Module 2
Module 2
ITINERARY DEVELOPMENT
(Itinerary development- negotiations, confidential tariff, costing and pricing, market
strategies, brochure designing, printing and distribution, itinerary preparation for domestic
and international tourist.)
Itinerary
An itinerary is a key and significant component of a tour package. It may be an initial
itinerary or a final itinerary. Basically it is designed to identify the origin, destination and all
the enroute stopping points along with the transportation, accommodation and other services
on a travelers trip an itinerary has various portions and these portions are known as segments.
Practically, these segments are dependent on the type of journey undertaken by the tourist.
Moreover, itinerary shows the sequence of the various tour ingredients and provides essential
information such as assembling point, departure point, days of departure, duration of a tour,
legal requirements, features of a destinations, optional activities, and meal and perhaps can be
called as a central point for the success of a tour company. To be more effective tour
company needs to develop separate and distinctive itineraries for the tourists, tour managers,
tour escorts, vendors and tourist itineraries.
Features of Itinerary
Itinerary Development
Itinerary Planning, Development & Costing is the core business, the heartbeat of a
Tour Company. Tour packages are generated by carefully planning, developing and costing
an Itinerary. Poor itineraries result in dissatisfied tourists/Travellers who spend their
resources to for a memorable holiday.
Itinerary Planning
The complete time scale for a tour operating programme may be divided into the following
five stages :-
2) Hotel Negotiations
• Generally more informal
• Hotel agrees to guarantee accommodation based on receipt of the notification of booking
from the tour operator, whether by phone, mail fax or e-mail
• Long-term contracts can be blocking of rooms, attraction of providing the tour operator with
the lowest possible prices
Tour operator must also clarify a number of other facts; including :-
• Reservations and registration procedures
• Accommodation requirements for tour guide or representatives
• Handling procedures and fees charged for Porter
• Special facilities availabilities
• Languages spoken by hotel staff
• Systems of payment by guest of drinks or other extras
• Reassurance on suitable fire and safety precautions
3) Ancillary Services
• Inbound tour operators and coach companies to provide coach transfers between airport and
hotels
• Car rental companies’ commission
Confidential tariff
A confidential tariff is a booklet containing the wholesale prices of hotel rooms and
tours. The travel agency or reservation desk marks these up by anywhere from 10 to 40
percent. It's "confidential" because the travellers certainly aren't supposed to know what the
real price is. Your best bet is to check the Internet price and then contact a travel agent;
sometimes the promotion on the Net is close to the wholesale price, and sometimes it's
substantially more.
Fixed costs do not vary in the short run, but it varies in the long run. For example, the
cost remains to be the same no matter how many rooms are occupied in particular day. It does
201 not matter it is 1 or 20 passengers. But the costs would be the same. Variable costs
change in short run as well as in the long run also. It varies as per the variation of the sale of
package tours. Table presents the difference between fixed and variable costs pertaining to
the various activities.
The cost for developing a package tour decides the final price of the package. The sale
of the package tour is a direct function of direct or indirect costs or fixed and variable costs.
The tour cost is explained as the sum total of cost incurred to combine related and
complementary services. For example, SOTC as a tour wholesaler examines affordability of
potential customers and various cost components
Profit margin is added after due consideration of purchasing power of buyers and
costs involved in designing the package tours. Furthermore, market demand determines the
cost of tour packages and tour operators make all possible ways to make the services
arranged in a very negotiable rate with the principal service providers. There is usual
variation of doing the calculation of costs from one tour operator to another. These are the
following variable costs apart from the fixed costs.
The cost is incurred for discovery of new destination and development of new
packages. It includes the cost for preparing documents for planning. Tour operators incur the
cost on their familiarization tour. The development of new packages needs allocation of
cost.
1. Transfer Cost
International and domestic airfares, rail travel, and transfer and departure tariffs are
included in the cost component in case of the all-inclusive package tour.
2. Accommodation Cost
Accommodation cost is expected to be around 30 per cent of the total cost that is
decided after the negotiations accommodation companies.
3. Sightseeing Costs
Sightseeing cost includes the cost of guide, entry free, refreshments, coach, etc. The
calculation is done on per head basis.
