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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
Icebreaker
Name five different tour operating companies that you are familiar with Try and come up with a definition of a tour operator Make a list of what you think a new tour operator would have to do to organise, plan and sell its holidays Make notes on the range of internal and external influences on a tour operating company that could affect its profits Think about the laws and regulations that tour operators must comply with in the course of their work Name three specific jobs that are offered by the major holiday companies Make a list of the costs that a tour operating company will incur in the course of its work
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
Vertical integration
Vertical integration in the travel industry is when a company has control over other companies that are at different levels in the chain of distribution or in different sectors, for example: TUI Travel UK owns Thomson and First Choice tour operating businesses, and the Thomson and First Choice travel agency chains (TUI UK is itself controlled by the German company TUI AG)
Thomas Cook AG (a German group) owns the Thomas Cook and MyTravel tour operating companies (including Airtours), plus the Thomas Cook and Going Places chains of travel agencies
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
Horizontal integration
Horizontal integration is when a company owns or has control over a number of companies at the same level in the distribution chain or the same industry sector For example, many tour operating businesses that are now part of the big two were originally independent companies, e.g. Neilson and Club 18-30 (now part of the Thomas Cook Group), and Something Special and the Holiday Cottages Group (now merged with Thomson)
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
To give yourself an example of integration in travel and tourism, carry out some research into either Thomas Cook or TUI UK and design a chart that shows all the different companies it owns across tour operations, travel agencies and transport operations.
This activity is designed to provide evidence for P1
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Regulatory bodies
Regulatory bodies exist to make sure that tour operating companies operate in a fair, honest, efficient, safe and secure manner, for the good of the companies, their customers, suppliers and society at large . The following are important regulatory bodies in tour operations:
Civil Aviation Authority (CAA) Health and Safety Executive (HSE) Trading Standards Officers Foreign and Commonwealth Office (FCO)
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
Contract law
From a lawyer's standpoint, a contract is any agreement that the law will enforce, whether in writing, verbal or implied, i.e. assumed from the conduct of the parties Contracts range from the very simple, e.g. buying a drink at a resort complex, to the very complex, e.g. building a cruise ship It is important to remember that when a holidaymaker books a package holiday through a travel agent, the contract is between the customer and the tour operator, with the travel agent merely acting as an intermediary. It is against the tour operator that the customer must seek legal redress in the event of a breach of contract
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Bonding
A tour operators bond is a formal undertaking from an approved bank or insurance company to pay a sum of money to ABTA or the Civil Aviation Authority (CAA) in the event of the company's financial failure. Bond monies are used in a number of ways: Clients whose holidays are actually taking place when a tour operator ceases trading can continue with their holiday as planned or be brought back to the UK Clients who have yet to travel on holidays already paid for can get their money back when an operator fails
Alternative holiday arrangements can be made for clients, who have paid for trips that have yet to take place, when a tour operator ceases trading
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Licensing - ATOLs
An ATOL (Air Travel Organisers Licence) is a licence issued by the Civil Aviation Authority (CAA) and is required by all individuals and companies selling holidays and seats on charter flights Applicants must show that they are fit to hold an ATOL, have adequate financial arrangements and must lodge a bond with the CAA In the event of company failure, the bond money is used to repatriate clients who might otherwise be stranded overseas and to refund, as far as possible, passengers who have paid in advance but have yet to travel
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Environmental factors
Natural disasters, such as hurricanes, floods and avalanches, can have serious consequences on an areas travel and tourism industry The tsunami of 26 December 2004 was one of the worlds most devastating natural disasters of recent times, killing nearly 300,000 people across a range of countries, including Indonesia, the Maldives and Sri Lanka
Reports from the World Tourism Organisation (WTO) suggest a drop in tourism of as much as 70 per cent in the Maldives, when January 2003 figures are compared with those of the same month in 2004
The people in these countries rely heavily on the foreign currency that tourism generates and have worked hard to restore the tourism industry to its former state
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Log on to the Travel Foundations website (www.thetravelfoundation.org.uk) and produce an information sheet on the Foundations aims, work, structure, partners, etc.
