Tour Operators and Operations

Development, Management and Responsibility

Jacqueline Holland, David Leslie

• Publisher: CAB International
• Year: 2017
• eBook ISBN: 9781780648255
• Topic: Business
• Subtopic: Hospitality, Travel & Tourism Industry
• Index: Business

With a focus on the creation and distribution of packaged holidays, this text covers the fundamentals of business and the relationship between tour operators and destinations. With particular reference to the sustainability of both parties, it reviews the impacts and influences of tour operations and practices on destinations within the overriding context of tour operator responsibility. It addresses the entirety of this key component of the tourism sector, and reflects the shift in recent years from traditional 'sun, sea and sand' holiday to more bespoke packages. Taking into account tour operators as a growing factor among the major emergent economies of the world, this book is: - The first textbook to provide such in-depth content of tour operators and operations.- Written by authors with industry, research and teaching experience.- A wealth of information regarding popular eco, nature and adventure trips, as well as myriad niche and special interest products.Full of international and highly topical case studies, exercises and discussion questions, Tour Operators and Operations: Development, Management and Responsibility is a fundamental text for students of tourism.

1 Introduction

This book aims to present a substantive foundation for the study and understanding of tour operators and their practice. These organizations operate within the wider sphere of tourism and thus it is pertinent to provide a brief overview on the development of tourism to establish the broader context within which these organizations primarily operate, which gives rise to the emergence and development of tour operations and their related opportunities and challenges.

There is no doubt that historically within any society there have been some people who have travelled for one reason or another, such as trade or out of curiosity. In earlier civilizations, such as the Roman Empire, affluent members of society travelled for recreation and education, while other members of society travelled for the purposes of trade or spiritual fulfilment (see O’Gorman, 2010). In general, little changed for more than a millennium, until the development of mechanization and what is generally termed the Industrial Revolution circa 1780–1880, leading to industrial, economic and social transformations. The overall impact on society was substantial and laid the foundations and conditions for the working life patterns of today’s industrial/post-industrial societies. It was during that period that the fundamental conditions for the development of tourism, as we know it today, were laid. This is nowhere more apparent than in the UK, which has long been considered the cradle of industrialization. Therefore, the following overview of the early development of tourism and tour operators is by default predominantly UK based and to a lesser extent Eurocentric. This historical perspective of early developments in travel is remarkably similar to what has subsequently happened in other countries, albeit more quickly, as tourism demand grew. However, first we should clarify two key terms central to this book.

Two Key Terms

First, what do we mean by tourism? While there are many interpretations, one that is particularly appropriate is that presented by Przeclawski, who stated that tourism ‘in its broad sense, is the sum of the phenomena pertaining to spatial mobility, connected with a voluntary, temporary change of place, the rhythm of life and its environment, and involving personal contact with the visited environment (natural, cultural or social)’ (1993, p. 10). A key reason to adopt this definition is that this conveys that the tourist has a sense of involvement with the destination, which is not just limited to the physical attractiveness of the locale. The second term we must clarify is that of a ‘tourist’. Within these pages, we are concerned primarily with those people, i.e. tourists, seeking a temporary change of place for leisure, rather than tourists whose trip’s purpose is business, and the role of tour operators in facilitating such demand. This temporary change must involve a minimum of 24 hours away from home and in the case of international tourists include at least one destination in a country other than their own country of residence. Thus, the trip taken may be for a few days or an extended holiday.

Fundamental Conditions

As noted previously, it was during the 19th century that the fundamental conditions for tourism demand were founded. First, employment that does not tie a person to the land for their livelihood. Second, the income/salary needs to be sufficient to allow for disposable income, which is discretionary spending once all the basic needs have been met. The third condition is that of leisure time, i.e. time free from work (or other time-based commitment), which must be of a sufficiently long period to enable absence from the home environment for a minimum of 24 hours. These factors are all constraints on demand and as these ease then demand for tourism in general increases. But the easing of these constraints of time – increased leisure time – and disposable income together with transportation all take time.

In effect, as the economy of a country develops, invariably through industrialization generating employment and in due process the establishment of holiday pay and rising disposable income, so more people in society can participate. As such, what was once generally restricted to the privileged members of society and those whose business required travel becomes over time increasingly accessible to all members of society, the democratization of tourism.

