Explain the tour operations environment and the challenges it faces
Explain = set out in detail the meaning of something, with reasons. Start with the topic then give the ‘how’ or ‘why’...give an example of what you mean.
Links with other component industries:
Travel agents help sell holidays once the tour operators have put them together. The travel agent will receive this holiday and then sell it onto customers and will make commission from it. For example Thomson work for TUI, they sell TUI holidays therefore TUI the tour operator will package the holiday then Thomson travel agents will sell them to customers.
Tour operators will have links with airlines in order to get their customers from one destination to another. The airline and the tour operator will negotiate and agree on contracts in order to provide transport services to tourists.
Rail and bus
Tour operators will have links with rail and bus companies in order to get their customers from one destination to another. The rail and bus companies and the tour operator will negotiate and agree on contracts in order to provide transport services to tourists.
Ferries and cruise ships
Tour operators will have links with ferries and cruise ships in order to get their customers from one destination to another. The ferry and cruise ship companies and the tour operator will negotiate and agree on contracts in order to provide transport services to tourists.
Hotels and other accommodation provider’s negotiate for the best prices of rooms. The tour operator then puts it into their packages with specific dates of when the room is available and then the travel agents advertise and sell them to customers. Although the customer can go straight to the tour operator and save money as they don’t have to pay commission.
Providers of ancillary products and services e.g insurances, car hire, horizontal and vertical integration
Other products and services include: transfers, insurance, excursions, car hire and extra leg room or seat allocation.
This is the way companies can make extra money by selling these ancillaries, and travel agents also make 40% commission from these sales so they will also try as much as possible.
Horizontal integration is when one company has control over other companies on the levels on the chains of distribution. For example 18-30’s have integrated with Thomas cook and now 18-30’s will benefit from being part of a bigger market.
Vertical integration is when companies come together that are on the same level on the chain of distribution and come together to make them a powerful bigger company.
Links with trade and regulatory bodies:
The Travel Association
Federation of Tour Operators (FTO)
Association of Independent Tour Operators (AITO)
Civil Aviation Authority (CAA)
EU Package Travel Regulations
EU package regulations refers to the sale of the holiday package to the customer. In order for it to be a packaged holiday it must contain to or more components for example a flight and a hotel. The company selling the package must have guarantees in place that if the seller or any of the suppliers cease to trade that the customer will get a refund. If the customer is on holidays when this is to happen the seller must guarantee the customer deportation.
Consumer protection e.g. Trades Description Act, Consumer Protection Act, Disability Act,
The trade’s description act was introduced in 1972 and it makes sure the customer gets everything that was advertised by the travel agent. For example if they have paid for a hotel that has the facilities of a kids club but when they go there is no kids club or it is shut this time of year then it is false advertising on the travel agents behalf.
The consumer protection act was introduced in 1987 and