The travel and tourism is one of the important components of the greater hospitality sector. In UK the hospitality sector is one of the important sectors for the economy and in recent times the government also recognised and facilitating that. There in the travel and tourism industry the tour operator plays important part in the overall operation of this industry (Walker and Walker, 2016). From that perspective the current report would specifically try to understand the operational part of the tour operator sector by analysis the holiday package creation, distribution method selection, brochure development and overall strategic and tactical application in this process.
The holiday planning process by the tour operators is connected with the travel, tour and hotel industry. In this industry the services and the package developed are the main product. There are different factors that have change in recent times, are impacting the industry. Some of the changes and the trending topics are discussed below.
Aging population and the increasing disposable income
The population of UK are getting older where the median age of the country reached the 40 years (Ons.gov.uk, 2016). At the later age the people are more likely to have reached their professional success and has more disposable income as the expenses for the family is already done. At this age also the people are more into the leisure mode are like to spend time travelling.
Technology application based flexibility
In recent time the proliferation of the internet based technologies in the sector has changed the sector forever (Moutinho and Vargas-Sanchez, 2018). The booking process now can be done through the application of internet, call centres or teletext processes.
Regional airport growths
In recent times the UK based regional airports has increased and grown also. The low cost carriers of the industry have great contribution in this growth process also as they are the primary travelling mode in those regions (Carballo-Cruz and Costa, 2014).
Independent travelling
In recent time the taste and preference of the customers in this industry is changing. In recent time the number of the independent travellers who like to travel along has increased significantly and creating a strong trend in the market (Moutinho and Vargas-Sanchez, 2018). This is the reflection of the modern lifestyle also.
Experience still rules
In the industry one of the most significant positive factors is still the experience of the traveller. More unique experience through the travelling experience is on high demand and there creating appropriate holiday planning is essential for the success for the industry.
Sharing experience
In recent time the experience sharing mode has changed a lot. This is true for the good or bad experience. The customers are more than active in sharing their experience through their reviews in the travel websites and social media. This decentralised information sharing among the experience customers and the potential customers is creating new trend. Because of these reason in recent times the travel planning is highly influenced by the social media reviews. Considering this many business are actively influencing the customer to share their positioned experience of the tour.
Travelling generation
The marketer of this industry has created different segments based on the age like demographic factors. Those are the baby boomer, gen Xers, millennial and the Gen Z. But the segments are not acting uniformly. The trend is that the 30-50 year of age group is more interested in the relaxing activity because of their busy lifestyle whereas more than 60 years of age groups are into the socialising activity and adventures (Litvin et al., 2008).
Chinese market
In recent time the customers from China are the most important segment because of their size. A large sector of the customer is coming into UK. The chances are showing that these customers are more likely to be repeat customer in the coming years (Li et al., 2013). In this market segment the number of women traveller is greater.
Suitability and environment
In recent time the environmental impact of the travel and tourism industry is in the news. Not only the natural environment but also the cultural environment of the particular please is under pressure because of the higher influx of the customer. These challenges are placing greater need for the sustainability strategy development in the industry.
Globalisation and international tourist
The globalisation process has improved the inbound tourist category for the tour operating industry in the UK. In recent years the growth is impressive. 2017 has seen s 6.2% growth from the last year. The visitor’s are also spending significant portion and growth of that is even better. In the 2017 the spending by the inbound tourist is around £25bn which is 11.6% growth from the 2016’s level (VisitBritain, 2018). In case of outbound tourist the numbers are not changing significantly in recent times.
There are few studies done for the UK market. There the most dominating factor for attracting the customers for the UK market are the recent and past cultural attributes historical places and buildings, the cultural long heritage (visitbritain, 2018). These factors need to be considered properly in the development of tour package in UK.
The planning process of holiday is highly important for making it successful. Different factors, stages and decision making criteria are to be considered for the planning of the holiday.
Destination research
At this stage the initial information of the tour destination is to be collected. For the UK region tour planning the best approach is the PESTLE analysis of the UK and Belgium market (Moutinho and Vargas-Sanchez, 2018). Here the recent event like UK leaving EU and its implications would be in the planning process. This process not only impacts the political situation but also the economic, social and legal positions. Like the falling pound in recent time because of the Brexit event is one of the facilitating factor for the inbound tourist inflow but a negative factor for the outbound tour. Before the development of the tour package these factor analysis would take around 3 to 5 month time for the analysis.
