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An understanding of tour operations management

University: Brunel University London

  • Unit No: 18
  • Level: High school
  • Pages: 15 / Words 3736
  • Paper Type: Assignment
  • Course Code: N/A
  • Downloads: 245
Question :

Some of the questions in the assessment are as follows:

  • What is Operation Management ?
  • What is Brochure Production.
  • Discuss Comparison of tour packages of 2 tour operators.
Answer :
Organization Selected : TUI

INTRODUCTION

Tour operations industry is identified as the fastest growing sector worldwide which evolving at constant basis. Growth of this industry is not only contributing in the development of this industry but at the same time it is placing its own level of contribution in the economic development of the nation (Allahyari, Salari and Vigo, 2015). Tour operators are further determined as the essential part of the tourism sector which are developing range of facilities for traveller in terms of tour packages. These efforts placed by tour operators directly contribute in the development of the industry in rapid manner. The present report is based on TUI UK, a multinational travel company which is headquartered in Hannover, Germany. The respective company was incorporated in the year 1923 and have developed strong image worldwide as it is offering range of services like scheduling airlines service for travellers, developing effective holiday packages, hotels, resorts and cruise lines.

This is report is bifurcated in 4 sections. The first part provides detailed explanation on role, structure, entity, functions and types of tour operating industry. It further explores various development stages of holiday packages. Along with this, it further assesses various tour programmes that contribute in meeting need and requirements of target markets. In the last section, examination of strategically and tactical decisions are evaluated by several tour operators.

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Assistant product development manager of TUI have developed an article which contains information associated with tour operating sector. This article will be further provided to new apprenticeships so that they can develop their understanding over the industry and also contributes in its future development. Ranges of information covered in this article are stated as below:

Exploration of the different roles and functions of a range of tour operators

Explanation of the scale and the structure of the tour operating industry

Evaluation of the impacts of integration on the scale and structure of large mass-market and independent specialist tour operations

There are different types of tour operators who serve this industry in effective manner. Main type of tour operators are independent, domestic, incoming, outbound mass-market, specialist etc. All of these kinds of our operators have their different roles as well as function (Buckley, 2014.). Some main among them are explained as below:

Outbound mass market: These kinds of tour operators are the one who dominates outbound market from many years. Tour operators belonging to this range mainly sold similar kind of tour packages worldwide. These packages are mainly offered at larger scale of market worldwide. The main role of these types of tour operators is to develop package in such a manner that could satisfy customers belonging to mass market. In order to perform this in rightful manner, Tour operator’s males’ use of strong marketing tactics and develops new packages for customers in order increase its sales performance.

Domestic: These types of tour operators are the one who provides tourism related services to the tourist within their native country. In this, the main role of tour operator is to serve tourist with best services within the home country. The main function of these tour operators is to plan tour, make package, provide travel information to clients, perform reservation associated activities etc.

Specialist: These tour operators are the one who serves tourism sector within the special zone only. These operators develop packages for different zone like family holidays, special wildlife, cross country skiing, safaris etc. The common role of Specialist tour operators is to determine specialised zone of its potential customers (Chand and Dahiya, 2014). In this regard, essential function associated with the same is to develop to plan of package and then execute reservation associated activities for enhancing sales.

Independent tour operators: In this, independent tour operators develop travel packages for tourists at their own level. This simply includes tourism services like accommodation, itinerary, transport and other associated services belonging to holiday package. The main functional role of independent tour operators is to formulate tourism package for customers which includes all of the associated service to the same.

Structure of travel and tourism sector mainly includes information associated with different components, functions and aspect of respective industry. In order to develop understanding over it, it is essential to develop knowledge on every associated aspect that initiates from supplier to customer (Cetin and Yarcan 2017). Travel and tourism sector of UK is mainly divided into three sections which are public, private and voluntary. It is essential for the travel and tourism sector to develop their understanding over the needs and requirement of its customers so that they can serve them in the same manner. In order to execute services to customers, tour operator belonging to this sector follows strong chain of distribution according to which they can easily deliver their services to the end user in rightful manner. The chain of distribution of tourism industry is has five main components that is Hotels, transport companies, tour operators, travel agencies and at last customers. This chain of distribution is adopted by every associated company as per their core requirement and feasibility (Chon and Yu, 2012).