The cost of managing the preparation of itinerary and package tour is incurred. This is
an indirect cost or implicit cost. The cost includes salary and incentives, insurance,
financial or legal expenses and recruitment and selection cost.
The technical cost includes the acquisition of new software, hardware, and computers
for the reservation of air tickets and tour packages.
The cost of training the staff is incurred form the revenue of the tour company. Front
line executives are given in-house training with the help of external or internal trainers,
whereas the managers are send for outhouse training to learn the strategic business
decisions.
7. Cost Marketing
The cost marketing is incurred from the budget for marketing. Marketing cost
includes advertising and sales promotion for diversification of the package tour business.
The cost of printing tour brochures is incurred for designing and printing multiple
copies of the tour brochure on coloured glossy papers highlighting the tour itinerary and
other important features of package tours.
The cost is also incurred to repay the rate of interest and principal for borrowing loans
from the banks.
The cost is incurred for the depreciation of fixed assets in the long run due to the
obsolete nature of software and hardware, and electronic gadgets.
This cost includes porter age charges at airports and railway stations, tips at hotels or
airports, entrance fees, insurance premiums, gifts, and welcome dinners. Thus, while
costing a product, the tour company should concentrate on the four pivots namely- cost
consciousness, cost measurement, cost responsibility and cost improvement.
A package tour business is carried with the help of methodical planning and
controlling of various down and upspring resources. The price tag of the package tour is
decided on the basis of the positioning and branding. Tour operators use the methods of
marginal pricing after examining the market trends. The operational costs and margin of
profit is thoroughly examined by the tour operators to decide the price of the package.
Tour operators have the absolute freedom to zero in the price tag on the basis of mark-
up and buying power of the potential buyers. 197 Some of the essential elements of the cost
factor in the package tour business include mark-up, net rate, and gross profit. Mark-up is the
extra amount which the company can maintain on each sale. Tour operators have the best
bargain ability while negotiating with the suppliers of services in order to secure services at
the cheapest possible cost
The net rate is the price that a supplier charges based on which prices for package
tours can be decided. Any amount of mark-up can be added before arriving at the final rate
meant for the buyers. The commission constitutes a major share of earnings in tour operation.
b. Total cost
Total cost, in economics, the sum of all costs incurred by a firm in producing a
certain level of output.
c. Mark up cost
In order to earn profits the travel agents and tour operators add a mark up to
the total cost before quoting the price to the client. Generally, 7 to 15% commission.
Rate of return pricing is a method by which a company fixes the price of the
product in such a way that it ultimately helps organisations in achieving the ultimate
goal or return on the capital employed.
B. Market oriented pricing strategies
That means companies determine the price of the goods and services by taking
into consideration the cost of the product and services of their competitors. They
determine the price either the same as the price of their competitor or close to the
amount of the products of their competitor.
1. Discriminatory pricing
5. Bundle pricing
Bundle pricing is a business strategy where companies group several products
together into a bundle and sell them at a single price, rather than attribute individual
prices to each item. This means that a bundle is now an individual product.
6. Yield management
Yield management is a variable pricing strategy, based on understanding,
anticipating and influencing consumer behavior in order to maximize revenue or
profits from a fixed, time-limited resource (such as airline seats or hotel room
reservations or advertising inventory).
7. Going rate pricing
Going rate pricing is when a business sets the price of its product or service
based on the market price. This pricing strategy is often used to price similar products,
like commodities or generic items, that have little variation in design and function.
8. Loss-leader pricing
A loss leader (also leader) is a pricing strategy where a product is sold at a
price below its market cost to stimulate other sales of more profitable goods or
services. With this sales promotion/marketing strategy, a "leader" is any popular
article, i.e., sold at a normal price.
C. Product line pricing strategies
Product line pricing involves the separation of goods and services into cost categories
in order to create various perceived quality levels in the minds of consumers. You might
also hear product line pricing referred to as price lining, but they refer to the same
practice.
D. Industry/competition oriented pricing strategies
A method of pricing in which a manufacturer's price is determined more by the price
of a similar product sold by a powerful competitor than by considerations of consumer
demand and cost of production; also referred to as Competition-Based Pricing.
