Tour Operator AssignmentWhat is the Tour Operators Industry?Defining the tour operator is a far from easy process because their role, activities and form havechanged dramatically from the early days when Thomas cook first organized a package trip by rail in the1840’s. One useful approach is to identify what a tour operator does as a means of establishing theircharacteristics and form. In simple term a tour operators will organize, package together differentelements of the tourism experience and offer a package, also known as an inclusive tour, it will normallyhave to include at least two elements that are offered for sale at the inclusive sale price, and will involvea stay of move that 24 hours in overnight accommodation.These elements normally include transport, accommodation,foods, and other tourist services. The typeand range of packages sold by the tourism industry can normally be divided into two types: those usingthe traditional charter flight and those using scheduled flight, where it is uneconomic for the touroperator to purchase charter flights.The types of packages are often segmented according to:-Mode of travel, such as ferry or coach holiday (typified in the UK by shearing) it may also be based ontwin transport packages such as fly –drive, which are very popular with inbound tourists in the USA.Mode of accommodation, where hotel chains become tour operators by packaging their surplus capacityto offer weekends or short breaks in business –oriented hotels, selling, rail or air transport and visits toattractions as in all inclusive package. • Whether they are international or domestic package • Lengths of holidays • Distance, where the market in divided into short-haul and long-haul, over 90% of UK outboundpackages are short- haul. • Destination typeThese tours may be organized by small in depend tour operators, who specialize in certain segments (forexample: youth operators, such as PGL in the UK) larger operators such as TUI, which have trans-
European; or global operation such as my travel group. in addition, there are over 300 tour operatorswho organize the itineraries, activities and 8logistics of inbound visitors to countries such as UK and whoare represented by their trade organization – the British Incoming Tour Operators Association (BITOA).Tour operators have the ability to purchase services and elements of the tourism experience from otherprincipals or suppliers at significant discounts by buying in bulk. They fulfill a major role in the tourismsector. As they allow the different tourism sector to sell their capacity in advance – often a long time inadvance as contracts are drawn up a yrs prior to tourists using accommodation or services.Tour operators have traditionally been the “builder” of holidays. Quite simply the tour operator buys thecomponents of a holidays – flights, accommodation and transfer – and puts them together as packageso a typical package holidays, such as tow weeks at Mediterranean resort with full-board and transferwould consists of a flight, accommodation, meals and airport transfers. Because these components canbe bought in bulk , the tour operators can usually provide the holiday cheaper than if the customersbought and arranged each component of the holidays separately. The tour operators are often referredto as a wholesaler of holidays, selling products through retailers, who is the travel agents. The suppliersof transports, accommodation and other components of the holidays are referred to as principals.As the UK tourism industry developed through the second half of the twentieth century. Tour operatorsbecome successful in providing an ever-increasing range of package holidays to leisure tourists. Theywere able to produce brochure showing destination and accommodation options, with prices for theholiday’s shown customers would go their high street travel agent to collect brochures from differentoperators featuring the holiday’s area they wanted to visit. When a choice had been made the touristsreturned to the travel agent to make a booking. The travel agent would receive payment form the touroperator, called a commission in return for making the booking and recommending the holidays.Although this relationship between travel agents and tour operators still exists today, a great deal haschanged in the last ten yrs as more and more tourists are able to contact both the tour operators andprincipals directly using the internet. At the same time, the major holiday companions have changed theway they operate and are able to sell more of their holidays directly to the publics without using travelagents. Some tour operators have become travel agent as well. Types of tour operator
With in UK, there are some 600 organization working as tour operators. These can be grouped into oneof the following categories. • Mass –market tour operators • Specialist tour operators • Domestic tour operators • In-bound tour operators Mass market tour operatorsThese operators specialize in selling high volumes of holidays, mainly to traditional short-haul coastaldestinations. However, in recent years more package holiday to long- haul destinations have been soldthrough mass market operators. These companies include some of the most familiar names in the travelindustry including Thomson (tui), my travel, Thomas cook and First Choice holidays.These so-called ‘big four’ provided holiday and flights for nearly 12 million people in 2005. However thecompanies have been finding it increasingly difficult to sell package holidays as more people find it moreconvenient to make the independent