9 Tour Operating

8/16/2019 9 Tour Operating

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TOUR OPERATINGTOPIC 9


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• Defne the role o a tour operator and distinguish betweendierent types o operator

• Explain the unctions o each type o operator

• Understand how operators interact with other sectors o

industry• Understand how the activities o operators are constrained

• Understand the basic principles behind the constructionand marketing o a package tour

• Understand the appeal o the package tour to its variousmarkets

• Evaluate alternative methods o tour distribution andrecognize the importance o new orms o electronicreservations and sales systems or operators and theirclients

objectives


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• Distinct unction

– !urchase separate elements o transport"accommodation and other services and

combine them into a package which theythen sell directly or indirectly toconsumers#

• $ometimes classifed as %holesalers breakbulk

•

$ometimes classed as !rincipal&$upplier

'he role o the tour operator


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Travel principal(airline" hotel" carhire" etc)

Tour operator

(packages togethertravel elements rom

several principals)

Travelagents

Customers(*usiness and leisure

travellers)

'our operator+s position


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,# 'he domestic operator

– -rganize package holidays domestically

– 'o a destination within a country which the

tourists reside.# 'he incoming operator

– /andle incoming oreign holiday makers

– 0erely ground handling on behal o

overseas '- – 0ay provide comprehensive range o

services

– $pecialize in the markets being served

'he specialized roles o touroperators


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1# -ther specialization – $pecialize in a particular aspect o

operation

– 0ode o transport

– *ased on markets they serve or theproducts they develop

–

0ass market vs specialists aiming niche – *ased on 2eographic Destination

– *ased on market (age" marital status)



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3# 4ir *roker

– $pecialize in providing seats in bulk toother tour operators

– 5onsolidators consolidate 6ights onbehal o tour operators that have notachieved a good load actor or theircharters

– Deal directly with airlines 7 buyingseats in bulk 8 arranging to sell these

– $eats sold is smaller bulk blocks on

individually to other '- or '4



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•

9nclusive tour programme a series ointegrated travel services" each o whichis individually purchased by the '- inbulk and resold as part o a package at an

all inclusive price• %hat are the integrated services:

4ircrat seat4ccommodationat destination

-ther servicessuch as

excursions orcar hire

'ranser betweenthe

accommodationand the airport on

arrival and

'he nature o tour operating


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• $uccess depends on

– 4bility to buy its individual products"put them together 8 sell them at aninclusive price lower than thecustomers could obtain themselves

– ;alue or money

• '- keep prices low by


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• !eak and o peak periods

• *eing highly price sensitive andentitlement o longer periods o holidays

entitlement has helped to reduce theaect

– Encourage to take a second holiday

•

/ow to encourage clients out o seasons: – By the use of marginal costing: pricing

holidays to cover their VC and makingsome contribution to FC

!roblems o seasonality


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• >9


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'enders put out or brochures

=egotiation with airlines or charter6ights

=egotiation with hotels" transerservices

optional excursion operators5ontracts completed with hoteland airlines

and transer services" etc

.# =egotiation


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• Determine exchange rates

• Estimate $! based on in6ation

• 2alley proo rom printer" corrections

made

• =ecessary reservations sta recruited andtrained

•

>inal tour prices to printer• *rochures printed and reservations system

established

1# 4dministration


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*rochure on mkt" distribution toagents

9nitial agency sales promotion

>irst public media ad" tradepublicity through press

!eak ad and promotion to tradeand public


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/andling general enAuires

4dvising on currency exchange" shopping

and so on

-rganizing and supervising social activitiesat the hotels

!ublicizing" selling and booking optional

excursions

/andling special reAuirements andcomplaints and acting as an intermediaryor clients#


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• ;ital to get the price right

• /as to be

–


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costPercentage ofoverall costs

5harter air seat 3B

/otel accommodation 1C

-ther services at destination 1

/ead oce overheads B

'ravel agencies+ commission ,

5osting the package


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Discounting strategies

• Discounting on published tour pricesbecome a widely accepted practicein the industry#

• -riginally applied to late bookings inorder to clear seats#

• '4 decides to pass on to the clients a

proportion o their commission

• /eavy discounts by market leadersthrough their own retail chains


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5ash 6ow

• 9n normal bookingclients pay operators ,year earlier#

• -perators need to payhoteliers their advancesand need to makedeposit to charter

6ights#

• ?ate bookings andpayment by credit card

will be a all in interest


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• !rice o company+s package right sothat sucient demand is generatedto fll available seats while at the

same time prices are not so cheap asto threaten proftability

Field management


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• ;ital marketing tool

• 0ain in6uence on the customer+s decisionto buy

• ?arge sums invested• !rincipal means or

– 9norming customers about the product

–

!ersuading them to purchase it

'our brochures


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• ?arge companies

– -wn advertising departments

– Design by studios

• $mall companies

– Done by themselves (but advised to getproessional help)

*rochure design and ormat


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• =ame o the operator

• 0eans o transport

• 9tinerary

• Duration

• !rice" etc

9normation reAuired in thebrochure


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• Decide

– Use all '4

– $elect the most productive

• Gey ratio – 'hat o brochures given out to bookings

received

*rochure distribution and control


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• Design o the system depends on

–


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• $election o retailers

– -perators take up retailers andoccasional bookings direct

'he distribution network


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Draws up aormal

agreement$peciy termsand conditions

o trading

Documents

9 Tour Operating