CHAPTER 1

The travel services sector is made up of a complex web of relationships between a

variety of suppliers, tourism products, destination marketing organizations, tour
operators, and travel agents, among many others. 

For many years, however, the tourism industry was classified into eight sectors:
accommodations, adventure and recreation, attractions, events and conferences,
food and beverage, tourism services, transportation, and travel trade .

Characteristics of A1 tours and travel company’s services :

Tourism products are mainly service products or services that have several
characteristics. The tourism products’ characteristics can be intangibility,
inseparability, perishability, variability, etc.

For example, serving food to visitors and providing convention centers is the service
that a hotel offers.

Cultural attraction in the form of dances and music can be seen and enjoyed, they are
offered to enjoy for a particular time and season and these are perishable and variable.

thus, the characteristics of their products are different from other products. Below are
the characteristics of their services :

Intangibility:

Commodities are tangible products that have physical dimensions and attributes which
can be seen, touched, tasted. While tourism product is intangible and cannot be seen,
touched, or measured but can only be experienced. The tourism products can be
anything like a package tour, an airline ticket, or sitting in a hotel.

Intangibility means the product that cannot be directly seen, tasted, felt, or heard prior
to the purchase and consumption. The only tangible items we get before purchase are
the tickets or receipts for payment we have done.

For example, when you book an airline ticket, you received only the PNR number but
you are unable to see or taste the airlines.

Inseparability:
Consumer products, for example, a motorcycle manufactured in Delhi can be
brought to a Mumbai outlet and sold there. In the case of the tourism industry,
the products are mostly services. These services cannot be separated from the
person or the company that provides them. The service is inseparable and the
product exists only when the consumption takes place.

The production and consumption of the product occur simultaneously and cannot be
separated. The tourist has to go to the site of production to utilize the product.

For example, the courtesy shown by an air hostess while serving a meal on board can
only be experienced in the aircraft by the passenger. Not before or afterward as the
production and consumption cannot be separated.

Perishable:

Any tangible good or product can be manufacture and stored for a certain period of
time. Also, it can be sold or used at a later date.

For example, pens can be manufacture, stored in the warehouse for a few months, and
can be sold when there is a demand.

However, we cannot store the tourism products in a warehouse and sell them at a later
date.

For example, the airline cannot store 100 unsold seats of a flight scheduled to depart
on 12 March 2017 and sell them on 13 March 2017. The unsold seats have no value at
all.

Thus, the service industry faces such problems due to fluctuating demands, as demand
for air travel is more in the morning and evening, or in some sectors which are heavily
booked, while in other sectors, seats may remain unsold.

To avoid the loss of unsold products and overcome losses incurred due to the
perishable nature of the product, the airlines offer last-minute sales or standby rates at
drastically reduced rates. These rates indicate that although they are not getting profit,
instead they are minimizing losses and at least earn some revenue.

Therefore, due to perishable in nature, the hotel industry also offers heavy discounts,
especially during off-seasons.

Variability/heterogeneity:
In the tourism industry, services are rendered by humans to humans. These services
have a high level of variability when producer and consumer interact.

The human element makes standardization of the product a difficult task. The services
rendered vary from person to person and from time to time.

The guide’s or escort behavior may not be consistent every single day. Family
problems, ill health, or stress may affect his/her interest in the job, concentration in
his/her work, and ultimately his/her performance.

To avoid variation in services and to maintain the standards in the delivery of the
products, the hotel industry, tour operators, and airlines have Introduced a
computerized reservation system (CSR). Such systems minimize human contact and
errors.

Absence of Ownership:

If you buy a computer, the ownership of the computer is transferred to you. But when
you hire a car, you buy the right to be transported to a predetermined destination at a
predetermined price. The tourist or consumer cannot own the car or the driver of the
car. The same is the case with the hotel industry. The hotel rooms can be used by
tourists during the hotel stay. The tourist only acquires the right to certain benefits that
the seller or hotel offers. But the owner of the rooms remains with the hotel.

For example, you used the conference hall of the hotel for a specific time or period.
But you do not own the conference hall.

Manufactured by Many Producers:

In the case of tangible products, one manufacture produces a total product. In the
tourism industry, the tourist’s product cannot be provided by a single enterprise. Each
of the components of the tourist product is highly specialized and when combined
together makes the final product.

Various types of hotel industry produce guest nights or hotel rooms, and airlines fly
passengers as their products. The travel agents’ products are the booking of airlines or
hotels. In the case of a museum or an archaeological site, the product is measured on
the basis of the number of visitors who visited the site on that day.

Highly Unstable Demand/Seasonal Product:

The demand for tourist services depends on many factors. Such factors can be climate
or season, the economy of the destination, political factors, social factors, etc. Except
for the seasonal factor, all other factors can be made favorable. The season is a factor
that affects tourism greatly.

Seasonality means the time period when the tourist visits the tourist destination
frequently for a limited period of the year. Almost all tourist areas have a short season
which is popular as a peak season which often may be short as three months.

This seasonal usage of the product creates unemployment and also has an impact on
transportation and hospitality services as well as most other services.

To tackle the problems of seasonality and unstable demand, the suppliers of tourism
services have different pricing strategies. For example, the hotel tariff will be higher
in peak season, in mid-season it will be moderate, and in the off-season, the rates of
the product will be very low, i.e. off-season discounts are offered to combat the
problem of seasonality.

In short, the characteristics of their services are intangible, inseparable, perishable,

heterogenous, absence of the owner, produced by various manufacturers, and the
demand is not at all stable.