There are mainly two main types of integration within tourism industry. These are vertical and horizontal integration. This integration directly places influence over the customer choices and also places impact over the decision making made by them while buying product or services from this industry (Chand, and Katou, 2012). Vertical integration simply means that products and services of belonging to tourism industry are available for the customers belonging to different businesses as distribution chain of respective industry is very strong. This simply allows tour operators in developing their strong relationship with the customers. On the contrary, main focus of horizontal type of integration is to serve customers in lucrative manner by providing them additional services (Deresky, 2017). This ultimately supports company in developing its strong image in front of customers. Both the kind of integration simply provides support to the industry tour operators in developing their relationship with the customers.

(i) Produce a ‘step-by-step’ guide on ‘How to create a package holiday’ to be used by a trainee in the product development department of a tour operator as part of their induction programme.

Planning is considered to be an essential as well as inseparable element of tourism industry as it lays down the foundation upon which the working of variety of tour operators is based. In this regard, it is identified that it is important for tour operators to develop package holidays so as to gain the attention of large number of individuals. Planning is essential to be executed in relation to every stage of holiday package development (Dhiman, 2012). As per the present scenario, TUI is organising a holiday package for an escorted luxury coach and educational tour for a total of 50 students for 7 nights within the confines of Ghent. This holiday package would occur from United Kingdom to Belgium encompassing places such as Ghent, Brugge, Ostend, Antwerp, and Brussels. It would take place in the summer of 2022. Thus, the stages for the development of this package plan are described in detailed manner as follows:-

Market research and forecast: This stage is concerned with execution of forecast regarding the constant changes taking place in the patterns of consumer demands. In this relation, while devising the holiday package for summer trip of 2022, the tour operator within TUI would take into use a wide range of research methodologies. Further, the firm would be capitalising upon the variety of sources and their interpretation to gain knowledge about the strategies adopted by rivals. As a result of this, TUI devises an effectual strategic marketing plan.

Capacity and contracting: This stage is concerned with the procedure of entering into contracts with vendors for the purpose of transportation, ancillary facilities, and accommodation and so on. The students would be staying for a time period of 7 nights, thus it is quite essential for TUI to enter into such contracts so that the trip aids the travellers in gaining satisfaction.

Costing the holiday: This is associated with ascertainment of cost of the overall holiday. A tour operator takes into account several aspects while determining the cost of developing a holiday package (Filby, Stockin and Scarpaci, 2015). In this regard, TUI would take into account factors such as load factor, transportation seat costs, accommodation cost, transfer costs, fixed and variable cost, mark up, profit margin, distribution cost, agency commission and many more. The entity aims to keep the cost of package low.

Pricing: The pricing strategy for holiday package is concerned with selection of one of the available options such as seasonal flexing, competitive pricing, skimming, special offers and discounting strategies. In this regard, TUI has decided to make use of competitive pricing strategy in order to stay aligned with the market and rivals operating within its confines.

Brochure Production: The next phase in the holiday package development timeline is related to creation of an attractive and appealing package that would gain the attention of audience towards it. In this regard, TUI would be making use of 3D Print Brochure for the students so that they can be positively influenced by it.

Marketing and Sales: This being the second last stage of the holiday package development is concerned with the usage of wide range of channels through which marketing and sale of packages created by company can take place (Gibson, 2012). In this regard, TUI would be making use of online and offline brochures as well as website for marketing purposes.Worried for Operations Management Assignment Help? Get our experts Help Now!

