular tour operators and travel agents and corporate client always maintain good relationship with them. Therefore TUI is selected as a top selling brand for hotel beds, rooms, inter cuisine and lounge. According to client’s feedback they are quite happy with the services. The organization has claimed that their specialist activities support more than 100 global travel businesses to fulfil the holiday and requirement of travel to customers. They have implemented different methods to make the holiday attractive such as:
TUI is selected as most popular brands in terms of adventure and experience. Adventure is acted as a strategic partnership between TUI travel’s adventure travel businesses. On another hand the TUI has become the largest adventure tourism company in travel business.
The organization has designed special tour packages for the students of schools and university. This organization is considered as a specialist for educational tours, ski trips, holiday activity, scientific excretion and hill climbing adventure. Therefore, this organization is considered as educational brand.
This travel and tourism organization is considered as world’s leading yachting and marine recreation brands such as mooring and Sunsail. On the other hand, this organization also provides self-driven boat on rental basis in Europe.
North American Specialist:
It has been found that maximum travel companies are located in United States and Canada. The focus of almost every travel companies are on escort tours and adventure tours. Quark Expeditions is considered as world largest travel company.
It has been found that TUI has owned a leading position in sports tour market. They provide sports tour for bot spectators and corporate clients. Popular sports brand like Gullivers Sports Travel and sports world is one of sports tour organized by TUI (Ayehet al. 2013, p.135).
As stated by (), Cosmos Holiday is considered as a largest independent tour operator in UK. This organization provides safe and secure travel and tourism service for almost 50 years. It has been observed that Cosmos holiday has offered flexible packaging to their clients including beach, multi-centre, tour and stay. This organization also provides cruise and city breaks service for more than 62 popular destination all over the world (Standing et al. 2014, p.85). The tourists can choose their suitable tour packages from different packages such as Caribbean, Florida, Egypt, Indian Ocean, Goa, North Africa and Mexico. Apart from this, the organization offers several attractive [packages such as finish Lapland Santa Adventures, ski holiday and dream wedding.
The organization claims that the holiday trip really makes difference experiences in tourist’s mind. The organizations always try to protect natural environment, tradition of the place and culture. As stated by Dickinson et al. (2014, p.86), tradition and culture also attract tourists towards the place. The local culture and cultural activity of the people makes holiday better for the tourist.
Bales Worldwide is another big travel group which carefully designed their travel packages for escorted group and adventure travel. The experts always provide value for unique test of the tourists. The organization provides full freedom to customize your tour packages. The organization is specializing for their signature tour package such as Explore China’s Silk Road and Cruise on Mekong River. The organization is popular for their gold packages such as Mesmerizing North India and South America’s Amazon Basin (Munar and Jacobsen, 2014, p.48). Apart from that, the organization organizes everything, which is closely related with travel such as international flight services, accommodation, sightseeing arrangement and knowledgeable guide service. The organization provides travelling and tourism service in almost 50 different countries.
2.3 Calculate the selling price of a holiday from given information below:
- It is assumed that the tour is for a single day (One night stay)
- It is assumed that the number of people on tour would be 50
- Bus fare and travel guide cost has been apportioned among 50 people
- 1 Euro is equal to 0.85 British Pound
3.1 Evaluate the planning decisions taken for the design of a selected brochure:
On beginning, every travel agency has to understand that it is not like regular business. They have to develop their own market. The organization has to understand their target audiences in market. The brochure is one of the simplest ways to reach to the target audiences. As stated by Blanke and Chiesa (2013), brochure is none other than printed marketing collaterals. The organization has to analyse the important information in attractive way so that the audience can get proper information about the tour packages. The organisation must be very careful about the content of the brochure because irrelevant content may create negative effect on customer’s mind. Therefore, the organization can follow some easy steps to design their brochure:
Attach attractive picture of popular tourist spots:
As stated by AlSayyad (2013), the tour agent is acted like a mediator between tourist and travel organization. On the other hand, they have to decorate their brochure in an attractive way so that the tourist attract towards the organization. Therefore, the tour agent has to great shots, pictures along with short tag line like“Explore Egypt”so that people will be interested to more about that place.
Add proper description in a simple way:
After that the organization has to highlight the some popular places and include short description with pictures (Hall and Page, 2014). The organization has to create suspense and not to disclose too many things about the place. Apart from the organization has to design description section by light colour background so that the contrast matched appropriately.
The organization has to engage the interested readers to check up description closely. Apart from the organization has to include the contact details in the information section (Goodall and Ashworth, 2013). The important information should be readable and the front size would be proper. Apart from that the organization can include list of available hotels and additional services that they offer.
