Contracting Considerations OF THE Tour Operator Tourism Essay

This article will consider the contracting things to consider of a tiny to medium sized tour operator with regards to providing a written report based getaway experience for a clients from socio-economic rings A and B. The statement will consider two key elements namely by means of accommodation and other services in the vacation resort and vehicles of a proper type to and from the holiday resort.

In considering a possible method for providing accommodation for the company's guests there are a number of options available to the tiny to medium sized tour operator. At the main one end of the range the head to operator could consider an option of immediate investment. Such an option would start to see the tour operator buying hotels and accommodation facilities which by the end of the investment the business would own the facilities that could be used for both its own guests and for the purpose of letting out accommodation to other tour providers which capacity permits this options (Holloway et al 2009). However, such an option in the circumstances can be an improbable option for the specific company involved. In the beginning the option is an expensive one, investment in hotel and accommodation facilities can cost hundreds of thousands in there preliminary investment or more, this can be an unsuitable or even unrealisable option for a tiny to medium business.

Secondly, the organization objectives of the company are to minimise hazards, immediate investment however, may be observed as a significantly risky option for many reasons. Within the first case once established, the business will have long-term set costs to meet over an extended period of time, such problems is not incurred in which a contract structured option is performed and therefore the liability to meet expenditures is bound to the decided contract period which could be as brief as an individual season or less. Subsequently, permanent investment an overseas location also signifies dealing with the national risk that are associated with international trade including exposure to currency fluctuations, interest levels and changes in demand from the buyer point of view (Griffin and Pustay 2010). Again, in which a contracting option is known as such exposures whilst still present are limited by a much shorter time period and thus to a big extent offset.

A more genuine option for the company involved may be to consider one of the numerous contracting options which can be found, such contracting options are also large and various in nature and include both immediate and indirect contracts with accommodation providers and a variety of options in regards to to the length contracts undertaken (Holloway et al 2009).

In the first case, the company must select between contracting immediately with accommodation providers or through the use of an authorized agency (Cooper et al 2008). Negotiation straight may help the business to save lots of money by excluding the fees of a third party however, the drawback is that the business may need to deal with a sizable range of accommodation providers each with the own peculiarities and unique circumstances. Alternatively, the company could opt to use another intermediary who'll take on such sub-contracting on the behalf of the tour operator, for the head to operator this reduces complexity in the contracting process in that the tour operator now has only an individual point of contact (Holloway et al 2009). However, on the drawback the head to operator will now incur additional costs from the fees levied from a third party, in addition the head to operator will also lose a degree of control over the accommodation which is usually to be provided and organized by the third party. This may have an impact upon the head to operator who's clientele falls with the A and B communal bands therefore have very specific requirements with regards to their specific accommodation needs in comparison to other sections of the marketplace.

The next consideration from a contracting viewpoint is to consider the distance and degree of dedication in contracting options. Again the tour operator is presented with a variety of options, at the cheapest level of dedication end of the spectrum the tour operator can simply reserve rooms with accommodation provider in mention of specific levels of demand experienced, such an option means that costs are held to the very least and hazards from contractual responsibilities are virtually removed (Cooper et al 2008). There is however, an additional risk incurring in that whilst the travel providers liabilities are minimised so can be those of the accommodation providers, in short should the tour operator experience a surge in demand and the accommodation providers be unable to meet such a demand do to market forces, the head to operator may be left either needing to disappoint customers or have to pay prime prices to be able to fulfill the demand.

At the other end of the spectrum the head to operator could contract to buy a place range of rooms or even entire hotels for a particular time period (Holloway et al 2009). In such a case the advantage would be that the travel operator has a assured level of supply in a given hotel or hotel and thus the potential risks of not being able to meet demand are off established given that the tour operator has a fixed capacity which it could use as it sees fit. The other major benefit is one of cost linked to economies of range (Johnson et al 2008), by starting longer contracts that purchasing rooms at the location rate, the head to operator stands to benefit from significant bulk purchasing discounts as rooms and accommodations purchased over an extended period come at a much reduced cost in comparison to shorter cycles of work with.

However, in such a circumstance the company also incurs some additional risks. Now that the company has got into into a agreement for a set amount of accommodation the travel operator also has the obligation to pay for the rooms and so needs to be able to fill the accommodation to as close to full capacity as is possible throughout the year (Holloway et al 2009). The truth is this may mean offering significant special discounts at certain part of the year to be able to attract enough custom to complete the accommodation, alternatively the tour operator could forego full utilisation however, the contract would start to see the tour operator still having to pay for the accommodation which has been rented in advance.

In addition to accommodation, there are other elements of the hotel experience that your tour operator may decide to consider contracting out to third party providers. Important elements include the provision providing services, onsite entertainment and other forms of entertainment and added value services such as trips and excursions of sites of local interest to the customers of the hotel (Singh 2006).

From a travelling perspective, the utilization of scheduled flights has become one of the most crucial ways travel operators have had the opportunity to take advantage of both the versatility and velocity of air travel within the holiday package deal (Holloway et al 2009). Unfortunately because of the constraints of the scenario the travel operator will have take a look at a number of alternative ways of getting guests to and from the suggested resort which there are always a wide variety of options including substitute air transportation options as well as some more creative solutions utilizing alternative settings of transportation.