Tour itinerary
This is the next of development in the holiday planning. This is basically a summery that is used for the tour planning. Here the in short the accommodation, route and destination of the tour, special placed to visit, mode of transportation for this process and so on are explained. In case of UK to Belgium tour the main attraction is cultural heritage, historical places and those would be at the centre of this summery (Middleton et al., 2009). This overview of the planning process is useful for the detailed planning. This process generally takes 2-3 month to complete.
Process of negotiation
The different restaurant, vendor, travel businesses, hotels are to be considered for the negotiation process. These businesses would provide their valuable service in this tour plan. There the negotiation of prices, services requirements and other considerations are to be negotiated (Litvin et al., 2008). Overall communication and negotiation could be done within 2-3 month time period.
Pricing
The pricing of the tour holiday package is important. Here the different economic factors like the inflation, currency exchange rate and so on are to be considered (Blanke and Chiesa, 2013). On the other hand the after the negotiation process the cost factor is also known to the operator. For the pricing of a current tour package could be done through value based pricing policy or cost plus pricing or psychological pricing approach. This step takes around a month.
Tour plan development
At this stage the negotiation and selection is done. Initial planning and pricing is completed. At this level the detailed plan is developed on the basis of number of student and number of days of holiday (Middleton et al., 2009). Here the proper break even analysis needs to be done to asses minimum number of student required against a given feasible pricing of the plan. On the other hand a detailed plan for tour promotion and distribution is also developed at this stage and this would take around 4 months.
Marketing and communication
The marketing communication is used to reach to the students. This is summer vacation holiday plan for the student. Considering this the communicational message would be provided before the season (Middleton et al., 2009). The message would be developed through visual representation of the kind of experience, luxury facility, and educational knowledge gathering possibility they can expect. The preferred communicational channel is the digital and social media platform because the students are more active there. This campaign would take full one month effort.
Activity after the completion of tour
The completion of the tour successful is valuable for the business in future. In recent time the customers are more influenced by the opinion of other experienced traveller. Therefore the business would engaged with the students after the tour and ask them to share their experience (Blanke and Chiesa, 2013). This would be valuable marketing asset for the business. The feedback would also be gathered in the business for the future improvement of holiday planning.
There are different features of the tour planning and the contracting process is important there. There are different types of operator. The inbound operators are the businesses who provide the tour support to the non resident type people travelling to other country. In case of language problem of the tour destination the inbound operator are of great helps as they take care of delivery and pickups, provides local guide, activity arrangement, stay details management, providing emergency help and so on. On the other hand the outbound operator provides the service to a country resident to tour in another country (Swarbrooke and Horner, 2012). They create the tour package and then sell those of the operating country residents and manage the traveller credential management to other facilities. These outbound operators sometime get into contract with the inbound operators. The domestic operators are there to provide the service to the travellers of the country within the country. On the other hand the ground operators provides the essential services for the accommodation, travels and so on. In the current report Trailfinders is operating as outbound operator. Here the fixed or sale only method of contracting can be applied and those are explained below.
Sale only- this is generally high priced contract for the facilities like the hotels, transport or the attractions. Demand and customisation is addressed through these types of contract for the customers (Evans et al., 2012). This low risk but higher priced services are bought by the tour operators from the provider of the services as per the requirement and payment is done for that only. For example if the requirement from the customer is 40 seat booking for air travel or 40 hotel suite, the payment is received for the exact number and exact specification requirement.
Fixed contract- in this contract the tour operator would purchase the service in bulks from the different service providers like the transporter, attractions r the hotels. This approach helps them in the achievement of cost minimisation by purchasing in bulk (Evans et al., 2012). The tour operators now have to sale the purchases service through proper holiday pack development. Here the unutilised service is not refunded by the provider of the services to the tour operator. Here the risk is there but the cost advantage is attractive for the operators.
