Unit 13 - P1

explanations on the tour operations environment and the challenges they face. 

Tour Operations Today and its Challenges Part one

Travel agents

Tour operators work with travel agents by using agents as a sale outlet for tour operators, selling holidays and agreeing commission payments and booking producers. Travel agents also advertise and promote offers in shop windows on behalf not the tour operators.

Transport providers

Tour operators negotiate and agree contracts with transport providers such as airline companies. And then rail operators, coach companies and taxi operators from airports to the guest’s accommodations. Sometimes a transport/ transfer are provided in a package holiday created by a tour operator.

Hotels & other accommodation providers:

Hotel companies and accommodation providers sell to tour operators so they (tour operators) can make package holidays to the give to travel agents to sell to customers. Accommodation providers negotiate allocations of bed space that form the accommodation element to the package holiday.

Ancillary service providers:

At the end of booking a holiday, customers can book car hire, holiday/travel insurance and excursions for the holiday. Tour operators work with companies and offer deals and discounted prices to customers.

Tour operators’ relationship with trade & regulatory bodies

Trade bodies

Trade bodies and associations are established to represent the interests of companies in the tourism industry. Some examples of trade bodies are ABTA (Association of British Travel Agents), AITO (Association of Independent Tour Operators) and ETOA (European Tour Operations Association).

ABTA –is the UK’s leading travel association; they have been around for sixty years. Their purpose is to help the members grow their businesses.
AITO –represent more than 120 of Britain’s best independent tour operators. The members specialise in destinations or types of holidays

ETOA - leading trade association for tour operators and suppliers with business in European destinations. There are over 700 members, these include tour and online operators, intermediaries and wholesalers; European tourist boards, hotels, attractions and other tourism suppliers.

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 companies, their customers, suppliers and society at large. The most important regulatory bodies are: CAA (Civil Aviation Authority), HSE (Health and Safety Executive) and FCO (Foreign and Commonwealth Office).

CAA - Their purpose is to make sure that safety and performance is at the highest standard possible. It is run by the government funded by members. Their mission is to improve choice and value for customers. There are 2,400 holders that the CAA regulates.
HSE - providing a new regulatory framework for work place health and safety in Great Britain. This has helped make Britain one of the safest places in the world to work, saving thousands of lives, preventing many more injuries at work and reducing the economic and social costs of health and safety failures.
FCO –promotes the United Kingdom's interests overseas, supporting our citizens and businesses around the globe.  The three main things they do are: safeguarding the UK’s national security, building the UK’s prosperity by increasing exports and investment, supporting British nationals around the world.

ABTA Travel Trends Report 2014: Horizontal & vertical integration impact on tour operators

Horizontal integration

Horizontal integration is a when a company owns or has control over a number of companies at the same level of the distribution chain of the same industry sector.

Thomas Cook is a tour operator which is horizontally integrated; Thomas Cook has its own travel agencies, call centres and airlines

Vertical integration

Vertical integration is when a company/ organisation has many companies on a chain of distribution

Easy Jet is a tour operator which is vertically integrated

Tour operators and legal framework

EU package travel regulations

Tour operators use the regulation as it protects packaged holidays when taken place in the EU. The operators have to use it because if a customer does not enjoy their holiday or something happens before or during the holiday they are protected. Also package holidays should have an accurate description allowing the customer to expect what they have read, seen or heard about without it being made up.

Consumer protection
Tour operators use the consumer protection to protect customers and not reveal any personal information such as addresses and bank account details  

Tour operations and factors

Tour operators have many factors which affect them, they fall under five categories: Environmental, political, economic, social and technological.

Environmental                                                              

Tour operators are now making more and more sustainable holidays and making responsible tourism a popular thing. In Kenya there are specialised holiday which have sustainable activities such as air balloons rides or safaris on foot or on horseback (the jeeps ruin the nature and emit too many fumes). Some countries cannot be flown over due to high levels of CO2 and trying to make the country not be smoggy as it already has high levels of dangerous fumes.

 Political

Tour operators have political factors that affect the tour operators are the laws and legislations, this affects the tour operators in a positive way as if anything happens the tour operators have acts to protect the company and the customers. Another factor is maintain market share, tour operators try to maintain or even increase their market share in a number of ways such as: offers and promotions, good quality of products and services, integration, increase of  distribution chain, increased value of products and services and through adverts. They also gain market share by training their staff which allows the staff to improve customer service making the tour operator more favourable due to customers being happy to book holidays with them.

Economic

Tour operators have economic factors which affect their environment. The main challenge is budget airlines Budget airlines are an important impact affecting tour operators in a positive and negative way, the positives are: cheaper package holidays for customers and dynamic packaging (customers book everything themselves). The negatives about budget airlines are that there is no control over customer service and the quality of the products and services.

Social

The challenge affecting the social factor for tour operators is independent travellers. This means that more and more people are booking their holidays themselves (direct) and not getting someone else to do it for them saving money as travel agents get commission on holidays.

Technological

The two main challenges which are affecting tour operators technologically are dynamic packaging and distribution chains and channels.
Dynamic packaging
Dynamic packing is when travellers use the internet to research their holidays to make their own holiday arrangements direct with airlines, accommodation providers, car hire companies and excursions etc. This offers people greater flexibility than buying standard holidays from a travel agency and can sometimes work out cheaper as well.
Distribution chains and channels

Traditionally a person would visit their local travel agency to get advice and book their holiday.  Nowadays people research and book holidays through internet and mobile apps, via the comfort of their own home or whilst on the go.