Critical Path Analysis: This stage is related to execution of a mathematical process which is aimed at calculation of schedule of a project. Initially, it ascertains the extent to which an action can be executed in the earliest possible manner, i.e., its early start and finish dates. Along with this, project finish can also be determined. With this, the slack or float of an activity can be calculated by TUI.

(ii) Produce a ‘step-by-step’ guide on ‘How to cost a package holiday’. The calculation of a holiday price should be based upon the luxury coach and educational tour for summer 2022 at one hotel under contract.

Holiday price can be defined as the price which is arrived at after taking into consideration the profit margin. The cost of holiday for 50 students for 7 night tour in Ghent is ascertained as follows:-

Accommodation cost is 130 Euros per person.

Total Accommodation Cost (in £) = 130/1.12*1*50 = £5803.57

Facility

Price (in £)

Accommodation Cost

5803.57

Cost of Luxury Coach

7600

Charges of visitor attraction (55/1.12*1*50)

2291.67

Tour Guide Charges (960/1.12*1)

857.14

Total cost

16552.38

Add: Profit margin @25%

4138.095

Selling Price

20690.475

The selling price of the overall holiday package is ascertained to be £20690.475 and per person price is £413.8095.

Comparison of tour packages of 2 tour operators

Tour package is regarded to be the most appealing part of the travel and tourism sector as this is what sets the base for organisations to appeal to the customers. With the help of lucrative and attractive tour packages and brochures, tour operators are able to gain the attention of large number of travel persons (Guo and He, 2012). In this regard, it is important for tour operators to take into account theirs as well as competitive tour packages as well as brochures in order to ascertain the shortcomings and scope of improvement. Thus, looking upon this, the management of TUI has considered to execute a comparison of the holiday tour packages of their company along with one of the local market tour operator name Cosmos Holidays. In relation to this, it has been determined that the location that has been selected to set comparison and contrast of tour packages is Greece. Therefore, the contrast and comparison lying between the tour packages of TUI and Cosmos Holidays for a common location (Greece) is given beneath:-

Cosmos Holidays

 

TUI

 

This organisation provides customers with 2 options, either to book only the travel tour or to book tour with flights and transfers.

This organisation provides customers with only 1 option that is to book the tour with flights and transfers.

Their tour packages for Greece start from 1899 pounds per person for tour only and 2169 pounds per person for tour along with flights and transfers.

The pricing of their tour packages for Greece start from 208 pounds per person.

The locations that are included within the package of Cosmos are Istanbul, Athens-Piraeus, Canakkale¸ Volos, Heraklion, Santorini–Mykonos and many more.

The locations that are a part of this tour package are acknowledged to be Santorini, Mykonos and Skiathos, Halkidiki, Kalamata or Parga and many more.

The company provides the option of incorporating changes within the package as per the preferences of customers.

This company also provides the option of customisation within the tour packages so that the needs, wants and demands of customers can be effectively satisfied in due course of time (Holland and Leslie, 2017).

An exploration of examples of strategic and tactical decision-making in tour operations

Tour operators mainly take two types of decisions that is tactical and strategic decision. Strategic decision are mainly determined as those ones which simply depicts how tour operators positions themselves at market place differentiate themselves with other tour operators. Few main examples of strategic decisions is offering quality products at moderate prices in order to attain competitive edge (Jaafar and Maideen, 2012). Another example for the same is involving into CSR activities for developing positive image of the company in front of society. This will directly help them out tin attracting maximum number of customers towards them. On the other hand, tactical decisions are mainly defined as those one which are taken by tour operators by observing market or external scenario. The main motive of this kind of scenario is to provide response to external market situation and convert the situation in the favour of the respective firm.

Practical examples of both kind of decisions taken by tour operator of TUI and Cosmos are stated as below:

Type of decisions

TUI

Cosmos

Strategic decisions

Tour operators of this company believe in taking strategic decisions associated with the pricing strategies. The respective tour operator do not prefers to provide additional discounts to any of its customers in terms of references or any other (Khairat and Maher, 2017). The overall discount provided to the customers is common and equal for all.