However, for demand to increase and tourism to develop to any substantial degree, there is a requirement for some form of efficient mass transportation. This came into being with the development of the railways, which for decades were the primary provision for that most essential of components for tours and subsequently the development of package holidays. Surprising as it may seem, given its significance, transportation in tourism gained remarkably little attention in tourism studies for many years (see Lumsden and Page, 2004). In the absence of transport, tourism would not have developed temporally and spatially in the ways that it has, enabling today’s millions of international leisure tourists to undertake a holiday at a time and to a place that is both suitable and convenient for them.

Transportation

The railways were the earliest mass transportation method and enabled the emergence of travel agents to facilitate groups of people travelling in relative ease and safety to tourist destinations. These were predominantly seaside locations, which in comparison with their home environments were perceived to be unspoilt, attractive and safe and, depending on the prevailing climatic conditions at the time of the visit, to enjoy good weather. Thus, we can identify, albeit predominantly in the UK, the rise of pleasure-seeking holidays to the rapidly developing seaside resorts of the 19th century for the masses, and for the leisured classes trips to spas on continental Europe, the Rivieras of Italy and France, and by the late 19th century, ski trips. It was also during this period and well into the 20th century that ships started to play an important role as a major means of transportation, often integrated with the railways, for international tourists. They could also be combined to create a ‘package holiday’ as exemplified by the emergence of cruise ships, which were popular among the affluent classes in the 19th century. Transportation has the potential to be an integral element of the trip itself, for example rail travel involving long scenic journeys and/or the grandeur of renowned trains such as the Orient Express.

Essentially, as demand gradually increased then so too tourism developed and with it the emergence of tour operators, whose products initially often took the form of guided tours to historical and cultural destinations. The oft-cited exemplar during those early years is Thomas Cook (UK), which is credited as being the first tour operator to create an international package tour, involving a trip to Paris from the UK. In effect, the leisured classes tended to set the travel trends and, as opportunity developed, the professional and middle classes then imitated the leisured classes, followed by the working classes as their disposable income increased and comparative costs declined.

Other modes of transportation were also developing after the 1920s. Travel by coach provided opportunities for tour operators to create package trips for organized groups predominantly to seaside resorts but also other parts of a country. These trips were often based around visiting cultural attractions, e.g. Bath and York, but also viewing the countryside, e.g. the Highlands and Islands of Scotland or the Lake District of England. By the late 1930s, a clear pattern of tourist travel had emerged, mainly to well-established resorts served by the railways and via a developing network of coach operators to access destinations not served by the train, such as trips to the countryside as well as more urban, cultural destinations. After the 1940s, coach tour operations expanded and experienced their most popular period during the late 1960s/1970s, although coach tours are still very much part of the tour operating sector in many countries. Over the same period, car ownership began to grow, providing opportunities for more independent travel and in due course becoming the predominant mode of transport for domestic tourism.

This pattern of tourism development is largely manifest in most countries as their economy grows and develops.

Rise of Air Travel

The next substantive development in tourist travel was the availability of air travel, from the 1940s, which was greatly facilitated by the expansion of commercial airlines and scheduled flights. This was a significant factor in the development of hitherto popular, low-key destinations such as Cuba and the Caribbean primarily for the American market, and the southern coasts of Spain and France in the case of the European market. As demand grew from the early 1950s, subsequently burgeoning in the 1960s as the previously identified key constraints eased in the major economies of the world, then so too tour operators developed and increased in number in this rapidly growing, competitive marketplace. This enabled the larger tour operators to operate on a volume basis, based on high customer numbers and lower prices. Also, the major players could negotiate block bookings of accommodation and seats with scheduled airlines. But airlines retained control of availability, choice of destination and significantly the subsequent pricing of the tour package – factors that catalysed the introduction of charter flights by tour operators, enabling operators to have greater flexibility of destinations and, more importantly, control of costs. These charter flights also served to help tour operators get around bilateral agreements between the governing agencies of different countries over agreed routes and thus air travel prices on those routes.

In time, major operators sought to develop partnerships with carriers and ultimately incorporate such operations under their own management. In combination, these factors generated a mass tourist market by the 1980s based on comparatively low cost, popular destinations, well developed for tourists and predominantly comprising ‘sun, sand and sea’ (3S) based package holidays. Such holidays were basically passive and invariably based on one destination.

A significant underpinning to the successful development of this mass market, and tourist travel arrangements more generally, is that of ease of access to the destination.