The first and perhaps most feasible option for a tour operator who cannot take benefit of scheduled flights to a vacation spot may be to consider using a charter service. Charter services offer to program an plane for the precise use of a client on a given route, charter options can include a single trip local rental but much more likely a charter specialist will agree with a company like a tour operator a regular schedule of plane tickets for a season or even more (Holloway et al 2009, Cooper et al 2008). There are several advantages of the tour operator if this option is employed in. From the passengers point of view, there is almost no difference to if the tour operator had used a scheduled journey, the visitor will be transported to their vacation spot on an aeroplanes which functions in every but the same manner as you operating on the scheduled route. Subsequently, a charter service manages with more flexibility than that of the scheduled flight, the head to operator can make deviate from the time table which would not be a choice which slated options and addititionally there is flexibility of vacation spot which may include local changes such as using an alternative solution airport or even more radical changes changing the way of the aircraft altogether.

There are however, still some disadvantage of the charter air travel option, the primary problem would be one of capacity. In the event the scheduled airline flight the responsibility for filling car seats lays with the air travel specialist and the liability of the travel operator is bound to the number of seats that they have purchased on any given journey. However, when an airplane is chartered the expense of the charter becomes a set cost and the duty for filling seating then becomes the duty of the charterer, in this case the travel operator (Holloway et al 2009).

The charter option has been a relatively successful option lately for tour providers, in some circumstances the model is becoming so successful that there's turn into a blur in the restrictions between planned and chartered plane tickets. This has been exhibited in both functional elements in that some charter flights are so regular concerning almost form a planned service like the sale of extra capacity to additional people. Subsequently many travel providers have searched for to consolidate their positions by purchasing charter airplane providers and integrating these businesses into the key business product (Monarch 2010).

If the tour operator still would like to research the scheduled airline flight option further, you have the consideration that a multi-modal transport procedure may be looked at. When this happens the travel operator may consider purchasing seats to the nearest international airport served by the scheduled journey and then arrange onward move via road rail or water. Oftentimes this can be an unattractive option, especially where distances are significant. This option may become and annoyance for friends and add pointless costs for the travel operator. There are however, times when the choice may be a proper one specifically for the upmarket segment. Such circumstances may are present where the travel operator can integrate the onward move into the vacation package, this may be possible where the route from airport to resort goes by through an section of outstanding natural splendor or an extravagance transport option can be added such as a river luxury cruise which functions a duel work as carry and entertainment.

Air transport however, is not the only choice open to a travel operator an added major option to consider is transportation via water. Normal water transport has largely dropped in recent ages due to the rise of faster and cheaper air carry which also allows usage of a wider number of destinations than drinking water founded or land routes (Holloway et al 2009). Regardless of the decline of the standard ocean liner as a mode of transfer which is now largely confined to summer time transatlantic crossings the market for other normal water based kinds of transport has both stabilised and began to expand again lately. The most important development has been a rebranding of the sail, in past times the luxury cruise as a kind of holiday had declined as a function of both poor branding and the surge of alternatives. However, significant investment on the behalf of the industry has seen the vacation increasing again in level of popularity amongst consumers.

In choosing the transportation mode suitable for a market section in socio monetary groups A and B one option may be to consider providing a cross types holiday which needs advantage of the rise in popularity of the cruise linked to the facilities present at the vacation spot. From a pragmatic perspective the head to operator could in place make use of a cruise liner to transport its guests too the hotel making the carry via water an important part of the holiday package instead of being truly a way of getting to the product by means of the resort. Once at the destination, the head to operator could have the choice of providing a go back journey for guests either via the same method or via an alternative like a charter flight. The major advantage of this option is usually that the tour operator would be able to offer a quality value added product in which all elements of the package including transportation are considered an integral part of the holiday. On the disadvantage, the tiny to medium size of the travel operator would necessitate the utilization of an authorized to give a ideal vessel for use. Therefore would add complexity to the procedure and there would in a natural way be a increased limitation on vacation spots based after the schedules and services of third party providers as well as the natural constraints imposed by limiting transfer options to drinking water based transportation.

There is also a rail option open to the travel operator, this has become a choice with an elevated level of feasibility from the UK since the opening on the route tunnel back the 1990's. Whilst, rail move provides fast and efficient transport from the united kingdom to the major locations in Europe, the true problem with this option is one of versatility. To a sizable extent spots will be limited by the major metropolitan areas within Europe and it can be considered to access to more remote vacation spots and resorts becomes infeasible and impractical for users of the service. Furthermore, the large ranges and dynamics of the rail network means that intercontinental options will be typically off restrictions to a travel operator if looking to use rail as a travelling option.

Given the goals of the business which are typically to reduce risk and the factor of flexibility the recommendation of the record are that the travel operator opts to mention its guests the resort with a chartered air service model. Such a model would see that the company doesn't have to dangers associated with buying expensive capital items such as aircraft or ships which would raise the risk profile of the company significantly. Furthermore, by using an air service the company would also keep up with the element of overall flexibility and speed opening up a wider variety of vacation spots than would be available through land or normal water based types of transport. They are both key benefits for the company's target customer group in socio economic teams A and B. There are however, still some dangers from the charter course, whilst the company wouldn't normally own any specific assets from the transport of individuals, the company would still have a set capacity of seating for which it would need to complete on each trip to be able to keep carefully the cost per traveler for a minimum. The risk here's that during intervals of low demand the company may need to offer significant savings in order to fill plane tickets, this may also generate a conflict with the company's common strategy of concentrating on the premium end of the marketplace (Porter 2004, Jobber 2007).

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