Tourism Operations Management

In this report TUI AG which is an Anglo-German multinational travel and tourism company headquartered in Hannover, Germany is taken to understand aspects of tour operation management. It is one of the largest company which deals in travel and tourism and it owns various travel agencies, hotels, airlines, cruise ships etc. so that its customers can have a world class experience of travelling. In this report details about the roles and functions of a range of tour operators, scale and structure of tour-operator-industry, stages of developing holiday package etc. will be discussed. Further strategic and tactical decisions taken by tour operators will also be discussed. There will also a be a review about a package tour programmes so that the decisions that are made while making decisions regarding deciding price of tour package can be analysed.

Roles and functions of a range of tour operators

Tour operators are businesses who combines tour and travel components so that a holiday package can be created. These types of businesses organise tours for people by giving them an organised itinerary and making arrangements for them related to accommodation, conveyance, food and beverages etc. so that a complete holiday packager can be formed. TUI is a tour operating company which plan holidays for its customers and give them quality services so that high value can be created (Ghaderi, Mat Som and Henderson, 2015). Tour operators also advice customers different travel destinations, transportation facility available, best season of visiting a place etc. 

Types of tour operators

• Mass market operators: These operators design holiday packages for a group of people at a time which involves a good knowledge about the tourism industry so that tours can be designed at most affordable prices. For example TUI which is well known for designing tour packages for mass population at a time, at affordable prices and with highest quality of services (Goffi, Masiero and Pencarelli, 2018).

• Independent operators: These are the operators who work in their individual capacity to organise tour packages for people and making arrangements regarding travelling, accommodation, food etc. They make customer specific tour packages which are in accordance with affordability of customers.

• Domestic operators: These are the tour operators who manage holiday packages within national boundaries which means that they play an important role in promotion of local tourism.

• Incoming operators: These are the operators who make arrangements for travellers who travel from different locations. The services given by them includes car rentals, tourist guides, sightseeing etc.

• Outbound operators: These operators make travel packages for customers so that they can travel from one country to another of their choice. They help in promotion of international tourism (Ivanova, Klimova and Rozanova, 2018).

Roles of tour operators

The various roles that are performed by tour operators in the context of TUI are:

• Product development: This function is related to developing the products in accordance with their needs an wants of travellers so that their services can be customised as per their budget and their preference. TUI develops the products and services as per the needs of its customers so that maximum value can be created for its customers.

• Marketing and sales: It is also the role of tour operators to market the services and products related to travel and tourism so that their sales can be increased. TUI markets its packages and travelling services through advertising on social media, print media, through internet etc. so as to attract customers and increase its sales.

• Advising customers: Tour operators also advise customers regarding places to visit, seasons that are suitable to visit a location, budget that will be required etc. so that detailed information can be given to customers (Manente, Minghetti and Mingotto, 2015).

• Travel information: Tour operators gives information to customers regarding the itinerary, destinations, accommodations, travelling modes etc. so that customers can travel safely and happily to their desired destinations.

• Operations support: Various operations are also handled by the tour operators like accommodation, hospitality, travel and transportation etc. so that the these supporting services can help customers in having a comfortable travel experience.

Scale and structure of tour operating industry

With the increase in scope of travel and tourism industry, role of tour operators is increasing and there can be seen an annual growth of 2.3% in the number of tour operator businesses in UK. The estimated worth of tour operator industry is about £14.9bn with the increase in holiday packages that are purchased by travellers in UK. The number of employees working in the industry are 29,038 (How is the Industry Trending in the UK? .2020). There are various tour operators which provide services related to tourism like Thomas Cook, TUI, AITO etc. which operate in UK. A comparison of mass market and independent specialist operators:

TUI company: TUI is a well known mass market tour operator which form holiday packages for a group of people at a time and is able to provide holiday packages at low costs as all the products and services are bought in bulk. The company has an operating income of more than £297 million and the products offered by it range from passenger transport, travel agency, accommodation etc. so that travel of customers can be made highly convenient and comfortable.  Tourism Information Board is the authority that operates the structure of tourism industry. TUI employs more than 70000 employees and operates in more than 100 nations. 

