TH1804

The Tour Operations Cycle

Tour operations is defined as “the cycle of preparing and implementing all the activities that comprise a tour
package as detailed in the itinerary, within a given time frame and within the estimated costs, generating the
projected revenues to meet the expectations of the paying client and attain set objectives” (Claravall, 2013).
Claravall (2013) defined the following terms as part of the definition of tour operations:
• Customer satisfaction – This means meeting the expectations of the clients, which is also the delivery
of the services requested by the traveler from the supplier as arranged by the intermediaries.
• Objectives – These are set during the planning stage of tour operations depending on the target
market, tour organization, area of operation, destination/s and/or local communities.
• Tour itinerary – This is a detailed plan for a journey, especially a list of places to visit, plan of travel, or
a book describing a route or routes of travel with information that is helpful to travelers.

The Tour Operations Cycle (Claravall, 2013)

1. Tour planning is the process of determining the objectives to be achieved by a tour operator.
2. Itinerary development is the process of building an itinerary and identifying and selecting the
suppliers best suited for providing the services required in the tour package.
3. Contracting rates is the process of negotiating and collating rates from a set of identified suppliers’
rates that are more competitive than published rates (regular rate of a service or product from
the supplier). On the other hand, contracted rates only occur when a supplier and a TA/TO are
negotiating on favorable terms and conditions. These are also where discounts off the published
rates can be negotiated.
4. Costing and pricing is the process of determining the costs of the various components, activities,
or services that are included in the tour package depending on the number of travelers that could
likely get the package.
5. Quotations are prepared for ad-hoc tour packages only and are prepared based on a required
minimum number of participants following the specific activities, inclusions, and requirements of
the client. This does not apply to regular tour packages.
6. Reservations and confirmations involve the process of placing advanced requests for available
space or services and obtaining confirmation of these requests.
7. Field operations cover the actual execution of all activities of the travelers from the moment of
arrival to the time of departure.
8. Billings and accounting involve the preparation of invoices for deposit payments and balance due
and the collection of payments due from the clients, preferably prior to the arrival, and the
payment due to all suppliers.
9. Evaluation is the process of comparing the organization’s performance with the actual results.
The success or failure of a destination’s or community’s promotions is measured by the increase
or decrease of visitor arrivals.

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 TH1804

Tour Planning
Tour planning is the process of determining the objectives of a tour, whether these involve customer
satisfaction, destination and community endorsement, and organizational promotions, or gain profit. When
planning a tour package, the objectives may include the following (Claravall, 2013):
• Promotions of a destination and community
• Endorsement of an organization or corporation
• Gain profit as a business.

There are two (2) types of objectives that should be considered in tour planning:
1) Destination-oriented objectives – These are connected to local government units (LGUs) or client-based
leisure entities. These are the following guide questions for meeting destination-oriented objectives
successfully:
o How accessible is the destination?
o What is the cost to reach the destination?
o How convenient is the mobility (or the ability to move or be moved freely and easily) within the
destination?
o Are there any alternatives if a certain mode of transportation is unavailable?
o What is the quantity and quality of accommodation and other facilities in the destination?
o What are the available varieties of food and beverage outlets?
o Are there support industries such as souvenir and handicraft shops?
o What is the degree of the development of the basic infrastructure (road conditions, water, water
sewage and drainage, and electricity)?
o How reliable are mobile communications and Wi-Fi connectivity?
o Do the banking facilities include automated teller machines (ATMs)?
o What are the attractions, sights, or activities that would best suit the clients’ profile and needs?
o Are those attractions, sights, or activities public sector-owned or privately owned?
o How positive is the local community’s attitude towards visitors?
o Are there cultural differences that need to be considered?
2) Corporate-goals objectives – These involve the enhancement of a travel agency or a tour operator’s
distinct image and are considered to be one’s perceived image in the market. This type of objectives aim
to:
o Retain existing clients by offering alternatives and attracting new clients
o Establish a reputation as a market leader and stand out among competitors
o Enhance the image as a pro-active travel agency or tour operator abreast perceived market trends
o Engage in public relations that could eventually generate word-of-mouth endorsement
o Increase financial returns and thus improve revenues.

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The fundamental elements of planning a cost-effective tour package are the following:
 Client profile – These are market variables, travel motivators, and types of travelers that a tour
operator has.
 Requested or proposed destinations – The characteristics of a particular destination are matched to
fit the needs of the market. A destination can be requested as both ad-hoc and regular tour packages.
 Duration – It should fit the client’s profile. For example, senior citizens don’t like to stay away from
home too long, while the young ones prefer to stay away longer from their school work.
 Category of accommodations – This depends primarily on the client’s budget and socio-economic
status.
 Meal plan – This comes along with what the destination has to offer. It also complements the
attractions or places to visit in a tour package. A tour package that includes a meal plan can already
be considered cost-effective. An example of this is Loboc River Cruise and Floating Restaurant in Bohol.
 Sightseeing or Activities – These depend on the characteristics and the type of tour package that the
tourist will choose, which can be either of the following:
o Requested – Sightseeing or activities that are for an ad-hoc tour package.
o Proposed – Sightseeing or activities that are for a regular tour package.
 Mode of transportation – This depends on the set of destinations included in a tour package. It can
be by land, air, sea, rail, or cruise.
 Ancillary services – These are additional services that can either be requested by the clients or made
available to make the tour more convenient for an extra cost. An example could be wheelchairs for
senior citizens or persons with disability (PWDs).
 Tour guide and tour escort services – These services refer to the tour guides and tour escorts who
oversee their clients while on tour and who are mostly needed by foreign clients. A tour guide or tour
escort is usually multilingual.
 Number of Free-of-Charge (FOC) allowed or required – This is always subject to the concession and
availability of services from the suppliers and number of participants. The present industry practice is
one (1) FOC for every 15 fully paid participants.
Additional terms to be considered in tour planning:
 Profit – This is the ultimate financial objective of tour planning.
 Pricing – This happens when one adds a mark-up to the actual tour cost.

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Itinerary Development
Itinerary development is defined as the process of building up the destinations and activities that will have be
arranged conveniently and chronologically. This is also a combination of an itinerary (or a planned route or
journey) that matches the clients’ profile during tour planning and the identification and selection of the
various suppliers of services (Claravall, 2013). Here are the guide questions for itinerary development:
o How developed are the short-listed and selected destinations?
o What is the degree of development for the basic infrastructure of the destination/s?
o How convenient is the connectivity between the places of origin going to the various destinations and
vice versa?
o What are the best modes of transportation for all destinations?
o Which supplier best fits the needs of clients and can help meet their expectations?
o Is the tour cost or convenience the basis for the selection of destinations and activities?
o Is there an alternative supplier who could also provide what the clients want or need?
o Are the tourist attractions and sights available year-round?
o Are there any restrictions for hands-on activities on any or all destinations?
o How reliable are the staff and equipment for those hands-on activities?
o Would the local language require a tour guide or tour escort to help interpret for the visitors?
o Are the service attitudes and quality of service staff at par with the acceptable standards?

Image source: https://chasingpammy.com/wp-content/uploads/2018/09/BUDGET-AND-ITINERARY.png

References:
Claravall, B. G. (2013). Travel and tour operations in the Philippines. Sampaloc, Manila: Accumiro I.T. Solutions.
Evans, N. (2015). Strategic management for travel and tourism. Taylor & Francis.

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