1. Tender pricing
Tender Price means the amount indicated by a Bidder as the lowest amount for which
that Bidder is prepared to perform the Contract.
2. Differentiated Pricing
The pricing strategy is commonly used in the hospitality and service sectors where
prices fluctuate a lot such as those airline tickets or hotel accommodations you were
looking at in our opening example. It can also be used in industries such as restaurants or
establishments with admissions or ticket fees.
A pricing worksheet reflects the distribution of cost components in the package tour.
For example, when Rs 10,000 is the final price of one tour package, the costs of the elements
of services in the package is divided into direct and indirect costs. Out of the gross margin of
profit, nine per cent is spent on administrative cost.
The indirect costs comprising costs on advertising, sales promotion, and publicity
constitute five per cent. Thus, a tour operator can make a profit of around fifteen per cent on
each sale of the package tour that includes 196 th commission or override from the principal
service providers. The average profit made on package holidays is extremely slender. Many
non-travel companies supplying consumer products achieve a net margin on sales turnover of
10 - 12 per cent.
After ascertaining the cost of a tour package, tour operator analyses exchange rates,
estimates future selling price and finalises the price of a particular package. The tour price is
not solely determined in terms of the cost but on the basis of expected rate of return, market
share and competitors’ price. There are different approaches to fix the price of package tour
such as total cost and marginal cost method, breakeven pricing, rate of return pricing,
skimming, penetration, going rate, differential etc.
Market strategies
Strategy is a general plan to achieve one or more long-term or overall goals under
conditions of uncertainty.
A marketing strategy refers to a business's overall game plan for reaching prospective
consumers and turning them into customers of their products or services. A marketing
strategy contains the company's value proposition, key brand messaging, data on target
customer demographics, and other high-level elements.
Strengths and Weaknesses are internal factors that you can control, like your team,
resources, and location. In contrast, Opportunities and Threats are external factors that
come and go randomly, leaving you with no other choice but to react and adapt — such
as travel trends, economic downturns, and your competitor landscape.
B. Value Proposition
After doing your SWOT Analysis, you should have a general idea of your value
proposition — which is a simple statement that answers why someone should book with
you instead of your competitors. Essentially, it’s what sets your travel business apart
based on the desirable attributes you bring to the experience.
Your value proposition is the most important piece in your marketing strategy, as it
dictates your messaging and ultimately serves as the first thing guests look at when
evaluating your brand with the “what’s in it for me?” mindset. That’s why it should be
front and center on your homepage.
But it can be difficult narrowing down all of your unique qualities into one or two
sentences. So, your best bet is to compile a list of features and benefits, along with the
emotional value for each, and see if there are any obvious patterns.
C. Guest Personas
Thinking of them as a real person before check-in will make it so much easier to craft
personalized marketing messages they won’t be able to resist. Plus, you’ll know the best
way to reach them. No more unanswered ads!
1. Start by combing through your booking data for common demographics like age,
gender, geolocation, and language
2. Refer to Face book Audience Insights for psychographics, such as interests and
hobbies, lifestyle, and online spending behaviour
3. Send out a guest survey to get more details
Now, you might only require one guest persona, but if you offer multiple experiences
that appeal to different types of people, like tourism products for senior citizens, it’s best
to segment your guests into a few personas seeing as your marketing tactics will change
accordingly.
D. Competitor Profiles
The travel industry is tight-knit, so much so that you can even turn your
competitors into partners. But that doesn’t mean you can’t still keep tabs on them.
Knowing what your rivals are doing is the best way to gain a competitive
edge. Not only does it give you valuable insight into their strengths and weaknesses so
that you can see how you stack up, but it also helps you stay one step ahead since you
can spot potential threats and opportunities before they happen.
Similar to a guest persona, you can create a profile for your top three
competitors, which should include the following marketing information:
E. Marketing Mix
A tourism marketing mix is a combination of factors you can control to influence a
guest’s decision to book with you. Think of it as a broad guideline for how to market
travel and tours so that everything works together seamlessly.
Historically, there are 7ps of tourism marketing, but since tourism operators are unique
in the products and services they provide, we’ve stretched it to include eight.
What is a tourism marketing mix?
