Tour Operations Management?Table of ContentsIntroduction 3Task 1 4LO 1 Understanding the tour operators industry within the travel and tourism sector 41.1 Analysing the effects of current and recent trends and developments on the tour operations industry 4Task 2 5LO2 Understanding stages involved in creating holidays 52.
1 Assessing the stages and timescales involved in developing holidays 52.2 Evaluating the suitability of different methods of contracting for different components of the holiday and different types of tour operator 52.3 Calculating the selling price of a holiday for Thomas Cook 6Task 3 6LO3 Being able to review brochures and methods of distribution used to sell holidays 63.
1 Evaluating the planning decisions taken for the design of selected brochure 63.2 Assessing the suitability of alternatives to a traditional brochure for different types of tour operator for Thomas Cook 73.3 Evaluating the suitability of different methods of distribution used to sell a holiday for different types of tour operator 7Task 4 8LO4: Understanding strategic and tactical decision making for tour operators 84.
1 Evaluating the strategic decisions made by different types of tour operator 84.2 comparing the tactical decisions that could be taken by Thomas Cook in different situations 10Conclusion 11Reference 12?IntroductionIn a globalised world, travelling has become a trend among the population of the world. This has created numerous business opportunities in the travel and tourism sector. This assignment is a detailed study of the various activities that a tour operator has to conduct in performing this business. Also, how recent changes are influencing the way of business for operators like Thomas Cook. The recent trends, strategy, steps to developing a holiday package as well as the tactical decisions made the operators are described in this assignment.
For the purpose of the assignment a tour package was developed and it was analysed as well.?Task 1LO 1 Understanding the tour operators industry within the travel and tourism sector1.1 Analysing the effects of current and recent trends and developments in the tour operations industryThe macro factors are having an impact on the tourism industry. The internet has created both opportunities and threats for the agencies. Also, the role of the consumer is also changing drastically. The current and recent trends in the tour operators’ industry are as follows-• Flexibility in Booking: One of the best things about technology is that it has made our life so much easier. People are able to book tickets and tours at home and at a time they prefer.
This has not only made tourism easier for them but also cheaper. This will hamper Thomas Cook because the tourist is able to find the cheapest tickets, hotels and places on their own. So, this raises the question what is the need for a tourist agency.
Thomas Cook need to find ways to answer this question (Ryan, 2011).• Independent Travellers: The nomadic life is becoming very favoured amongst individuals who travel to pursue a hobby like a mountain biking, trekking, climbing, surfing and all other activities. By using the internet, they are able to find great deals without the help of the tour operators. This has lead tour operators like Thomas Cook to lose profit (Richards, 2015). These independent travellers don’t want the luxury of the tour they prefer to be integrated with a place.
• Destination Marketing: Advertising agencies are being hired by tourism agencies to advertise or promote a certain destination. This is done to enhance the image of a certain region and attracting tourists. VisitBritain or other projects are an example of this destination marketing. Thomas Cook needs to keep this in mind while taking on promotional activities.• Technology: Technology has created a new marketplace that comprises of diverse customers and fragmenting media.
Technology has created endless opportunities for marketing. This has created the term prosumers which means the customers who actively and voluntarily participate in designing and shaping the products. Their opinions and suggestions should be taken into consideration by Thomas Cook taken while designing products (Archdale, 2010).• Spreading of Tourism: In the recent past tourism was not for the mass people. The upper class fancied tourism and others only travelled as a necessity, not leisure.
But the emergence of a middle class has led to rapid changes in it. The ability to provide affordable tourism packages by the tourism agencies has to lead to the increase of market size for tourism. Thomas Cook is profiting from this because they are a company that is able to provide tours at a lower cost. This means that they are able to get more customers.• Sustainable Tourism: The increasing awareness about the environment is visible in the tourism sector as well.
The term sustainable tourism refers to making a positive impact while visiting a place. Thomas Cook needs to ensure that the tourist attractions remain viable and they will be enjoyed by people in the distant future as well (C. Michael Hall; Diem-Trinh Le-Klan; Yael Ram., 2017).Task 2LO2 Understanding stages involved in creating holidays2.1 Assessing the stages and timescales involved in developing holidaysTo develop holidays various aspects should be taken into consideration by the tour development manager.