AITO: Association of Independent Tour Operators is a trade group which represents around 120 specialist and independent tour operators and its members operates in more than 170 countries. AITO agents provide specialist products to their customers tailor made as per their needs and budget so that their experience can be enhanced. The main focus of this group of independent and specialist travel agents is to promote choice and quality by giving customers a variety of choices of travel destinations and giving them special services with their knowledge, experience and expertise. Order assignment help from our experts! 

Evaluation of impact of integration

The scale and structure of specialist tour operators and large mass-market tour operators are governed by the tourism information board which determine the way in which they work ethically and legally. Specialist tour operators cater for niche market holidays and specialise in particular destinations or particular product. Mass market tour operators on the other hand cater to the needs of a group of people at a time so that a holiday package can be made at best prices giving the best quality of services. Integration of mass market and specialist tour operators can help in increasing the scope of tourism and also best quality of services can be provided to customers (Snyman, 2015). It can also help in expanding the tourism market in UK which will also help in economic development of the country with increased employment opportunities.

Different stages and components for creating package holiday

Creation of holiday package involves following steps so that customers can be given satisfactory services and products and high value can be created for them:

• Market research: Market research is done so that the requirement of tour package can be determined along with understanding the key elements associated with tourist destinations and markets. This stage help in analysing the requirement that are to be fulfilled by tour operator like tour for students, couples, pilgrimage etc. will have different requirements  (Allahyari, Salari and Vigo, 2015)

• Tour itinerary development: It includes the sequences of various activities during the trip from point of assembling to the point of departure so that a well planned tour can be designed. This itinerary will help customers in getting informed about the places they will visit and time required.

• Contracting suppliers: Negotiation of prices is done with many vendors depending on the nature and size of tour like airlines, lodging facilities, car rentals, hotel etc. This stage will determine the total cost of tour package which will be different depending on their requirements.

• Costing of tour package: It is the cost of all the individual ingredients involved in tour package after adding profit margins by company. This help in determining the total cost of tour package so that customers can purchase them based on their affordability.

• Brochure production: After finalising the cost of tour package brochures are formed that help in marketing the brochures to target customers. The brochure will help in making tour package look attractive so that sales can be increased.

• Marketing and sale: With the help of advertisements and other marketing strategies target customers are attracted to purchase tour packages so that sales can increase. This will help in attracting a large number of customers and increasing company profits.

• Critical path analysis: It involves identification of time for finishing all activities along with their dependencies on each other. This help in determining the time required to complete each of the stage so that best services are offered to customers. 

Forecasting change in customer demand

With the changing market conditions the needs and wants of customers change over the course of time. It is important that the needs and wants of customers are well traced so that a demand forecast can be done which will help in satisfying the needs of customers in an efficient manner. Forecasting can be done based on a close study of the past patterns of customers needs so that their future needs can be predicted. Following are factors which can change customer demands:

• Economic factors: These are the changing economic conditions of nations which also affect the purchasing power of customers which create an affect on the travel and tourism business. If the economic conditions are strong then people can afford to travel to various destinations which help in the growth of tour operator businesses. It also help in determining the cost of holiday package which the company must offer to its customers. The companies must monitor the economic conditions prevailing in the country so that profitable holiday packages can be designed (Bazargan, 2016).

• Social factors: These factors are related with the demographics of a country like age, sex, caste etc. which also determine their standard of living and affect their preference to spend their money on leisure and tourism activities. The increasing trend of travel and tourism can create a positive impact on the sales of tour operators as many people are spending on getting leisure and tourism activities. These trends must be closely followed by TUI so that the demand of tourism can be forecasted. Need Assignment Samples?Talk to our Experts!

The other ways in which customer demand can change depends on the following factors:

• Capacity and contracting: The ability of tour operator to manage contracts with suppliers so that best quality of services can be provided to customers based on their budget and requirement affects the demand of customer. Also the capacity of making arrangements for a group of travellers also affects the demand of customers for tour operators.

• Pricing: It is important that the tour packages are priced based on the quality of services, number of days for which tour is planned, number of people etc. so that they can be given with services which can help in enhancing the satisfaction and also building their trust in the company (Guo and He, 2012).