1. Product
2. Place
3. Price
4. Promotion
5. People
6. Planning
7. Processes
8. Proof
F. Budget & Resources
Your marketing budget should cover all costs needed to market your product or
service, so that includes things like print advertising, promotions, demonstrations,
exhibitions, public relations, social media, free product sampling or giveaways and costs
to cover Google AdWords etc.
G. Goals, Metrics & Activities
Goals
Increase organic website traffic 40% by the end of 2021 from getting 1000
visitors per month from Google.
Metrics
Goal metrics let you clearly define how a goal will be measured. For example,
a sales team's performance can be measured based on the number of leads they get or the
revenue amount. There are two goal metric types: Amount and Count. The Amount
metric type can be a money value, an integer, or a decimal number. The Count metric
type is an integer. For example, you can use the Amount (money) goal metric to track the
revenues from all active opportunities or sales orders. An integer type can be used to
track sales calls made by a salesperson. A decimal number can represent a product sold
by weight, such as grain or sugar.
Activities
For each goal you set, figure out one key activity that’ll help you hit it. Don’t
be afraid to think big here. By that, I mean, come up with a significant marketing project
that you and your team can chip away at — more on that in the next step.
H. Marketing Roadmap
After you’ve assigned an activity per goal, break each one down into smaller,
manageable tasks to complete from quarter to quarter. Using the example above, let’s say
you decide to start a blog as your key activity.
In Q1, you’d get the ball rolling with a few foundation tasks. So, for building a blog,
you might start with the following:
Tour Brochure
Travel brochures describe a destination, hotel, service or tour with the intention of
promotion. You can use them as mailings to prospective customers, include them in
brochure racks and have them available at your office or business location. As travelers
often collect brochures and other literature when planning a holiday, brochures can be very
effective marketing tools. You must, however, be sure to include all the necessary
information and plan your inclusions carefully.Things should include in travel brochures
are:-
1. A Good Cover
This is the first thing that people will see and it should immediately answer three
questions: 1. Who is advertising? (your business) 2. Where you are located? 3. What are you
selling? Make the cover visually compelling and keep it simple. Use professional quality
images.
Tell your potential customers not only what you are offering, but why they will enjoy
it. This will require knowledge of your target audience, so research this if you haven't
already. Create a personal message to that audience letting them know why they specifically
should participate in your offering.
3. Call to Action
Your brochure should focus on one specific objective. If you are announcing new
offerings, make sure the brochure explains them and their benefits. A brochure that is
intended to describe a travel product should be detailed and provide plenty of pictures and
descriptions. You should include a statement telling people what you want them to do next
and how they can become involved.
4. Product Explanation
List not only the facilities and activities available to your guests but also any public
sites that they may be able to take advantage of during their stay. Entertainment is an
important part of travel, so be sure you include all the fun things your guests will experience
with your travel product.
6. Geographic Information
List the address, contact details and a map to help people find you. If you are located
in a place that is difficult to get to, include comprehensive directions. Include your website
address if you have one.
7. Pictures
Travel is a very visual product category. People want to see where they are going and
only high quality professional images can achieve this. Include several photos that best
showcases your product. Be careful, however, not to mislead people by using old phots or
pictures that misrepresent your offerings.
Brochure Designing
Photos are probably the most important part of your travel brochure. The photos will draw a
reader in and help them picture themselves at the travel destination. You don't want to skimp
here; if the photos look cheap, then the destination will look cheap. It's also important to
know what to showcase.
The colors of your travel brochure play an important role in how it will be received. The
color scheme will likely be the first thing about the brochure that people notice, so it will help
to be familiar with the psychological effects that colors have on us. You want to match the
feel of your brochure to the destination you're promoting.
When it comes to the text, or copy, of your travel brochure, being descriptive is key. You
want to paint a picture and make it clear that this is a place that your readers have to see. To
illustrate this point, let's compare two bits of copy describing the city of San Francisco:
A. Visit San Francisco today! It's a really fun place, and there is a lot to see. You can walk on
the Golden Gate Bridge and even see Chinatown! You're sure to enjoy your visit. Book your
vacation today!