This activity is designed to provide evidence for P1
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Political factors
Political acts such as war and terrorism can have devastating impacts on a destination and its travel and tourism industry This is particularly true when the destination is heavily reliant on tourism and has few other economic activities
The effects of the 9/11 disaster on world travel still persist today, while recent bombings in Bali, Nairobi, Madrid and Cairo, have immediate impacts on tourism, although most destinations eventually recover lost trade
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Economic factors
A sudden change in world currency exchange rates can wipe out a tour operators profit margins overnight
Similarly, rises in the cost of oil and other natural resources can push up a tour operators costs and affect its profitability Holiday companies use a number of mechanisms to try and reduce the impacts of these situations They can pay for foreign currency and commodities in advance when rates are favourable and sometimes pass the extra costs on to travellers in the form of extra taxes and duties, e.g. in the form of an aircraft fuel surcharge or holiday supplement
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Social factors
Tour operating companies have to keep abreast of social changes and adapt their products to reflect a changing society The fact that people are generally living longer, are choosing to have children later in life (or not have children at all), changes in the composition of families, working methods and the home/life balance, all impact on the products and services that tour operators offer their customers
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Technological factors
The travel and tourism industry has always been at the forefront of new technological developments
The dramatic growth in the use of the internet for researching and booking holidays is having a major impact on the way that tour operators sell their holidays Trends such as the rise in dynamic packaging and the computerised reservation systems (CRS) used by travel agents are changing the way that tour operators work
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Dynamic packaging
Dynamic packaging is when travellers use the internet to research their holidays and make their own travel arrangements direct with airlines, hotels, car hire companies, etc. It offers people greater flexibility than buying standard holidays from a travel agency and can sometimes work out cheaper as well
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Budget airlines
Budget airlines are having important impacts on the work of tour operators, some positive and some negative
On the positive side, tour operators are able to use the network of routes offered by the budget airlines when developing their holidays, thereby offering a greater variety of destinations at reduced prices The negative impact is to do with the fact that travellers are using the low-cost airlines to put together their own holidays dynamic packaging by-passing the need for a tour operators services
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Improving quality this can improve customer satisfaction and increase repeat business and recommendations to friends/family
Training staff allows tour operators to improve customer service
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Write a 500-word newspaper article that explains the challenges facing the tour operating sector and evaluates the effectiveness of two named tour operators that are responding to the challenges.
This activity is designed to provide evidence for M1 and D1
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Some are very big companies that sell millions of holidays every year, the so-called mass-market tour operators, while others are small and medium-sized enterprises (SMEs) employing just a few people
TUI UK/Thomson and Thomas Cook are the UKs biggest outbound tour operators together they arrange around 11 million package holidays every year
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Visit the AITO website (www.aito.co.uk) and choose one tour operator that offers holidays to Europe. Compile a fact sheet that describes the products and services offered by the tour operator, analysing how these meet the needs of its target market(s). Recommend, with justification, how the tour operator could expand its range of products and services for its current target market(s) or adapt its range of products and services to appeal to a new market.
This activity is designed to provide evidence for P2, M2 and D2
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Package holidays
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Tailor-made holidays
Tailor-made travel arrangements involve designing all aspects of a customers holiday on an individual basis rather than selling a readyassembled package holiday The customer benefits by getting a holiday that is individually tailored to their needs, but it does mean more work for the tour operator This type of arrangement is growing in popularity as more people seek out holidays and destinations that offer something different
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Target markets
A target market refers to the customers that a tour operator is trying to attract to buy its holidays. Typical target markets for which tour operators develop holidays include:
Singles Families Couples without children Groups Special interest market Business travellers Youth market Activity market Senior market
A tour operator may concentrate on a single target market or develop holidays that appeal to a variety of customers
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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1. 2. 3. 4.
Research and product development Contracting Costing and pricing Brochure production
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Draw a flow chart of the main tasks involved in developing a package holiday programme to a new long-haul destination in South America. Include timescales and staff/departmental responsibilities in your chart.