arrangements through making use of the internet. In the secondhalf of 2007 mergers between Thomas cook and My Travel, and Thomson with first choice holiday, tookplace. Form now on, the ‘big two’ – TUI UK/ Thomson and Thomas Cook will be better placed tocompete with other travel organizations mass market tour operators may employ “reps” who are basedin larger hotels in popular resorts to provide support to their customers.Specialist OperatorsAs their name suggests, specialist tour operators specialize in particular types of holiday, rather thanproviding mass-market products. Very often a specialist tour operator will provide holidays to a specificcountry or offer adventure tours to a region such as the Amazon or South East Asia. The company will beable to provide in –depth knowledge about the area in which they operate, unlike the mass-marketoperators. These specialist companies are becoming more popular as customers look for a moreindividual type of experience rather than a mass market product.Domestic tour operatorsDomestic tour operators provide package holidays which take place within UK. One of the leadingproviders is WA Shearing ( a meager between two coach holiday companies , Wallace Arnold and
sheerings). This type of holiday is more favored by older holiday maker who enjoy the companion ship ofthe coach journey to regions of the UK they may not have visited before.Inbound Tour OperatorsIt should be remembered that in global terms, the UK is an important tourism market many people livingin countries throughout the world hope to be able to visit the UK at some point in their life. Each day,travel agents in different countries sell package tour holidays to the UK.Independent travelers also book flights and accommodation to allow them to visit this country. A largeno. of these tour are based on the Heritage, Gardens and Castles found throughout the UK while Londonremains one of the prime destinations for inbound holiday market from around the world.Market researchAccommodation and other costs to be met overseas will be the outcome of exchange rates againststerling, and operators must consider these vis-à-vis other competitive countries’ currency values whenconsidering how many clients they can anticipate traveling to any one destination. Operators also haveto take into account such qualitative issues as the political stability of the destination, the support givento developing tourism to the destination, the support given to developing tourism to the destination bythe carriers, or tourist office, of the country, and the relationship between the host and destinationcountries. Increasingly, the effect upon the environment of such new development must be considered,and how this can effectively manage by the operators, the hotels they work with and the localauthorities.Once the tour operators have narrowed the choice to two or three potential destinations, they mustproduce a realistic appraisal of the likely demand to these destinations, based on factors such as thenumber of tourists the destinations presently attract, growth rates over recent years, and presentshares held by competing companies. The mass- market operators are unlikely to be looking at a singleyears programmed-any commitment to a destination is likely to be for a substantial period of time,unlike the specialist operators, which may be more flexible in switching destinations according tochanging demand. Mass market operators will be considering long-term contracts with their hoteliersabroad, or even establishing their own hotels.#Task 3 : Review the role of brochures and methods of distribution used to sell package HolidaysTraditionally the printed holiday brochure has been the tour operator’s most powerful marketing tool,since the intangible nature of tourism makes it imperative that the potential customer can read about
what they may want to purchase. This has been accompanied by online brochures, websites and virtualtours of destinations, making the places accessible to potential visitors. It is not uncommon for up to 50% of tour operator’s marketing budgets to be spent on brochure production although web basedmaterials have now become a key elements of investment. This has to be viewed in the wider context ofplanning, organizing and implementing a tour programmed. The tour operator has to undertake a seriesof stages of work including: • Research planning • Negotiation with suppliers • Administration • MarketingWith the exception of the initial research stage, the holiday brochure is an integral part of the planningand marketing process.Front cover Spine Introduction Resort pages Term & conditions Contract forms Rear cover LogoKey information to attract interest Introduction to company and outline of destination Illustration ofeach destination attraction and details of each hotel Illustration of company and other brochuresBranding Quality statement Prices and departure grids Imagery to attract intended clients Imagesindicated type of holidays or destination featured.The printed holidays brochure currently in vogues among tour operators has evolved form its moderns-day predecessor, introduced in 1953 by Thomas cook, it adopted a similar format to that of women’smagazines reflecting the important roles has gradually changed to its present one of holiday catalogue.Holiday brochures distributed through travel agents seek to achieve a number of objectives.To obtain salesTo provide information to assist in decisions- making by purchasing in relation to the destination,product offering bringing, prices and ancillary services.