In the current education, summer vacation based tour plan for the students from London, to Brussels and Brugge, is having large requirements. Every group would have minimum 40 students and more than one group is possibility. During the August month the students have the great chance of joining the tour. Considering this a correct forecasting based approach can be applied for the fixed contracting application (Swarbrooke and Horner, 2012). This would create higher profitability for type business.
The cost of the service is calculated for one group of student with minimum 40 students. The twin room based accommodation facility for two adult students would have 20 requirements. Exchange rate is considered in the transportation cost calculation. The total cost is the cost for the tour package. The selling price in approximation for the package and per student comes at £20482.60 and £520.84 respectively.
|
Particulars |
Cost and price calculation |
|
Accommodation for 5 night and 40 student |
(90×20×5)= €9000 |
|
Transportation |
(7400×1.15)=€8510 |
|
Tour guide |
€920 |
|
Total cost for 40 student based group |
€18430 |
|
The selling price after adding profit percentage @30% |
€23969 |
|
Selling price of tour package in £ |
£20482.60 |
|
Price for every student |
€598.97 |
|
Price for every student in UK |
£520.84 |
The design of a brochure for the current holiday tour plan is one of the essential marketing communicational activities for the business. In the current tour the important aspect are the adult student based group tour for the educational purpose during the summer time with luxury facilities. The planning decision for the brochure must have the contribution of these different considerations.
Need for brochure
The primary need for brochure is the showing of professional approach. A well planned and designed brochure provides the impression of organised, professional, customer friendly tour operator. This is a service oriented business and the service standard depends on largely uncontrollable situations. Under this lack of standardised aspect a proper brochure provide the necessary confidence to the customer about the operator. On the other hand the customer convenience is also an important aspect here (Buhalis and Jun, 2011). The customer would find the necessary information in a suitable way through this digital or physical brochure format.
Design issues
First approach would to understand the stakeholder involved in the holiday plan and the audience of the brochure. In the current situation the adult student segment is the target customers and the stakeholders are the tour operator, service providers and government officials. The design of the brochure must be up-to-date and attention drawing for the round student community. In this planning part of the brochure the proper objective is set and followed in the design (Xiang et al., 2015). The main objective is to attraction the adult students for the educational tour by showcasing the luxurious facilities, educational opportunity, and time well spent in the summer vacation time, the historical and cultural attraction of Brugge and Brussels.
The design finalising process must look into different things. Some of those are the du to date design, proper use of graphics and headlines, addressing FAQ, proper summarisation, booking instruction, contact details, reasons to buy, essential promises by the operator, easy information gathering approach and so on.
Development planning
The brochure development needs to be done through proper planning. First approach is the budget setting for the brochure design and distribution process (Buhalis and Jun, 2011). Then the time plan development would be done to distribute the brochure before the summer vacation of the students starts. Number of traditional printed brochure making and the e brochure distributing channels world be decided here.
The most important alternative of the traditional printed brochure is the e-brochure. Apart from that the similar type of information and design sense can applied to attract customers through the website design, social media posts and so on. All of these alternative approaches have different suitability factor over the printed traditional brochure and those are listed below.
Flexibility- the design is more flexible and can be viewed from different screen size. On the other hand after design completion and uploading the changed can be done whereas for traditional printed brochure this is not applicable.
Less time and cost consuming- from design to uploading or distributing it takes less time for the alternative format (Terestyenyi, 2011). No printing cost is a save for the business and also environmentally friendly.
Response- the e brochure or the other similar approach mentioned can have faster reach as well as faster responses. In case of website and social media post the reaches and response is more measurable to generate lead and also converting those (Sebastia et al., 2009).
Quality look- in recent times the mobile device application has increased. These are high resolution oriented devices and there the design looks much more attractive.
In the current tour package the target customers are the students. This target customer base is more active in the online world and more influenced by the online reviews and social media comments. The e–brochure or other format here provides the opportunity to reach them effectively (Terestyenyi, 2011). On the other hand the sharing approach on this platform may help the business to generate viral marketing. Considering all of these the alternative approaches would be best under current circumstances.
There are different channel of distribution for the tour operators today. The increment in the channels is because of the technology development and the application of innovation in this market. Some of the important distribution channel for sales is discussed below.