Many factors impact the process of developing holidays for operators like Thomas Cook. Initial planning to analyse the alternatives and to select the best alternative is very important. Different stages of the development process are as follows- Figure 1 Stages for developing tour packages (self-creation)• Research: The first step in developing a holiday plan Thomas Cook is to search for places that can be an effective tourist destination. To do this identifying the individual need is important. Doing a proper market audit by using tools like PASTEL or other tools will help to properly identify a place.• Itinerary: After selecting the place for a holiday Thomas Cook has to plan the to-do list in that place.
This can be referred to as a summarised form of the tour plan. The accommodation, food, transportation and a list of activities to perform in the tour. This itinerary will include the destination (i.e. Malaysia), the method of travel, the hotels, the food, the tourist spots to visit as well.• Pricing: Proper pricing method is required properly price the holiday package.
In pricing the exchange rate, accommodation and transportation cost, food, tax rates of different countries should be taken into consideration. The customer’s preference and the required facilities will determine the price (Armstrong et al., 2016). Thomas Cook focuses on being the “leader in price”. So, the pricing has to be done accordingly.• Promotion: Promotion means an activity that publicizes a product, organisation or venture to increase sales and awareness.
The promotion has to be done to ensure that the target customers are aware of the tour package and to increase the size of the customer base. Effective utilisation of marketing resources will help to attract the customers and the effectiveness of management will help to retain them (Ashworth, 2011). Thomas Cook needs to design attractive brochures and commercials in order to promote themselves.• Implication: This is the final stage of the development process. There should be the effective implication of the plan to make the plan come to life.
Through this, Thomas Cook will be able to achieve success. Effective planning and proper management are required to control the overall process in order to make an impact on overall performance of the holiday plan.2.2 Evaluating the suitability of different methods of contracting for different components of the holiday and different types of tour operatorIn tour operations, different contracts with different parties have an impact on the overall operations management of Thomas Cook. The following types of contracts are used in accordance with the attributes and characteristics of the operators.• Transport: Transport plays a vital role in a holiday package. Without the integration of transportation, it is not possible to think about modern tourism.
In designing a holiday plan Thomas Cook needs to make contracts with transport authorities. Transportation can range from airplanes to local taxy. To take the tourists on a visit to the local beach or park Thomas Cook could hire a car. The policies and the decisions of the government determine the availability of transport in relations to tourism.
• Hotels: Individuals prefer to spend quality time with family and friends while exploring various places of the world. So, accommodation facility is deemed quite important in modern tourism. Hotels provide the comfort of a home outside home. This helps the tourist to relax after a long day of sightseeing. There can be a long-standing contract with the hotel authorities to give Thomas Cook a preference. Clients booking through Thomas Cook will get preference and the bookings shall be done on per night basis.
• Attractions: The most important part of the tourism package is the place of tourist attraction. Every other aspect just revolves around it. The places help the local economy to get a boost by the contributions of tourists.
Also, the attractions are associated with earning foreign exchange. The visitor attractions in Malaysia includes the Petronas Towers, Gentling Highlands, Batu Caves, Aquaria KLCC, KL Forest Eco Park etc.• Food: Food is another important factor in tourism. Thomas Cook needs to check the quality of the foods that will be provided to their clients. Hygiene and nutrition should be the main focus here.2.3 Calculating the selling price of a holiday for Thomas CookThis task will focus on calculating a selling price for the sightseeing of the customers who are willing to visit ancient heritage sights, wildlife along with tropical destinations. For this batch, Malaysia is the perfect place with heritage sights, wildlife along with a tropical destination.
The tour package will be for 5 days and the total cost will involve the followingSL No. Details Price Per Person (In Pounds)1 Airline 352-4002 Transportation 400-6003 Hotel 40-504 Miscellaneous (including food) 200-3005 Total Cost 992-1350The total cost for Thomas Cook will be ranging from 992 pounds to 1350 pounds and if they are willing to make a profit of 10% then the selling price will be 1092-1365 pounds.The tourists will visit places like Taman Negara, the Batu Cave, the Kualalampur Tower and the Morib Beach. The price of packages will vary on the type of hotels, the airlines and the foods.Task 3LO3 Being able to review brochures and methods of distribution used to sell holidays3.1 Evaluating the planning decisions taken for the design of selected brochureThe brochure is important for tourism management for Thomas Cook because it is a useful tool for promotion. Making a brochure is cheap and it is able to reach a large customer base as well.