To afford cost effective distribution for the tour operators, by having an attraction cover, beingpermanently racked in travel agents and generating business among agents.To provide on effective tool to allow agents to sell holiday with detailed products/ booking codes.To allow a contract to be agreed between the tour operators and customers, providing information’sand procedure for changing the booking, complaints , refunds , the details of the products purchased,the clients detailed and the insurances premium paid.In the case of direct mail, the brochure seeks to fill some of the objectives about, but places moreemphasis on the customers to decided on the product offering. It also seeks to appeal to the marketsegment it is targeted at and needs to be easy to use.A brochure will typically comprise the elements embodied and involve a complex process of designincludingIdentifying the market audience and productUtilizing an appropriate company brand.Designing a mock-up, using the computer, with illustration and professional photographs of the hotels,destination, products offering and services.Using a desktop publishing system that will help with brochure layout and designProducing a proof, this is checked so that inaccuracies can be identified and rectified prior to printing.With increasing consumer regulation is most countries holiday brochures must get potential tourist tobook a holiday advertising dreams or images of their ideal holiday but must also be honest, truthful andaccurate. Above all they must not make false statements that can be prosecuted in many countriesunder trade descriptions legislation.Task -4 :Examine strategic and tactical decision making for tour operators
A number of pricing strategies are commonly used by tour operators.Fluid pricingDiscounting pricingSeasonal pricingCompletive pricingPromotional pricingFluid pricingThe brochure is issued a long time before the season and is printed with prices. The prices at this stagemay not be a true reflection of the price that the customer will ultimately pay. Operators may prices ifcosts increase, or if there is a surge in demand. Also many tour operators may use the same hotel butarrive at different prices for the package.Discounting pricingPrices may be discounted if holidays remain unsold. By fixing contracts and therefore prices a long timeahead of the season, tour operators purchase their supplies at the cheapest prices. In order to ensurethat holidays are not left unsold and that cash flow is good, tour operators must encourage earlybooking. When early booking are high, the tour operators knows whether there will be any excesscapacity in holidays- hopefully none and takes a substantial deposit per person. Tour operators are ableto use or invest this money as they do not need to pay their suppliers until the holidays are takenSeasonal pricingTour operators divide the year into different seasons. First, there is a broad division into winter andsummer season. In summer there are more beach holidays, and in entire ski programmes are running. Asummer brochure will typically cover the period May to November, and a winter one will run fromNovember to April. Within these periods there are peak seasons, shoulders seasons and off-peakseasons.Tour operators vary their capacity during the season but must fill the planes they have contracted. Thiscan result in discounted prices at shoulder season. At peak season- the school holiday period of July and
August in summer, and the Christmas holidays in winter –demand and therefore prices are at theirhighest. Tour operators have been heavily criticized for charging their highest prices in school holidaytimes, but they to make their profit when they can.Competitive pricingMass market operators are very keen to remain competitive on price; they will often match pricesoffered by the competition. Sometimes more up market operators will do this as well as, so it is worthcustomers asking them.Promotional pricingTour operators have tried various promotions linked to price over recent years, including a two –for-oneoffer. This was not very successful as many customers believed that the original prices had been raisedto cover the offer, early booking promotions with price discounts are more credible.DistributingTour operators must determine how best to distribute their products and services in order to maximizesales. Traditionally, distribution is via travel agents who stock tour operators’ brochures and sell on theirbehalf on commission. Although this method is still common, it is now used in conjunction with internetdistribution where customers can find information and even book via the tour operators’ own websitesor via a travel agent’s website. When products and services are sold via the tour operators’ website orby telephone, this is known as direct sell. Some tour operators, for example Portland, only use directmethods. Most tour operators use a combination of distribution methods.PromotionPromotion is the work of marketing personnel. The nature of promotion depends on the budgetavailable, and ranges from television advertising campaigns to press releases about new products anddestinations. Promotions may be aimed at the final consumer or to the trade. Trade promotion can bejust an important as consumer promotion as travel professional can bring preferred products to theattention of their customers. For examples of trade promotions include educational trips for agents toresorts, competitions and sales incentives.
