Tour Operators – Definition, Types, Roles & Characteristic

Types of tour operator

Table of Contents

Tour Operators – Definition, Types, Roles & Characteristic

Tour operators links between customers (tourists) and primary service providers. This acts as a major destination promoter and this is also called a wholesaler. It is a professional agent with the capacity of buying services in bulk and distributing through the channel in
methodical and organized manner.

It is essential to understand the meaning of tour operators. It is an organization and firm or company with the experience and capacity to buy individual travel components separately from different suppliers and assemble them into attractive packages by adding a mark-up. It is sold in different price tags to customers directly or through the middlemen (Travel Agent).

Tour operator is largely responsible for the delivery of services as per the contract in the tour itinerary. Tour operator is a professionally managed company with expertise and experience in planning and operating pre-paid and pre-planned packages for vacationers or business travelers.

Tour operators sign long-term contracts with air carriers, hotels, cruise liners, and other suppliers for the provision of bulk travel services. Individual travel services are assembled into different tour packages highlighting round-trip transportation, accommodations, ground transportation, and sightseeing. Tour operators are accountable to consumers for the provision of travel services for each tour package. Tour operators are the organizers of package holidays and they make annual contracts with hoteliers, airlines, and ground transport companies. They print brochures displaying each component of services.

Tour operators generally provide the services independently and tours are conducted at the cities where the offices are located. However, these services can be arranged through the other suppliers at various places. Package tours are retailed through travel agencies or directly to customers. However, a tour operator may have readymade or tailor-made packages as per the trends of the market. The distribution of package tour business passes through various stages.

A tour operator buys (or owns in some cases) a high volume of travel services like carriers, accommodation, and services. These services are then assembled into packages for purchase by consumers. Packages are sold via travel agents (independent or owned) or through the phone and internet. The figure presents the dominant roles of tour operators.

Types of Tour operator

Definitions of Tour Operator

Poyther (1993) defines, “tour operator is  one who has the responsibility of putting the tour ingredients together, marketing it, making reservations and handling actual operation.”

Holloway (1992) stated that tour operations undertake a distinct function in the tourism industry, they purchase separate elements of tourism products/services and combine them into a package tour which they sell directly or indirectly to the tourists.

Nature of Primary Activities of Different Tour Operators

➢ Inbound – Describing places of importance of the country
➢ Outbound – Highlighting holidays in other countries
➢ Domestic – Specializing in domestic holidays within the country
➢ Specialist – Special interest travel to destinations
➢ Independent- Specialized in specific holiday
➢ Integrated – Business Conglomerate
➢ Mass-market- Targeting more sale

Services are provided by the tour operates in the package tours

➢ Airport and hotel transfer
➢ Arrangements for traditional reception at the arrival points
➢ Arrangements of luggage transfer in the airport and railway stations
➢ Arrangements of guided sightseeing tours
➢ Options and selection for worldwide destination
➢ Comprehensive itinerary planning
➢ Appropriate hotel selection & reservation
➢ Meeting, conference, and meeting arrangements
➢ Exhibition and factory visits
➢ Theme parties, events & sightseeing
➢ Air tickets & travel documents like passport, VISA, health certificate and currency, insurance, and permits for entry into the restricted areas
➢ Foreign Exchange & Travel Insurance
➢ Experienced and professional tour guides, escorts, interpreters,s and tour managers
➢  Personalized services at destination
➢ Coordination with local tourist organizations at destination
➢ Domestic and international air travel
➢ Rail bookings in Nepal, Europe, America & Japan
➢ Hotel reservation
➢ Car rental
➢ Travel documentation
➢ Airport facilitation
➢ Foreign exchange
➢ Overseas travel insurance
➢ Conference and seminar management
➢ Trade Fair/Exhibition visits
➢ Implant Operations- in-house travel consultant equipped with CRS system and satellite ticket printer
➢ Business/trade delegations
➢ Incentive travel in Nepal and Worldwide

Types of Tour Operator

Tour operators are classified as they do tour business and area of operation of package tours. Each category of the tour operator is unique in its own ways of providing services. This classification is suggested to distinguish differences in meanings and functions. They are called inbound tour operators, outbound tour operators, domestic tour operators, specialist tour operators, and ground-tour operators. The figure presents travel trade intermediaries that include types of travel agencies and tour operators.