The planning process of designing a brochure for Thomas Cook is stated below-• Research: In this step, all relevant information related to the tour is collected. This includes information like legal materials, background material backed by effective research. The client’s expectations should be gathered by conducting a proper market research (Du Plessis, Strydom and Jooste, 2012).• Concept Design: After gathering the necessary information the next step is to design ideas.
Creativity is very important at this stage. Various combinations of colour, typography, keywords, technology and graphic style are kept in mind to design a brochure. The most effective ones are further developed to create the perfect design. In this process, client feedback is sometimes taken into consideration (Clapham, 2012). Figure 2 Planning Decisions for Brochures (self-creation)• Design Development: After a design concept is taken it is developed further. The concept is implemented in all other relevant factors such as the websites, an advertisement. This stage requires detailed specification and proper evaluation of the concept.
• Implementation: After thorough development the final artwork or the brochure that is produced. If the brochure is used in an online form then effective method are used. And if the brochure is in print then print ready pdf is produced to print the brochure in the required type of paper.
Also, the designs are converted into HTML code for websites.• Supervision: Quality control is always important. After the brochure is produced the client feedback has to be gathered in order to understand whether this brochure is able to perform the work it was designed to do (Winer and Dhar, 2014).3.
2 Assessing the suitability of alternatives to a traditional brochure for different types of tour operator for Thomas CookThe emergence of new attractive alternatives in promotion has challenged the need for a traditional brochure for tour operators like Thomas Cook. The website and their social media pages provide a detailed information about the tour packages of the organisation. This has reduced their printing cost substantially. Also, websites like VSIthinking help the customer to get access to brochures of the various organisation.
This online brochure can be checked out by phone, laptop or tablet.Moreover, promotions in television can provide a suitable alternative to brochures because people are hooked onto tv now. Advertising in this medium will lead to a larger audience for Thomas Cook. As well as advertising sponsorship deals could be another strategy for Thomas Cook as people may switch channels in time of advertisements but they will definitely know the name of the sponsors (Ashworth, 2011).Publications are another way of promotion for Thomas Cook. Lifestyle magazines are sought after by a large number people in the UK and all over the world. Advertising in these magazines will attract influential customers who will be able to gather a large number of customers. Travel magazines are another alternative to brochure and feature in these magazines reduce the cost of promotion for Thomas Cook substantially.
Although, it can’t be ensured which is the best alternative for Thomas Cook it can easily be said that various alternatives are available than a traditional brochure that will not only reduce the cost for Thomas Cook but also increase profit as well.3.3 Evaluating the suitability of different methods of distribution used to sell a holiday for different types of tour operatorMethods of distribution refer to the channel or organisations that will help to advertise the company (Robinson, Lu?ck and Smith, 2013).
In this large world it is not possible for Thomas Cook to promote its activities on itself. So, they use various channels to help the customers know about their products. These distribution methods are not only economical but also effective as well.
They are efficient in the distribution of packages and support services on behalf of Thomas Cook.Various methods of distribution used by Thomas Cook are as follows-• Direct Selling: In direct selling, Thomas Cook sells their product directly to their customers. It is the most traditional mode of distribution. It is the most effective as well. They approach the customers on a one on one basis and sell their product directly. Direct selling is based on field sales calls.
Thomas Cook still uses a sales team that locate the prospective customers and by inducing them they make them into actual customers. They use telephone operators to attract new customers and persuades them into future bookings.• Newspapers: Newspaper is the most relevant form of print media that allows companies to reach a wide range of customers. The newspaper gives wide coverage at a very low average price. Also, it is effective and provides flexibility in design and information shared (Ma, Zhou and Zhou, 2013).• Brochures: Similar to newspapers brochures are a cost-effective way to reach a wide variety of customers. The brochure also helps to attract customer base with their splendid design.