Highlight the promotional plan:
As stated by Ghimire (2013), well promotional plan increases the popularity of the organization. Therefore the organization has to implement some discounts and policy for some special package like 10% discounts on the group of 15 people. This additional marketing plan should be highlighted alongwith packages and mentioned in the brochure.
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.
It has been observed that tours and travel organization has implemented package holiday system to provide better satisfaction to the tourists. At that time the business brochure has been considered as most important element of the marketing mix of any holiday operator. As stated by Sharpley and Telfer (2014), business brochure is most traditional and efficient process of marketing. It holds important data about the subject. Therefore, customers know about the subject and interested to buy that product or service. After observing the efficiency of brochure, almost every travel agency have designed their brochure but it is not cost effective process. It has been observed that almost 10% people are interested to come directly after reading the brochure carefully (AlSayyad, 2013). On other hand it has been observed that 90% people have not much time to observe brochure carefully (Ghimire, 2013). They simply drop it in storage or bin. Therefore the brochure is not efficient way to attract the customers. Therefore, the tours and travel agencies have to maintain some properties to improve their traditional marketing style:
- Every agent has to advertise the attractive packages alongwith price clearly
- The organization has to highlight the lower possible rate forth packages
- The organization has to mentions the each and every inclusion in the brochure
- The hotels name and vehicle types should be mentioned properly
- If there will be some additional charges for some additional facilities such as entry fee of parks, museums and amusement parks.
- The organization has provide some reference documents for expressing the speciality of that particular tourist place.
- Make the customer headache free and make them happy so that they can enjoy their holidays
Apart from that, the organization has to publish e-brochure to increase the cost efficiency. Now almost every global travel and tourism organization has publishes e-brochure to promote their packages of relevant holidays. The e-brochure system saves cost and reduces wastage of money. On the other hand some travel agencies have distributed CDs with popular travel magazine (Hall and Page, 2014). However, this process is much costly that e-brochure system. Therefore, new travel agencies have to implement brochure system for promotional purpose.
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.
It has been observed that there are generally five types of distribution channel available for the tour operators such as internet, email, company portal, telephone and conventional mail. Generally those distribution channels are used for direct and indirect sell purpose. As opined by Sharpley and Telfer (2014), increasing level of use computers and internet has created more scope for the organization to identify proper distribution channel. It has been noticed that the distribution channels are not only used for only one purpose but also different purpose. As an example it has been found that Thomas cook is not using internet for only promotional purpose but also the internet is used for marketing research purpose.
Therefore the organization has used multichannel retailing system for sustainable growth and profit margin expansion purpose. The organization has developed the integrated strategy across all channels such as physical stores, internet, social media, catalogue and mobile application service. It has been noticed that more than 1.9 billion people use intent regular basis (Munar and Jacobsen, 2014, p.49). Therefore, e-brochure and electronic promotional strategy will be most efficient strategy for new organization.
4.1 Evaluate the strategic decisions made by different types of tour operator:
As stated by Standing et al. (2014, p.103), before twentieth century almost every travel and tourism organization used long term strategy for developing their business. This process is more specific and based on the characteristic. On the other hand the long term strategy creates more scope for the organization. However, it creates some barrier while configuring the resources according the change of environment. Therefore, some organization has changed their strategy to modify themselves according to the environment change.
- It has been noticed that TUI has focused on the diverse culture and international colleagues while developing their portfolio.
- Cosmos has changed their aim as to provide everything which makes their holiday enjoyable and perfect
- Monarch Group has planned to promote responsible travel and try to lead the way to implement future sustainability.
4.2 Compare the tactical decisions that could be taken by a selected tour operator in different situations:
Almost every popular travel agency have implemented tactical decision to establish the key initiatives for achieving overall strategy. It has been observed that the tactical decisions are medium term decision and it supports strategic decisions.
It has been noticed that the tactical decision of TUI travels support their strategy (Thakran and Verma, 2013, p.245). They always try to respect the customers and provide best services to make holiday trip memorable. Therefore, their customer loyalty and trust helps them to improve customer relation.
On another hand the cosmos has also developed their service. They have changed their business view angles. They considered their customers as a guest rather than members. Therefore, the resort staffs always care about the guests and ensure that guests can spend best possible holidays with pleasure (Connell, 2013, p.9). They have created environment friendly green resorts to provide refresh environment to their guests. Therefore, customer satisfaction increases their market values gradually.
This assignment is based on different understanding of the tour operator. The learner has critically describes the effects of current and recent trends and developments on the tour operators industry. After that the learner has described the development process of the holiday package along with different suitable methods of contracting for different components of the holiday. The learner has evaluated the planning process, stability of traditional brochure and recommended most appropriate process for advertising and promotion. Finally the learner has evaluated the strategic decisions of TUI, Cosmos and Monarch Group along with comparison among their implemented strategies.
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