Ease of Access

A key point to note is that of the speed of transportation and thus ease of access in the creation and development of destinations. In general, tourists do not want to be spending significant proportions of their holiday time or short break accessing their destination. Thus, development and expansion of rail and air transportation have increasingly enabled tourists to be able to travel further, faster, more cheaply and with relative ease. It may well have taken a couple of hours to reach a seaside resort in the 1950s by train or car, but by the 1970s a similar time could be involved in air travel to the southern coast of Spain – whether from the UK or northern/eastern areas of Europe. This was in itself a significant factor contributing to growing demand for package holidays on the north Mediterranean coast. It is also the most influential factor in accounting for the growth in demand for travel to long-haul destinations, for example, UK to Australia or Beijing to Vancouver.

Since the 1950s, government attention to tourism, based on its perceived economic benefits, led to the establishment of national tourist organizations (NTOs). The main objective of these NTOs was, and is, to maximize demand for their country and region respectively, especially so in times of recession; witness the EU’s ongoing policy on promoting tourism (Leslie, 2011). Destinations are in competition – more so in today’s increasingly competitive marketplace, which catalysed the emergence of destination marketing and the creation of destination marketing organizations (DMOs): exemplars of this are ‘The Big Apple’ and ‘I love New York’ slogans of the 1970s. As Kotler et al. expressed so well 25 years ago, and which is equally applicable now, if destinations want tourists, then ‘Places must learn how to think more like businesses, development of products, markets and customers’ (1993, p. 346). This is perhaps nowhere more evident today than in the bidding processes involved in a destination seeking to host one of the seemingly ever-expanding array of international sporting events, e.g. the Olympic Games, World Cup Football Tournament, Commonwealth Games, Asia Games, and cultural events such as the Eurovision Song Contest. These developments all present additional opportunities for tour operators. Thus, although the popularity of the 3S package tour may be in decline, alternative opportunities are increasing and, in part at least, are facilitated by the increasing ease of access to the destinations involved.

Developments and Expansion

As the speed of air travel increased and access to airports improved, thereby reducing travel time, then demand for destinations further afield grew. This enabled the expansion of tourism to new destinations. The key point here is that as new tourist destinations emerge, often initially promoted by small tour operators operating in niche markets, they become more fashionable and demand increases, so such destinations become attractive potential markets for further development by the more mainstream operators. For example, Antarctica, which was once a destination for explorers and scientists, is now a fashionable tourist destination receiving thousands of visitors a year, largely fuelled by its increasing popularity as a cruise destination (Lück et al., 2010). It is not surprising therefore that over the past half century we have seen dynamic expansion of tourism around the globe. Indeed, the number of airline passengers has virtually doubled every 15 years since 1971, a process that has been greatly furthered by airline deregulation (first in the USA and then Europe) and cheaper air fares and low-cost airlines (Calder and Lynas, 2005). The dramatic reworking of the traditional airline business model by these low-cost airlines brought new opportunities to consumers, with their low prices and convenient regional departure points, along with a frequency of service never seen before. They have enabled consumers to enjoy experiences that they previously could or would not have done; for instance, UK residents jetting off to European cities for ‘hen’ and ‘stag’ parties. Indeed, statistical evidence indicates that the increasing numbers of air passengers shows no sign of slowing down but rather substantial and continued growth; for example, it has been forecast that there will be 7 billion passengers by 2034 (IATA, 2016). Overall, greater free time, access to credit, the internet and low-cost airlines have all combined to produce today’s ‘wherever – whenever’ consumer societies.

International Tourist Flows

The ever-expanding distances travelled by tourists can be compared with the ripples caused by a stone dropped into a still pond. The strongest ripples are close to the epicentre and may be considered to represent domestic tourism demand, while as those ripples expand and weaken they represent the generation of international demand. Thus the general pattern over time for tourists is to visit destinations within their locale, within the country and then to other nearby countries, expanding further afield as primarily transportation systems have enabled ever further travel in comparatively shorter times. In many ways the pattern of de...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Acknowledgements
• Selected Supporting Websites
• 1 Introduction
• 2 The Package Holiday and the Rise of the Tour Operator
• 3 The Operating Environment
• 4 Product Development
• 5 Small and Medium-sized Tour Operators
• 6 Customer Service
• 7 Financial Planning: Pricing the Package
• 8 Tour Operators and Key Travel Regulations
• 9 Distribution (Place)
• 10 Marketing
• 11 Human Resources and Managing the Workforce
• 12 Crisis Management
• 13 Challenges and Issues: A Look Ahead
• Index
• Back Cover