• Internet: The internet is creating opportunities for advertising and Thomas Cook is using those opportunities. The social media plays a huge role in this sector to promote the packages of Thomas Cook. It reaches a wide variety of customers and is done at a very low cost.Task 4LO4: Understanding strategic and tactical decision making for tour operators4.1 Evaluating the strategic decisions made by different types of tour operatorStrategic decisions are decisions that are closely related to the long-term planning of the tour operators. In conducting the business tour operators must make many strategic decisions and these strategic decisions are as follows-• Segmenting, Targeting and Positioning: Market segmentation is the process of dividing the broad market or consumer group into smaller sub-groups.
This could be based on certain characteristics of demographics, geographic, behavioural and psychographic. After segmenting the market, the next task is to select a target market of a market segment to offer products to. Companies like Thomas Cook will also have to position themselves on the market. Currently Thomas Cook looks to attract families and veteran. Position in marketing is the place that a company associates itself in the minds of the customer (Pansiri, 2010). Thomas Cook positions itself as the “leader in price” by offering the best deals.
• Seasonal Strategy: There is a tendency among the consumers to travel at a certain time of the year. This is referred to as the travelling season. It could be on holidays or in the summer. In this time the price of the packages is modified by Thompson UK to ensure maximum profit while ensuring customer loyalty (Landthaler, 2014). They offer discounts during the summer to attract a larger customer base.• Innovative Promotion Strategy: Exclusive and innovative strategies are very important in attracting a large number of individuals. Promotional strategies also assist in tackling the competition. Various media like the print media and electronic media are used by tour operators in this regard (Hospit, 2017).
Cox’s and Kings have created numerous commercials and these are helping them to deliver brand awareness to potential customers.• Pricing: Pricing is perhaps the most important strategic decision when it comes to business. The price of the tours should reflect the services provided by companies and the services sought after by the tourists. This price dictates the segment that the organisation will serve. There could be more than one price for a tour at the same destination depending on other facilities provided. For example, Emirates lets their client to choose from a range of hotels. This lets their clients to customise their tour as well as the price.
• Portfolio: Portfolio means to invest in a diverse range of investment opportunities. By adopting portfolio tourist agencies will be able to attract a large number of customer and will be able to minimise risks. Thompson, another tour operator has cruise options for their clients. This lets them to attract another market segment.
?4.2 Comparing the tactical decisions that could be taken by Thomas Cook in different situationsStrategic decisions refer to the long-term decisions that are closely tied to the mission and vision of an organisation. In contrast, tactical decisions are medium-term decisions that are taken in accordance with the strategy of the organisation. A wrong strategic decision could take the business into ruins but tactical decisions have a more limited impact and this impact can be mostly overcome as well. Also, in order to make a strategic decision the management of organisations like Thomas Cook must take into account of the future market situation but in terms of tactical decision making the managers do not need to think about the future it deals with the here and now. Moreover, the strategic decisions are taken by the upper management or the thinktank of the organisation but tactical decisions can be taken by the middle and the lower tier of management.
Strategic decision is like getting the company to reach a specific destination and in tactical decisions the managers are steering the company to the path that will lead them to the destination. Strategic decisions are implemented keeping a long term in focus but tactical decisions are frequently implemented.There are various ways that Thomas Cook can take tactical decisions. These decisions will depend on many external forces as well as internal.
For example, if there is a high market competition then Thomas Cook will have to position themselves differently than other companies and they will have to focus more on quality to ensure a loyal customer base. Without loyal customers, they will not be able to generate much profit. To gather loyal customers Thomas Cook can take policies like discounts for long-term customers. Membership cards can also be given to the premium customers.
If the market has less competition then Thomas Cook will not have to moderate its packages keeping other company’s in mind (Vladimirov, 2012).Higher competition in the market sometimes lead to price wars but this decrease in price is not a sustainable option for Thomas Cook in the long run. In times like these price competitions will drive most of the agencies out and will be a hindrance for new entrants. In the off-season, Thomas Cook has to first focus on breaking even and then will have to try to generate profit through discounting.?ConclusionThe assignment focused on the detailed study of the factors relating to the effective management of tour operations. The package tour development manager has looked into various factors that affect the market and the recent trends in the industry as well. The emergence of new travellers and their preferences have shaped this industry differently. Recently operators were the go-to guide for the tourists.
But with the help of the internet that is changing. People can take a tour when they want, how they want and at the price they want. This has led to the rise of new problems for the organisations.
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