The 7 Ps of Marketing for A1 Tours

and Travel agency

The service marketing mix is also referred to as an extended marketing mix that is an essential
part of any service marketing plan. It assumes that the service is a product but adds 3 more Ps
which are integral to optimum service delivery.

Product
This P refers to a product that a consumer needs and wants to buy and is at the heart of
the marketing mix. In the traditional sense, the product is tangible. However, typically, in
the service industry, your product is not easy to examine and scrutinize – it is almost
always intangible.
Your service product thus needs to be designed carefully. What most successful tour
and activity operators do is conduct service blueprinting in order to properly define their
services.

Price
This P involves working out a price for your business that is profitable, attractive to
customers, and competitive in your niche. Pricing also depends on multiple other factors
like:

 The geographic location of the destination.

 Seasonality, which is arguably the most important factor in pricing.
 Competitor pricing.
 Government regulations.

The travel and tourism industry responds to its highly complex pricing at two levels. The
first one deals with marketing strategy which consists of product positioning, long term
returns on investments, cost-effectiveness, etc.

The second one pertains to the marketing operations or strategies where the prices are
manipulated to correspond with demand and competition.

All in all, your final pricing needs to take into consideration labor, material, and overhead
costs. Adding a profit mark-up to that gives you your final service price. You could also
charge extra for customer-friendly options like shuttle services.

Promotion
Promotion is how customers find out about your tour operation business. It is the
different ways you communicate, sell, and describe your services. So when you create
your promotional messages, you need to use terms that highlight the benefits of your
services as opposed to its features.

Tourism companies need to inform and persuade potential customers. The right
promotion will determine how you maximize the frequency of visits. Promotion in the
tourism industry primarily focuses on four effective methods: Advertising, publicity, sales
promotions, and word-of-mouth.
Advertising
You need to advertise to give important information to prospective tourists. The goal is
to create awareness of your tour and activity offers by using visual scenes of events,
venues, and activities as your main tools. For example, you can advertise visuals of
beautiful cathedrals, white water rafting, relaxing massages, etc.

Publicity
Publicity is another major marketing tool. Building relationships with media people will
help project a positive image of your tour operation to your prospective customers. Your
publicity strategy could include regular stories and photos in newspapers, travel
publications, blogs, social media, etc.

Sales Promotion
Sales promotions of short-term activities in order to boost sales during peak demand
seasons are also a good way for you to gain market share. Promotions are particularly
helpful if you are launching a new offer. The main tools could be seasonal offers or
special sales (e.g. for activities during the week or during the low season).

Word-Of-Mouth
Word-of-mouth is arguably one of the most important and most effective promotional
tools. However, to succeed in using it, you need to provide quality services. You also
need to keep an eye out for opinion leaders or influencers; and take care of them so
that they can promote your service via word of mouth. Nowadays the leader of online
word-of-mouth is definitely TripAdvisor. Check out this article to improve your
TripAdvisor ranking quickly. 

Place
Place is where your customers buy your service and how you enable them to view and
evaluate it. You should think about how to best reach your customer base, how they will
consume your service, and when they make their purchasing decision.

Since your services are largely intangible, your best bet may be to sell exclusively
online. The good news is that you can use various distribution strategies that reflect
your objectives.
Physical Evidence
The main problem with services is that the customer cannot test it out before purchasing
them – they cannot be produced until they are needed. It is thus important for you to
offer other means by which a potential customer can make an informed decision on the
value and quality of your service without making an actual commitment to buy it.

You can highlight testimonials from previous customers in brochures and make use of
images. If you operate from a physical office, you should make sure that the space
accurately exhibits the nature or branding of your business in the design and layout of
the space.

Tourist attractions can be expensive for most customers so it is important that you make
it more tangible for them by highlighting tangible items like the canoe they will sit in, the
Segway they will use, route maps, etc. in your marketing materials.

Brochures, in particular, are important in showing how different elements of your

offerings are well thought out. So you should include all the relevant information that a
customer needs to know in order to gauge value.

People
The service industry relies heavily on professionalism and customer service. In services
marketing, customers have difficulty differentiating between the person they engage
with and the actual service. That shows that customer care is absolutely critical for your
business. So any employee that has a customer-facing role must be properly trained for
the position.

A lot of tour operators are actively focused on training their staff in interpersonal skills,
customer service as well as customer satisfaction. They also need to be trained to have
extensive knowledge of your product.

Want to know how to recruit the best tour guides? Read our blog article on how to
differentiate between good and bad tour guides.

Processes
This refers to the different stages of a process to deliver a service to a customer.
Services often need to be booked in advance in order to deliver the service to customer
expectations and requirements; unlike tangible goods which are kept in stock and ready
for purchase at any time.

As a tour and activity operator, you need to ensure that all stages of the processes
preceding delivery of your service are planned and executed as well as possible.

The typical operation process for most tour and activity operators is as follows:

Tour information: The information regarding travel must be provided at a convenient

location where a prospective customer can seek information about their tour.

Preparing itineraries: This is the series of operations that are required to plan a tour.

Liaising with service providers: Before travel is sold to a customer, contracts have to be

in place with the providers of various services including transportation companies,
hotels, coaches for sightseeing, etc.

Planning and costing tours: When the contracts and arrangements are finalized, then
you can start planning and costing the tour. That will depend on the tour selected as
well as individual requirements.

Ticketing: This typically involves online reservation systems and booking software.