B. Book a vacation to the most picturesque city in America! San Francisco has so much to
offer. Enjoy the refreshing bay breeze as you bike across the famous Golden Gate Bridge,
and experience the charm of a bustling downtown section full of world-class restaurants. Or,
if you prefer a quiet getaway, take a stroll to the Palace of Fine Arts to admire its striking
Greek architecture and serene waterways. And that's just getting started. Contact us today to
arrange your stay.
If you're in a hurry or don't have a lot of design experience, a template can save you a lot of
trouble and give you a very professional-looking travel brochure. Using Lucid press, you can
pick a template that fits your destination and then customize it any way you'd like.
Printing of Brochures
Brochures are often printed using four-color process on thick, glossy paper to give an
impression of quality. Compared with a flyer, a brochure usually uses higher-quality paper,
more colour, and is folded.
Distribution of Brochures
A whole stack of brochures will not do you any good until you get them into the right
hands. General mailing services give you a very low return on investment, while giving your
brochure to a target audience will be much more rewarding. So how do you find your target
audience? Here are a few suggestions.
The most effective distribution of brochures can be reached when you focus in on
your target audience. Knowing your target audience is the first step. Then you will know
where are the best locations to place your brochures.
Itinerary preparation for Domestic and International Tourist
Types of Itinerary
Tourists’ itinerary
Tourists’ itinerary is given to a particular tourist for his reference as part of the
package tour. A tourist expects the tour to be organised as per the itinerary mentioned in the
package tour he/she has purchased. It is important to check its feasibility. Generally planners
organise FAM trips in advance to have the feel of the itinerary and identify the limitations
and they are rectified before they are incorporated into a package tour and made available for
the reference of the tourists. Hence tour planners should take into consideration various
aspects such as purpose of tour, budget, accommodation, transportation, choice of
destinations and attractions, activities at destinations, legal issues, host and guest behaviour
and so on. They may also keep certain things as optional.
Basically, a tourist itinerary is a reference for the tourist to follow during his journey
like points of halt, hotel, time taken between two points, meal plans, activities, attractions to
visit etc. apart from arrival and departure points/time and check-in check-out time. Tour
operators are expected to strictly follow the itinerary. If they intend to change or modify it
that should be only in the interest of safety and security of the guests. And they should take
their client into confidence before doing that.
The role of tour manager is crucial to any package tour as he/she has to perform
different duties from planning to actual operation of the tour continously on the spot.
Professional expertise, knowledge of different travel issues, crisis management and his/her
own personal experiences matter a lot in organising a tour. Tour manager’s itinerary includes
the complete details of the whole tour from day one to the last day. Apart from the general
details as listed in a tourist’s itinerary a tour managers itinerary also carries information about
alternative arrangements, contact details, quick references, differential rates and tariff details,
details of coach drivers and escorts and guides. This helps him/her to have complete control
over the smooth conduct of the tour as well as to execute contingency plans if required at
times.
An escort or guide should know in detail where the group is being taken to, what
activities and events are to be organised, time management of the tour and other group
details. Vast experience, knowledge of practical ground difficulties, presence of mind and
readiness to handle crisis of an escort or guide adds to the successful conduct of a tour. The
escorts being physically with the group/tourist all through the journey, they are more than
expected to deliver and keep the image of the company in high esteem.
Vendor’s itinerary
Vendors play a major role in delivering what is mentioned in the clients itinerary. Hence it is
unavoidable but to be aware of the specific parts of the itinerary so as to make the necessary
arrangements in advance and delivery to the fullest satisfaction of the guests when they arrive
at their place. For instance, a hotel may organise a surprise welcome event when the group
arrives as per the nature of the group and time of arrival, may offer special services and
enhance the service satisfaction and value addition. It is possible only if the vendors know at
least the specific part of clients itinerary which is expected from them.
A typical coach driver’s itinerary includes group arrival point and time, pickup points
and time, turn around points, restricted areas of driving, sightseeing activities, other
entertainment activities, parking spaces, entry points, drop-in points all with specific time.
For instance, it may be seen that at places a driver is asked to drive slow which is mentioned
in his itinerary so that tourist may have a better view of a monument and take photographs. A
copy of the client’s itinerary resembles a coach driver’s itinerary with the above mentioned
additional informations. This helps the driver in coordinating with the escort and managing
the group.
Do’s