Holiday package for educational tour

Package name: Educational tour package

Target audience: Adult student market (over 18 age group)

Target places: Students from London, UK to Belgium

Number of students targeted: 50

Inclusions: Tour for 7 nights in Ghent at Van der Valk Hotel, Nazareth-Ghent

Price:

Marketing and sales: The marketing will be done by company on social media websites, in schools and colleges through brochures and through advertisements on TV and radio.

Review of a range of package tour programmes

Package tours are holidays which are a combination of variety of services that are offered during the tour to the customers like accommodation, transport, food and beverages etc. These package tours are a combination of all the components related with travel and tour so that complete holidays of customers can be well planned and organized. These tour packages are formed based on the requirements of the customers that are involved in tour and are tailor made so as to suite to the needs and requirements of customers (B. DiPietro, Cao and Partlow, 2013). TUI is a mass market tour operator which means that it makes holiday packages for a group of people at a time so that customers can be given quality products and services during their tour. Following are the ways in which TUI can focus on the same target market i.e. a group of students above 18 years of age and the package tour programme is for educational tour:

• Traditional brochures: A brochure is a printed document which is designed in such a way that it can help in attracting customers towards the information that is contained in the brochures. These are designed in such a way that they can be folded and kept in pocket sized folders. These are distributed by the company at various locations free of cost by the way of newspaper inserts, distributed manually at high traffic locations etc. so that a large number of people can be reached. A brochure contains summary of the information which can be written in an attractive style by highlighting the main content so that customers attention can be gained. TUI can use traditional brochures and distribute them manually outside colleges so that their target audience i.e. students above 18 years of age can be reached (Luis, Dolinskaya and Smilowitz, 2012).

• E-brochures: These are digital version of traditional brochures which can be made more attractive and can be circulated to a large number of target customers with the use of internet. These are more interactive and can be made more creative so as to seek the attention of target customers by the way of 3D printing and usage of multimedia. These brochures are more effective as they are both time and cost effective and can reach to a large number of prospects who can further be converted into actual customers. TUI can use e-brochures so as to attract students who are more involved in usage of internet and can be attracted easily towards the tour package programme of company regarding educational tour.

The above brochure is designed to attract students above 18 years of age by TUI by forming a tour package programme which will help in giving information to them about the activities that will be involved during tour. The above brochure is a 4 page leaflet which give detailed information top students so that they can know about the activities that will be done while tour, the places which will be visited along with the costing of tour to students. This brochure has a detailed content relating to the complete time that will be involved in completing the tour. This brochure is though expensive as it involves costing of paper and designing which can increase the advertising cost of company (Naji-Azimi and et. al., 2012). However, TUI can attract students to buy its holiday package as detailed information is included along with utilising the space of brochure in an attractive manner.

The above brochure is a 3-fold brochure which is circulated by Trailfinders which is a British travel company based in UK and Ireland. In its brochure most of the space is covered by images which wastes the space of brochure and also makes the brochure unnecessarily big. This brochure although is attractive and interactive by the use of images it can affect the quality of message that is to be delivered to students. The students might not take the package tour seriously which might affect the sales of company and will also waste the number of brochures created. However it contains almost all the information that are required by students it lacks the information about the cost that will be involved in complete tour. This might affect the decision-making of students. Also as the target market is students above 18 years of age the brochure must be made in a way that is more serious in nature. Get Management Dissertation Topics from our qualified experts!

Comparison and contrast of package tour programmes

It can be seen from the above tour packages that when they are created to attract a similar target market there are many similarities in the tour packages. As the above brochures are created so as to provide luxury holiday experience for students who are above 18 years of age. These brochures aim at providing tour to students so that their knowledge related to placers they will visit can be enhanced. Also the accommodation facilities and transportation that are included are of high quality so that luxurious experience of travel and tourism can be provided to the students. It can also be seen from the brochures that they target at students belonging to high income families who can afford luxurious educational tours so that their comfort and experience can be enhanced. These brochures also indicate that the companies which are organising these tours work on a large scale and have tour budget so that their customers can be provided with best quality of services and products (Moutinho, 2011).