Late salesTour operators do their best avoid late sales and encourage customers to book holidays in advance. Thisgive the tour operator the benefits of adjusting contracts to meet demand, making a better margin onsales and enjoying good cash flow. Late sales harm cash flow and are usually discounted so less profit ismade.
IntroductionThe assignment on tour operations sector is aimed at for investigating and researching on imaginary orreal tour operator. This will enhance learning skills by understanding what is learned in the class andwhat is available in the market. The assignments is based on scenario where employment is as touroperator and development of strategic plan is required for selling holidays in Dubai during summer. Theoutline and objectives of tour operator assignment is mentioned below:,Things activity is intended to explore the tour operator imaginary or real investigation work. You learnedin the understanding of the market in order to increase the efficiency and learning in this class. Strategicplanning for the holidays are based on the tasks that you must show and tour operators services,summer in Dubai. Are consistent with the goals and an overview of the following tour operators:• Describing tour operation sector with practical examples.• Generating imaginary tour operator known as emirates international holidays.• Determining number of staff, passengers and destinations.• Providing brief information about suppliers, partners and products.• Analysing effects of current and recent trends and developments.• Detailing the channels, yield management, portfolio and travel documents.• Reaching conclusion after completion of assignment.What is the Tour Operators Industry?The Tour Operators industry arranges, assembles and conducts tours in the UK and in other countriesaround the world. These tours can be sold directly by the operators or via travel agencies. Tours caninclude a combination of transportation, accommodation, food and visits to events or locations.Industry ProductsPre-paid tours by UK residents to RoWPre-paid tours by UK residents to EuropePre-paid UK tours tooverseas visitorsDay trips and short tours via direct paymentOther tours and tour services
Industry ActivitiesTaking bookingsDevising and assembling tour packagesConducting toursOther customer serviceTour Operators in the UK: Market Research ReportThe Tour Operators market research report provides key industry analysis and industry statistics,measures market size, analyses current and future industry trends and shows market share for theindustry’s largest companies. IBIS World publishes the largest collection of industry reports so you cansee an industry’s supply chain, economic drivers and key buyers and markets.Industry Analysis & Industry TrendsThe past few years have been challenging for the Tour Operators industry, which faced difficulties fromthe global financial crisis and falls in international tourist arrivals, UK tourist departures and domesticconsumer confidence. With significant economic uncertainty, fewer UK residents booked tours overseas,while the number of foreign tourists booking UK tours also fell. A key threat to the industry is theincreasing tendency for people to plan, organise and book their travels using the internet, therebybypassing traditional tour operators and denying those sales.Overall, UK tour operators have experienced a tough five years through 2012-13, as global economicpressures and increased employment uncertainty contributed to greater industry volatility. Also, theincreasing prevalence of internet usage has allowed more adventurous customers to assemble their owntour packages independently of large operators, while the financial crisis that engulfed the developedworld removed a lot of organic growth.Over the past five years, industry revenue is estimated to have fallen by an average of 1.3% per year,totalling £13 billion in 2012-13.Emirates International HolidaysEmirates International Holidays (EIH) is a separate and individual entity and it is not linked with anytravel agency or airline. The establishment was in 2007. The tour operators in EIH are responsible fortour packages and they have target to meet. The target is the number of passengers using EIH’s holidaypackages. The tour destination selected is Dubai due to various trends that are taking place duringsummer. The team working will be assigned each emirate / destination but our focus is Dubai. Themanagement of EIH is in full support of team members by motivating and training them with a huge
database of information so the employees will not have to waste time. The process will include determining destination and package type, analysing suppliers and their prices, determining product type,setting package price with profit margin and targeting right passengers and tourists for the purpose ofselling holiday packages (Zee Gilmore, 2008).Dubai is tourist destination and there are several optionswhich makes it easier for selling holiday packages. The focus and establishment is Dubai due to successof many tour operators in Dubai. There are summer packages and suppliers are cooperative fordesigning and opposing in the market (Tourism in Dubai, 2008).2: Description on Tour Operation Sector:The operation of Emirates International Holidays (EIH) is local and international of the travel and tourismindustry in Dubai / UAE. There are different types of products which is designed and marketed