Unit 9 - D1

evaluate how tour operators respond to challenges they are always being faced with.   

Tour Operations Today and its Challenges Part Three

Tour operators are always being affected by challenges daily, whether it is in a positive or negative way; they are always trying to succeed.
The two main challenges which have affected tour operators recently are: recession and improvements of technology.

Recession

The recession which is still on-going has affected tour operators in a negative way; this is because people are trying to save money they cut down on things they enjoy but are not really necessary daily things they require (where as food and water are a necessary thing). The main thing everyone cuts down on is holidays. People aren’t booking and going on holidays as they need to save money for emergency cases (in case a car breaks down).
Tour operators where struggling in the years of 2011 and 2012, they were going out of business as they had no trade and no one wanted to buy a package holiday.  In total 239 companies collapsed and were gone, this affected around 190,000 passengers and the total amount paid out to customers claims came to £47 million.

There has been a decrease of over four million holidays booked abroad via travel agents, this mean people are not wanting to go to a travel agency as they are saving any money they have left or if they are wanting to go on holidays they may book it their selves via the internet and compare prices for the cheapest holiday but still meeting their requirements and needs.

Budget Airlines

Thomas cook has been badly affected by budget airlines, last year their share price dropped by 45% whereas Easy Jet’s profits have increased by 51%. Easy Jet flew 63 million tourists to various locations last year.

Another budget airline is Aer Lingus profits and shares have increased by 7.8%.

Ryan air is a popular and well known budget airline; it is one of the most established and largest budget airline companies in Europe, when they started in 2009, the lowest fare cost was 10 euros (£7.49), this was the price for short haul destinations. People thought this was extremely cheap so used Ryanair as the transport provider, hover the low price did not include taxes and surcharges, seat reservation and extras (like luggage). Thomas Cook realised a way they can get more competitive advantage over Ryanair is to show the complete price for a flight (taxes and some ancillary services)