Lecture #2
Tour operating business in the
world economy
Plan & objectives:
• define the role of a tour operator and distinguish
between different types of operator
• explain the functions of each type of operator
• understand how operators interact with other sectors
of industry
• understand how the activities of operators are
constrained
• understand the basic principles behind the
construction and marketing of a package tour
• evaluate alternative methods of tour distribution and
recognize the importance of new forms of electronic
reservations and sales systems for operators and their
clients.
Tourism often plays an important part
in a nation’s economy by providing
opportunities for employment, contributing
to the balance of payments and stimulating
economic growth.
Countries that experience an influx of
large numbers of tourists, however, also
suffer the environmental and social
consequences of mass tourism, unless care is
taken to plan for and control the flow of
tourists.
The importance of business
The package holiday has made the process of
organizing holidays much more straightforward
than before. For many holidaymakers, the
convenience of booking a package, which provides
all the component parts of the holiday, has
encouraged travel to locations that, otherwise, they
would not have considered. This has overcome
language barriers as well as concerns regarding the
suitability of the products, such as accommodation,
airport transfers or tours, all at a competitive price.
Thus, the demand for packages has ensured that
tour operators have continued to have a significant
role in the tourism industry.
The use of tour operators as an
intermediary in the travel booking
process varies across nations. The
decision as to whether or not to use
intermediaries is influenced by a wide
variety of factors, including the nature of
travel (domestic or international) as well
as the experience of the traveller.
Definition
• A tour operator typically combines
tour and travel components to create
a holiday. They prepare itinerary.
The most common example of a tour
operator's product would be
a flight on a charter airline plus a
transfer from the airport to
a hotel and the services of a local
representative, all for one price.
Types of Organisation
• Tour operators
• Airlines and
airports
• Leisure travel
agents
• Regulatory
bodies
• Business travel
agents
• Public sector
• Accommodation organisations
providers
Tour Operators
• Creating tours
and travel
activities
• Offering these to
customers…
• Through travel
agencies or
• Directly via the
Web
Four main firms
dominate:
• TUI (Thomson)
• Thomas Cook
• MyTravel
• First Choice
Travel Agents
• Travel agents provide the link between
tour operators and customers
• Range from large national chains to
small independents
• Leisure travel agents provide services
to holiday destinations
• Business travel agents provide services
for commercial consumers
Accommodation Providers
• Hotel chains
• New trends, such as budget
hotels
• Bed and breakfast
• Youth Hostel Association
• Villas and country houses
Regulatory Bodies
• Regulators exist to control an
industry to ensure that public,
business and consumers rights are
protected
• The Civil Aviation Authority
(CAA) is one of the travel and
tourism industry’s main regulators
Roles & Responsibilities
Travel and tourism organisations
have responsibilities to:
• Customers
• Other businesses that depend on
them
• The whole industry
Customers
•
•
•
•
Have expectations, such as:
Good service
Quality products and services
Effective complaints procedures
Protection from improper
business practice
Other Businesses
In the first session we saw how the travel
and tourism industry has many examples
of vertical integration:
• Travel firms own businesses above and
below them in the ‘chain’
e.g.
Tour operator
Travel agent
Airline
Other Businesses
They may not be owned by
the same company, though
Firms can still be interdependent, even though they
may compete with each other
Whole Industry
Organisations in travel and
tourism have a responsibility to
the entire industry because:
• It is a highly valuable industry
• Consumers’ confidence is vital
• Many firms’ growth and survival
are inter-linked