forpassengers and tourists. The holiday packages are not fixed and it is customized according to the tasteand preferences of passengers and tourists in Dubai. EIH will be buying group of components for holidaypackages from different and suitable suppliers in Dubai / international destinations which will includevariety of products and services. This will be for passengers just reached Dubai or tourists alreadyavailable in Dubai. The holiday package that is to be sold is Dubai with entertainment and leisurefor “Happy Summer Vacation” (Zee Gilmore, 2008).Employees, Passengers and DestinationsThere are around 20 employments in different departments of Emirates International Holidays (EIH).Depending upon destination and product package type an employee will be handling it. There will be nomore than one employee in one holiday package but if the client happens to inquire about differentpackage from same employee then he / she can handle it.Description on Tour Operation SectorThe operation of Emirates International Holidays (EIH) is local and international of the travel and tourismindustry in Dubai / UAE. There are different types of products which is designed and marketed forpassengers and tourists. The holiday packages are not fixed and it is customized according to the tasteand preferences of passengers and tourists in Dubai. EIH will be buying group of components for holidaypackages from different and suitable suppliers in Dubai / international destinations which will includevariety of products and services. This will be for passengers just reached Dubai or tourists alreadyavailable in Dubai. The holiday package that is to be sold is Dubai with entertainment and leisurefor “Happy Summer Vacation” (Zee Gilmore, 2008).Employees, Passengers and DestinationsThere are around 20 employments in different departments of Emirates International Holidays (EIH).Depending upon destination and product package type an employee will be handling it. There will be nomore than one employee in one holiday package but if the client happens to inquire about differentpackage from same employee then he / she can handle it.
The Emirates International Holidays (EIH) types of products in “Happy Summer Vacation” areentertainment, leisure, health, sports, culture and heritage and amusement which are aimed to targetfamily, friends, etc. These are the famous products that the tourists in Dubai are mostly enjoying whichis determined depending upon last year feedback. Due to hot weather beach and sand entertainmentproducts are not demanded during summer (Zee Gilmore, 2008)Effects of Current and Recent Trends and DevelopmentsThe Emirates International Holidays (EIH) distribution of the current trends is attractive when packed inholidays and recent trends provide advantages. There are tremendous developments in Dubai due tomany projects that are launched (Tourism in Dubai, 2008). The reason is that Dubai is a touristdestination. There are also various programs launched by Department of Tourism and CommerceMarketing periodically (Dubai Department of Tourism and Commerce Marketing, 2008).Channels, Yield Management, Portfolio and Travel DocumentsThe distribution channels of Emirates International Holidays (EIH) are through suppliers and reservationonce the passenger and tourists confirms holiday package with payment. The channels are local andinternational.The yield management is implemented at EIH, it is flexible and tour operators do not sell their holidaypackages through brochure prices. Usually, the prices are not listed in brochures. When there is anenquiry tentative prices are proposed and once the package is finalized and confirmed by passengersand tourists the prices are also finalized. The reason is that 60-70% passengers and tourists will bepositives taking business as per brochure and proposed prices. There are discounts and flexible pricesare expected which is part of the negotiation process (Larry Dwyer, Peter Forsyth, 2008).The productportfolio of EIH is increasing and changing to meet the changing environment and holiday packages thatare focused and wanted. There are ranges of products and sometimes they are mixed such as whenentertainment and leisure is included then there might be a mix of education and sports. The processincludes maintaining copy of travel documents which as essential and also during registration andpayment all documents are checked. This is to avoid legal complications and issues due to invalid traveldocuments. During the holiday tour, the passengers or tourists are informed to carry their originaldocuments and these are checked on Cathy are present and ready for the tour. This is part of EIH policyand procedure (John S warbrooke and Susan Horner, 2006)ConclusionThe tour operators in any business or organization are expected to sell customized holiday packages andflexible pricing strategies. This will ensure 100% selling of holiday package designed and marketed. Thetour operations is more like designing, marketing, negotiating and selling which brings positive impactsin Dubai. The holiday package by Emirates International Holidays known as Happy Summer Vacation isthe major selling in Dubai during summer. The number of passengers and destinations are essential for
attracting various types of clients to the business. Furthermore, by having multiple suppliers andpartners will ensure competitive price and package and they are flexible due to various trends in Dubai.