Advance Planning

A look at operators annual schedules for planning, marketing and delivering holidays and variants that affect those schedules
Planning, negotiating, contracting, marketing and successfully administering a package holiday is a complex management task and takes place over a long period of time. For example prices are set and printed over a year in advance - despite the vagaries of exchange rates, inflation, fuel prices, etc. For someone taking a holiday in August 2004 the principal tour operator's events are as follows : LATE 2002 Planning which countries and resorts to use, and broadly how many holidays to offer Jan/Feb 2003 - Contracting with hoteliers and airlines May/April - 2003 Preparing brochures prices, photographs, descriptions etc May 2003 - Brochure launch November 2003 - Airline scheduling meetings to avoid congested flight timings February 2004 - Bookings received and forecasts for programmes reviewed. Early adjustments made if necessary March/April 2004 - Employ overseas staff, update training, finalise arrangements with hoteliers, coach operators etc May 2004 - Issue tickets and final invoice July 2004 - Confirm names of customers to airlines, hotels, overseas staff August 2004 - Welcome holidaymakers.

Most tour operators offer winter and summer programmes. The milestones for winter programmes which run from 1 November, will be similar to those for the summer, but with six month's difference on all the dates. Holiday Seasonality and Peak Season <="" Peak="" and="" Seasonality=""> The end of July and beginning of August is frequently referred to as the peak season for holidays. For overseas package holidays this is not entirely correct. Tour operators charter an aircraft for the entire season for weekly flights from May to October and then set the brochure prices to ensure that they fill all the seats on the aircraft every week. The success of tour operators in achieving this objective is demonstrated by arrival figures which show that there is very little weekly variation throughout the entire season.

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Tour Operators and Travel Agents

An explanation of the roles and functions of tour operators and travel agents.
Sometimes there is confusion over the difference in functions of tour operators and travel agents. Tour operators are the organisers and providers of package holidays. They make contracts with hoteliers, airlines and ground transport companies then print brochures advertising the holidays that they have assembled. Travel agents give advice and sell and administer the bookings for a number of tour operators. It is estimated that there are some 7,000 travel agency shops ranging size from the multiples, with several hundred outlets each, to the individual shop. Some travel agents also undertake tour operating - be it on a small scale, eg a local agent packaging a group holiday for a local club, or on a larger scale - most famously by the legendary Thomas Cook, who was the first tour operator, and Sir Henry Lunn (Lunn Poly) who is widely credited with "inventing" skiing as a leisure activity. Agents can also sell the 'components' (flights, ferry bookings, car hire etc) for those who travel independently. Although most package holidays are sold through travel agents a significant and growing percentage are sold direct to the consumer through advertising - Teletex, TV Travel Shops and the internet. ABTA - The Travel Association - represents both travel agents and tour operators. The Federation of Tour Operators represents only tour operators- its members have c.70% of the market. All current FTO members are also members of ABTA, and the two organisations work closely together - with the FTO particularly active with overseas governments and suppliers.

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Operations
Hotel Contracting, why overbookings can occur, and how operators manage supply and demand
Regrettably, hotel overbooking very occasionally occurs. This section explains how tour operators contract rooms, how they work to protect their customers - and why it is not true that, say, German holidaymakers fare better! Hotel costs are a substantial proportion of the brochure price of a holiday - usually around 40 - 50 per cent for a typical holiday to Spain. Negotiating with hoteliers begins over a year before customers arrive. There are two types of contracts used. With the so-called allocation or sale and return contract, tour operators only pay the hotelier for the beds they use. For example, they may contract 100 beds weekly but use and pay for 80 beds one week, 70 beds another and 100 the next week. An alternative is the fixed (or guaranteed) contract, where the tour operator pays for a fixed number of beds throughout the season, irrespective of how many are sold. With a fixed contract the risk to the tour operator is obviously increased. Typically, 50 per cent of contracted beds are fixed, but this can rise to nearly 100 per cent when a destination is in very high demand.