However, there also exist many differences in the brochures of companies which target same group of customers i.e. students above 18 years of age. The brochures target on tour programmes which are suitable for educational tours so that their trip can be made knowledgeable. The brochures have many differences like:

• The brochure of TUI is more informative as it is 3-folded and all the leaves of brochure contains detailed information regarding the places that will be visited, cost of visiting each place, accommodation services etc. In case of other brochure of Travelfinders which is also 3 folded but out of the 3 leaves only 1 leaf is informative and the 2 others are full of images which is wasting the space of brochure.

• The brochure of TUI is more informative than attractive but in the case of Travelfinders the brochure is more attractive than informative.

• TUI circulates its brochure both in the form of traditional brochures which are physically distributed and also it circulates e-brochures which can help it in reaching to a large number of its target customers. Travelfinders only sell its brochures in the traditional form which can affect its sales ratio as compared to TUI.

• The brochure of TUI will help it in attracting a large number of customers due to the strong brand image of company ion organising mass tours which means that the brochures will help in gaining company objectives more quickly. In the case of  Travelfinders it will find it difficult to attract customers just based on its brochures which means that it will have to include other marketing practices so as to attract customers.

Evaluation of a range of package tour programmes

From the above comparison and contrast of two company's brochures which give details about the tour packages aiming at conducting an educational tour for students above 18 years of age it can be concluded that the package tour programme of TUI is more attractive than  Travelfinders. The brochures of TUI are more informative which give detailed information to students regarding the tour that they will become part of. This will help them in taking better decisions in purchasing the tour programme package.

TUI is a well known mass market tour operator which organises tour for a group of people at a time by purchasing components of travel and tourism from suppliers and combining them to form affordable tour packages. The brochure of TUI can attract a large number of students as the information that is contained in brochure gives detail about transportation, accommodation, car rentals etc. which will give luxurious experience to the students. This will help in achieving the trust of customers and increasing the sales of company by providing them with high quality of service (Cook, Hsu and Marqua, 2014).

Thus it can be said that apart from the attractiveness of brochure the content written in it also help in determining its usefulness in attracting customers. It is important that brochure is made in such a way that it can deliver a brief summary of the package tour and also attract the attention of customers by including essential information related to package.

Exploration of strategic and tactical decision-making in tour operations

Strategic decisions are made by companies by evaluating the environment in which company functions so that a competitive advantage can be gained in the market by changing the overall scope and direction of the company. These decisions are made to achieve long-term objectives of company so that it can survive sustainably in the market with changing market conditions and can optimise its profitability, sales, performance, customer satisfaction etc. Tactic decisions are made by company so as to achieve short-term objectives of company which will help it in dealing with momentary situations. These tactical decisions are made so that strategic goals of company can be achieved. Following are the strategic decisions that are made in tour operator company:

• Distribution decision: It is related with providing customer with services which can help in satisfying their demands by supplying them with goods and services on time during the tour so that high value can be created for customers. This can be done by managing efficiently the supply chain of company so that negotiation can be done with suppliers and prices can be negotiated so that services are provided to customers on time (Hoyos, Morales and Akhavan-Tabatabaei, 2015).

• Promotional strategy: It is related with promotion of travel and tourism package programmes which it has developed for customers so that various requirements of customers can be well satisfied. It involves many channels such as social media advertising, TV and radio, printed brochures etc. which can help in strengthening the brand image of company. Also it will help in attracting a large number of customers so that company sales can increase.

• Consumer relation: It is related with maintaining good and long-term relations with customers by providing them with services which can help in enhancing their experience. Also the company must keep in touch with customers so that offers and discounts on tours can be regularly conveyed to them (Robinso, Heitmann and Dieke, 2011).

• Pricing strategy: These are the decisions related to costing the tour package based on the number of suppliers involved along with the quality of services given to customers. The pricing of package must be done on reasonable basis so that high customer satisfaction can be achieved.

• Image of tour operator: Also it is important that company focus on building strong brand image by giving high quality of services to customers as brand image can help it in gaining a competitive advantage in the market and also attracting a large number of customers.