Tour operator of this company believes in taking strategic decisions related to the product choices. In this, every new product is developed with the motive of fulfilling needs and requirements of its customers in appropriate manner. Also, they believes in making use of direct selling as its core strategy in order to approach its targeted audience.

Tactical decisions

Tour operator of TUI includes surcharge pricing strategy as its main pricing strategy. This has been chosen by the tour operator by analysing market responses. Incorporation of this strategy directly provides support to the respective tourism company in inflating its sales performance as well as profitability at marketplace.

On the other hand, tour operator of Cosmos prefers to use online marketing, e-booking, brochures etc. as its marketing strategy undertaken by them with tactical decision. This is so because, tour operator has personally analysed that its competitor firms are using this medium of promotion for approaching targeted customers and they are getting effective responses from their side (Naji-Azimi and et. al., 2012). This have directly influenced tour operator of Cosmos to adopt this strategy for remaining competitive within the same marketplace.

An assessment of external factors that adversely affect strategic and tactical decisions and recommend responses

External factors are mainly determined as those one which are available outside the firm but still has their influence over businesses as well as activities. Some of the main external factor that could place impact over strategic and tactical decisions taken by tour operator of TUI UK are stated as below:

Currency fluctuation: It can be said that if any kind of change takes place in the currency rate then tour of TUI UK have to mould their strategic as well as tactical decisions in order to deal with the situation. Also, here main motive of tour operator is to develop best package that could effectively serve customers in the same manner with minimal fluctuation in its pricing (Ronen, Pliskin and Pass, 2012). In order to handle this in appropriate manner tour operator must take advice from good finance manager who can develop strong budget for them. This would directly help them out in managing their finance effectively.

Terrorism: Even though security structure of UK is very strong but if any sort of terrorism activity takes place in UK then it might place influence over decision of TUI. This is so because terrorist activity might create fear among tourist and they might not visit the places which have been earlier attacked by terrorist. In order to deal with this, tour operator of TUI must initiate social awareness campaign non which they should clearly show how effectively government of UK and the respective company is making use of advance security system in order to serve customers in better manner.Take Assignment Samples Now!

A critical evaluation of recent strategic and tactical decisions made by tour operators making valid recommendations for improvements.

On the basis of above specified information, it can be said that tour operator of TUI effectively makes range of decisions. These decisions are generally taken according to market situation and changing preferences of the customers towards the industry. Recently, strategic decision taken by tour operator is to offer equivalent discount to each of its customers in order to maintain equality among them (Shyju and Lama, 2015). This decision has placed both the positive and negative impact over the TUI performance. The positive influence associate was that customers got attracted towards the tourism services as they feels that this promotes equality and value each of its customers. Along with this, it can be further said that the negative experience associated with the same is that the some of regular customers expects additional discounts and special offers from companies’ side. This directly de-motivates them and also influences their interest towards the other tourism company who offers additional discounts to them with similar kind of services (Su and et. al., 2014). Thus, in order to deal with this, it is important for tour operator to revise their holiday packages and formulate list of discounts towards the customers on the basis relationship with the company from the past to present. They can also develop some new packages for the loyal customers of company in order to retain them towards the firm for longer period of time.

CONCLUSION

From the above specified report, it is comprehended that tourism sector is growing at constant basis whose growth is ultimately providing support to the nation’s economy too. Along with this, it has been analysed that there range of stages which are mainly followed by the tour operators at the time of developing new product or holiday packages for its respective customers. Also, it has been further analysed that tour operators also makes use of different distribution methods like social media, press, brochures etc. in order to enhance awareness of its customers about their respective offering and new launches. Moreover, it has also been seen that tour operators have to various decisions in their profession no matter they work for which company. These decisions can be easily bifurcated into two sections that is tactical decision making and strategic decisions making. Both kinds of decisions are generally taken on the basis of market responses, competition within the industry, changing expectation of customers towards the services which are used by them during their travel etc.

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