This activity is designed to provide evidence for P3
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Contracting
There are three main types of contracts used in tour operating: 1. Commitment/guarantee where the tour operator guarantees to pay for a certain number of bed spaces 2. Allocation and release back where the tour operator agrees an allocation of a certain number of bed spaces with the hotel and agrees to give back any that it has not sold by a certain date 3. Ad hoc this is the most flexible arrangement, when a tour operator agrees a contract (discounted) rate with a hotelier and makes bookings as and when required Negotiations on contract terms usually start a year before the holidays are sold
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Brochure production
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Selling direct to customers tends to offer a higher profit margin for the tour operator, since there are no agents or middle men to pay
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Sales promotions
Tour operators must promote their products well if they are to reach their sales targets
In large tour operating companies, marketing department staff plan and co-ordinate a range of promotional activities including advertising in newspapers, magazines, on the internet and Teletext, direct mail, product launches, sponsorship and sales promotion, to ensure that the operators' products are given maximum exposure
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Reservations
Most tour operators, whether large or small, use computerised reservation systems to process bookings, offer alternatives if a first choice of holiday is not available and generate the paperwork associated with a sale With the growth in the use of the internet for online bookings, which are often confirmed electronically, many reservations staff are now found in call centres, handling high volumes of phone calls from agents and the public
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Administration
The tour operators administration department is responsible for producing invoices, receiving payments and issuing tickets and other documentation Staff also produce passenger lists, known as manifests, for distribution to airlines, hoteliers, ground handling agents and resort representatives, plus carry out the full range of everyday administrative duties associated with the operation of a commercial concern
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Working as part of a small group, list the main tasks that would be undertaken by staff in the administration department of a major outbound tour operator. Use your list as the basis for drawing up a job description and person specification for the permanent post of Administrative Assistant for a mass-market operator based in Manchester.
This activity is designed to provide evidence for P3
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Operations
As well as being responsible for researching, planning, costing, promoting and selling package tour programmes, UK-based tour operations staff have a number of important duties to perform to ensure that holidays run as smoothly as possible, including: Managing changes to travel arrangements and bookings, e.g. overbooking, cancellations, errors, name changes, flight/coach transfers, consolidations (when a flight is cancelled and its passengers are transferred to another), etc. Duty office this is the main link between resorts and UK operations, manned 24 hours a day in case of problems. In extreme cases of emergency, duty office staff can charter aircraft to repatriate customers as the need arises Customer service handles all aspects of the customer/tour operator interface before departure, in-resort and post-holiday
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Overseas operations
As well as having a general duty to provide a high standard of service to the tour operator's customers while abroad, staff in the overseas office of a major UK tour operator will have a number of specific responsibilities, including: Checking passenger manifests (lists of customers travelling) Organising transfers to and from the accommodation and airport Selling and arranging excursions and other 'extras' such as car hire Finalising contracts with hoteliers and transport operators The well-being, training and deployment of representatives The handling of complaints and emergencies Crisis management in the event of a major incident Ensuring health and safety procedures are followed by staff and customers Feeding back to the UK office any formal or informal research findings
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Design an illustrated chart that shows the different roles carried out in the UK and overseas by a major, mass-market tour operator.
This activity is designed to provide evidence for P4
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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Variable Costs
Postage Telephone, fax and internet Computer and equipment hire Printing and stationery Advertising and publicity Part-time staff Professional fees and charges Bank charges Transaction charges, e.g. credit cards
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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You can assume that all suppliers will give you discounted, inclusive tour (IT) rates for accommodation, travel, excursions, etc., but as this is a new venture you are only likely to be offered a discount of 25 per cent off their brochure rates, e.g. you will be charged 37.50 for a room that would appear in a hotels tariff as 50.
Having designed and planned your package, you are now in a position to cost it. As with the example of the package holiday to Corfu on page 69 of the textbook, you will need to calculate all the direct costs of the holiday and add a mark-up of 20 per cent to cover fixed costs and a margin for profit. If you choose to fly your holidaymakers to the destination, you need not worry about load factors as you will be using a scheduled carrier (which could be one of the low-cost airlines).
Points to be bear in mind when costing include: 1. Variations in accommodation and travel prices depending on the season; 2. How your final prices compare with similar packages offered by other operators Present your planning and costing of the package as a short feasibility study, including all the information you have collected. Include a section that explains ways of maximising the profitability of the planned package holiday.
This activity is designed to provide evidence for P5 and M3
BTEC National Travel & Tourism 2007 specifications (c)Travel and Tourism Publishing Ltd.
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