Tactical decisions on the other hand are the decisions which are made by company on a daily basis so that day-to-day operations and functions can be efficiently carried out. These decisions help company in dealing with situations like competition, price wars, fuel pricing, yield management, maximizing occupancy of contracted beds etc. Also they help in dealing with change in situations in an efficient manner so that change in market conditions cannot affect company in a negative manner. Following are the decisions made by TUI on a regular basis:

• Competition: In order to deal with competition in market tactical decisions that are made by TUI are improving their quality of services, discounting the prices, giving seasonal offers, extra facilities and services given to customers etc. These strategies help in dealing with competition in an efficient manner on a regular basis.

• Tactical marketing: These decisions relate to promotion of tour packages by TUI so that customer attraction can be gained which can help in increasing the sales of company. It also help in improving the brand image of company.

• Price wars: These decisions are related with reducing the price of tour products and holiday packages by improving the operations of company so that cost of company can be decreased which can help in lowering its prices. Tactical decisions can help the company in becoming price leader in the market so that customers can be attracted.

• Optimum utilisation of seats: These decisions are related with utilising the limited number of seats in transportation, accommodation etc. can be utilised in the most efficient manner. This involves taking timely decisions which can help in making bookings based on the number of customers who have availed for tour package.

• Yield management: These decisions are related with maximising the yield of company which is possible when the profits are more than investment involved. It also include efforts in maximising the usage of available resources in the most efficient manner so that profits can be maximised (Scherrer, Smith and Dowling, 2011).

Assessment of external factors affecting decisions

There are various external factors which affect the strategic and tactical decisions of company so that the decisions can be made in accordance with the effect they create on business. Following are some factors which affect company decisions:

• Political: These factors are related with political situation of a country which affect the decisions of company so that the rules and regulations of government can be followed. The political factors affect the tax system, trade tariffs etc. which affect business of company and decisions are made in such a way that fluctuation in these factors does not affect company. UK is politically stable country which means that the rules and regulations of country remain stable which help TUI in taking stable decisions so that company profits can increase.

• Natural and man-made disaster: These are the factors which affect decisions of company due to occurrence of natural or man-made disasters like landslides, earthquakes, road accidents etc. which affect the business of tour operator in a country. It is important that TUI make decisions which help in making profits even when there are occurrence of disasters where company is located like shifting of business from one location to the other.

• Currency fluctuation: These factors also affect decisions of company as the fluctuation in exchange rates can affect the international business of company and can make the tour packages expensive. This can affect company sales and so it is important that such decisions are made which help in taking advantage of fluctuating currency rates and maximising company profits like promotion of domestic tourism by company.

• Peak season: The seasons also affect customer demand to make tour to destinations so it is important that TUI make decisions which can help it in gaining a large number of customers in all the seasons. The tactical decisions are made in such a way that peak seasons can help in taking company sales to maximum.

Know more at: Operations Management of LCB Tours

Evaluation of strategic and tactical decisions made by TUI

TUI Group consistently pursue growth by managing all its business segments so that better decisions can be made and a strong brand image can be created in market. The company has an access to tourism value chain which makes its services high in quality. Also the company is present in almost all the destinations of world so that they can meet customer demands based on their needs and wants. The company is present in almost 100 countries so that it can achieve a competitive edge in the market by increasing its market size so that a strong brand image can be created.

It is however recommended that company focus more on promoting domestic tourism which will help in economic development of domestic area and also help in increasing employment opportunities in local market. This will help it in gaining high support domestically which is important so that government can help in providing further support for business expansion. 

Conclusion

From the above report it can be concluded that travel and tourism industry is increasing at a faster rate and also the importance of tour operator is increasing. Tour operators play an important in tailoring tour packages as per the requirements of customers so that high customer satisfaction can be achieved. There are various stages that are involved in creating a package holiday so that tour of customers can be made comfortable and also they can be provided with various information related to tour package.

It also help in forecasting the demand of customers in the future. There are various ways which customers are attracted towards buying tour package like brochures, advertisements etc. The success of tour operator depend on strategic and tactical decisions of company so that changing market situations so not negatively affect company profits and brand image.

Also Read- 

• Management and Operations
• Travel and Tourism HND Business Level 5

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