Website booking- in recent times having an e-commerce facility equipped website for the business became essential especially for the hospitality industry (Buhalis and Jun, 2011). The booking of the tour through the website of the business is now contributing almost largest source of revenue.
Inbound and outbound tour operators- sometimes the booking for certain tour packages comes from the in or outbound tour operators (Guo and He, 2012). This is important channel for the inbound or the outbound operators and long term relation development is important here.
Offline booking- this is the approach of traditional sales channel of the industry. There are many travellers who still want to reach to the actual offices of the tour operators to gain confidence to book the tour.
Other online channel and the travel agencies in online- in recent time the online agencies has gained importance as they give the opportunity to the customers to book online independently through their getaway (Sebastia et al., 2009). The social media is also important channel as not only new customer but the referral customers are also generated from the course.
Local point of sale- these are the local agents, restaurants, hotels and so on. They provide a minimum amount of business to the tour operators.
Under the current situation the target customers are the adult student and this is specialised tour operation where the student’s educational tour is organised. They are tech savvy and high presence in the online world. Considering this the business website, online travel agents and other online channels the most important sales channel for the selling of London, to Brugge and Brussels tour (Guo and He, 2012).
Different types of tour operators make decision based on different strategic requirements. Some of the strategic decisions that are made by different types of tour operators are discussed below.
Market analysis and demand forecasting- The market situation analysis is important to understand the demand making factors and customer segments. For the inbound, ground and domestic operators the market situation of the operating country is important. The economic situation, consumer sentiment, tourist attraction, tastes and preference analysis of the domestic market makes great forecast (Woodside and Martin, 2008). On the other hand for the outbound tourist the world economy, growing and mature market, regulatory environment is important to under the demand.
STP- in the business strategy marking now plays an important role. This segmentation, targeting and position of the market through the marketing activity help all the different types of operators to specifically channelize the time, resource and effort to gain more customers (Stokes, 2008).
Pricing strategy- this is also part of marketing strategy but has overall impact on the business profitability. Operators who are focused on the domestic market needs to assess the disposable income of the population and the kind of service they are offering. The higher differentiation point would demand higher price but low risk factor in the domestic market would have lower price compared to internal market (Woodside and Martin, 2008). the seasonal discounts, loyalty offers, incentives to buy fix contract based services and so on are applied for the pricing strategic decisions.
Regulatory strategies- the regulatory situation in the market is changing. Like in recent time the Brexit situation restricted the single market access from UK. Here the inbound or the outbound operators preparing plan for travel from EU to UK or UK to EU, needs to consider the changes in regulatory frameworks.
Competitive advantage- both the domestic and the international market is highly competitive for the tour operators (Stokes, 2008). Like for the outbound operators the large international networks with the different service providers provides a good competitive advantage.
Promotional strategy- this strategy is also part of marketing strategy. In recent times the online world and free flow of information is impacting the customer decision making. Considering these both for the domestic and international operation the promotion using this new technology becomes critical for the success (Sigala et al., 2012).
Risk management- in case of fixed contract, international operation, difficult economic circumstances, and natural disaster and so on can provide risk factors. Travel insurance and other risk management tools needs to be applied here.
The current tour plan developed by Trailfinders for the student educational tour can have different tactical approach in the management of different situation. The tactical approach of business helps in the short term situation management. For the improvement of revenue and profitability better pricing policy can be applied here (Walker and Walker, 2016). The luxury facility of the current holiday plan with some improvement is the facility can demand around 40% profit margin. The segment selected here is the adult students. They are targeted by offering great plan for educational tour. Here Trailfinders can better position themselves as special tour operator. They should not only use the luxury as the positioning point only but also the educational opportunity, growth in knowledge development, valuable experience. Another tactic is the resource use optimisation for better profitability (Walker and Walker, 2016). Trailfinders is getting 45 seater luxury coach with a price of £7400. Here the current group of student can have 45 students instead of 40 students to optimise resource utilisation and improve profitability.
Conclusion
The operation management for tour is complex task. Different matter needs to be considered at the time of developing a holiday tour plan. In the current report different factors is explored with the case provided. The understanding of the trend, market, tour planning, marketing and distribution aspects, the strategy and tactical application analysis and exploration in the current report provides valuable insight.
Reference
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