Allocation contracts however are also popular with hoteliers. They usually do business with several tour operators from different countries, and - using judgement based on experience over many years - normally they contract for slightly more beds than they have available. This is also common practice amongst business hotels and scheduled airlines. As tour operators vary in their success in selling an individual hotel, the hotelier is able to have a very high occupancy rate, which keeps prices competitive for the customer. Tour Operators do not overbook. Once a holiday is booked, it is taken off the market. Allocation contracts usually include a clause requiring the tour operator to confirm the number of beds sold several weeks before the customers arrive. This enables the hotelier to sell off any beds not required, or to stop the tour operator from taking late bookings if the hotel is full. Overall this system works well for holidaymakers, hoteliers and tour operators. Problems can occur however, when there is an unexpected increase in demand from the main despatching countries - principally Germany and the UK. Even then, hotels should be able to avoid overbooking problems. At its quarterly meetings the International Federation of Tour Operators (IFTO), compares booking trends for each of the major resort countries. Where there is a particularly strong demand for one destination, that country is alerted so that adjustments can be made to the beds allocated before the majority of bookings are taken. Occasionally, and regrettably, there are some isolated instances where hoteliers have excessively over contracted and/or do not heed the early warnings of unusually strong demand. Where this occurs close collaboration between IFTO, the national and resort tourism authorities - but principally between hoteliers and tour operators, can establish a clearing house for those hoteliers who have over-contracted. In this way rapid and practical action is taken to resolve immediate problems, and avert others arising. In some countries, hoteliers who persistently seriously over-contract face fines and disciplinary action from the authorities. Equally, FTO members will not wish to contract with hoteliers who let down their customers - so bringing strong commercial pressure to bear. Consolidation Each February tour operators have to ask themselves questions such as - how many people will want to fly with us from Birmingham to Rhodes every Tuesday from May to October next year? Clearly not an easy question to answer more than a year in advance but they must try to get it right or they will have to make expensive adjustments later. Inevitably when brochures go on sale some of these estimates will prove to be wrong. Prices may be too high or too low in comparison with competitors, the UK may experience a boom or a recession, Rhodes may receives good or bad publicity. Increasingly some customers now book late, which further complicates the situation. In some cases adjustments can be made: for example, contract another aircraft - larger, smaller or additional increase or reduce the number of beds contracted. On rare occasions however it may become clear that it will not be possible to meet the forecast by a wide margin. In these cases "consolidation" is carried out. This means that, for example, two planned flights of one tour operator to Rhodes from Birmingham and East Midlands are "consolidated" on to one flight from one of these airports or two tour operators will share a flight rather than operating separately as they originally planned. Flight delays Airport delays for both scheduled and charter airline services are a concern to passengers, their tour operators, and airlines alike. In summer 2003, the average delay

from UK airports was 20 minutes, with 8 per cent arriving or departing more than an hour late. By comparison, in summer 1997, the average delay was 38 minutes, with 18% being more than one hour late. FTO members work with other international tour operators to avoid congestion at popular holiday airports by staggering flight arrival times. They are also working with airlines and airports, in the UK and overseas, on a range of measures to lead to improvements. In addition the FTO is lobbying for increased investment in a modernised air traffic control system across Europe and more airport facilities. Furthermore, in the event of a significant flight delay, FTO members ensure that their customers are looked after. Customers will receive food & drink, as well as accommodation and other support, dependent upon the length of the delay.

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UK Operational support
How tour operators UK offices assist holidaymakers once their holiday is underway
More than 17 million inclusive tour passengers travel with FTO members each year. In order to ensure that help and assistance to both customers and resort teams is available 24 hours a day, the tour operators have dedicated teams of personnel based in the UK within a department commonly known as the Duty Office. It is their responsibility to provide support and advise on a variety of subject matters. The key functions of the Duty Office can be categorised into a number of headings as follows: Crisis Management The crisis affects a number of individuals, e.g. coach crash, air disaster, the Duty Office is the main link between resort and the UK. It is their responsibility to implement procedures to manage the crisis and to ensure the safety and wellbeing of the customers and staff whilst keeping the Directors, Press Office and other departments informed of the situation. In a crisis situation it may be necessary for the Duty Office to charter aircraft to repatriate customers, organise counselling for affected customers and staff parties, purchase additional accommodation and transport and authorise meals arrangements. Medical Assistance Some customers require medical attention whilst abroad. It is imperative that they receive the correct medical care and that their insurance cover is sufficient for the treatment required. The Duty Office acts as a liaison between the resort office and the insurance company to ensure that this is the case. If treatment can not be provided in resort, the Duty Office will assist the Insurance Company in repatriating the customers. In serious circumstances it may be necessary to be a support mechanism to the UK relatives and where appropriate arrange flight seats for them to travel to resort to be with their next of kin. Sadly, some customers do pass away whilst on holiday and in these circumstances the Duty Office will liaise with the resort office, the insurance company, the next of kin regarding the repatriation of the body. Missed Departure The Duty Office assist their airport staff in finding alternative flight seats to holiday destinations in cases of missed departure. This may mean purchasing seats from other operators on a mutual aid basis.

Overbooking Accommodation On occasion hoteliers notify the tour operators that they have over booking situations in their properties and usually the pre departure administration teams manage this. However, if this notification is received on the day of departure, the Duty Office will act as a support mechanism to the resort office trying to solve the accommodation issues. Overbooking Flights In the event of a flight overbooking, the Duty Office will assist their airport staff in finding alternative flight seats to / from holiday destinations. This may mean purchasing seats from other operators on a mutual aid basis. In the event that it proves impossible to find a seat to the original UK departure airport, the Duty Office will arrange transfers for the customers on arrival in the UK back to their original airport. Cash Advances For a nominal administration fee The Duty Office have the facility to provide emergency cash advances. Customers can contact a friend or family member and ask them to call the Duty Office in order to arrange the advance. The amount to be advanced is debited from that persons credit card. UK Message Services The Duty Office is able to forward messages from families in the UK to customers on holiday. The message is passed to the resort office and delivered to the customers at their accommodation