Types Tour Operator
Types Tour Operator

1. Inbound Tour Operator:

Tour operators who deal and handle directly inbound foreign tourists, provide them various services on their arrival and departure such as transfer, accommodation, transportation, sightseeing, entertainment, currency, insurance services, etc. are known as inbound tour operators.

These tour operators formulate tour packages individually or in collaboration with foreign tour operators. The packages may be marketed directly or by means of intermediaries. In fact, inbound tour operators are the ‘image’ builders of a country as they convert all touristic resources of a nation into a saleable commodity.

They also contribute valuable foreign exchange earnings to the economy of the host country. Recognizing the vital role played by inbound tour operators in the healthy growth and promotion of tourism, every nation has extended several financial and non-financial incentives to these operators.

2. Outbound Tour Operator:

These categories of operators are specialized in promoting and designing multi-national tours, especially in foreign countries. The outbound tour operator sells a package tour to an individual or a group of people of his own country to another country or a number of countries for a specific pre-decided period.

The outbound tour operator arranges travel documents, transportation to a central point where the tour starts, and contracts with inbound tour operators/ground operators to provide accommodation, transportation, local sightseeing, and other services as needed throughout the tour.

Generally, these operators work in liaison with the inbound tour operators/ground operators and offer services involving meeting inbound tour groups at the airport, transferring the tour group from the airport to the arranged place of accommodation in-town hotel, arranging/organizing local sightseeing that may be a single day or multi-day tour of the home state, region or area. These may be in the form of business or leisure-oriented tours.

3. Domestic Tour Operator:

Today, the domestic market has witnessed attractive growth rates as large players in the travel industry are aggressively entering and promoting this market. Leading tour operators usually focus on the international market where margins are higher but now, in addition, they are floating new packages to create a niche in this segment to tap the vast potential in the domestic market.

Even leading hotel chains are also receiving a healthier response in this context. In the UK, USA, Japan, India, China, and Hong Kong many tour operators are specialized in domestic holiday packages.

Generally, domestic tour operators operate within the boundary of their home country and cater to the diverse needs of individual and group travelers. They promote tour packages both through their own outlets and other retail travel agents. In fact, they are contributing to the cause of national integration.

4. Destination Management Companies/ Ground Operators:

These are commonly known as handling agencies and their main function is to organize tour arrangements for incoming tourists on behalf of overseas operators. When a tour operator himself promotes beach holidays, wildlife holidays, wildlife tours, heritage tours, cultural tours at different places, the difficulty arises.

It is the ground operator then who handles the incoming travelers in the same season but at different places ensures that the entire operation is according to the package tours or agreements. Sometimes when a handling agency is at a prominent tourist place, for example, Kathmandu, and it has to make arrangements to Pokhara, then it contracts (if it has no office of its own) with a local operator (known as excursion agent) to handle the arrangements on his behalf.

Roles and Characteristics Tour Operator

In this package tour market, tour operators showcase destinations through their unique package tours. Thomas Cook, American Express, and Cox and Kings follow the customer-driven approach for designing package tours to cater to the demands of customers. The roles of tour operators are given below.

➢ It is a wholesaler as it assembles packages as per the trend of market and capacity of distribution channel.
➢ It deals with customers directly as a principal-agent or foreign travel agent without off-loading tours to ground handling agents.
➢ The Tour operator has the liberty to amend the tour itinerary and program if it warrants.
➢ It invests much time and resources to chart out delightful and value-added tour itineraries for meeting the demand and expectations of tourists.
➢ It gives much stress on selling the tour than the conducting the tour.
➢ Tour operators are mostly located in megacities or in the cities with international airlines services for the strategic advantage of controlling the package tours.
➢ It mostly provides international transfer from the hotel to the airport and vice-versa, if offices of tour operators are located.
➢ It deals with both the tourists and primary service providers as direct intermediaries.
➢ Tour operators design the tours in such a way that handling agents may not get extra excursion tours directly from tourists.
➢ It accepts the foreign currency for the tour package and gets accreditation from the Reserve Bank of India money exchange dealer.
➢ It gives ample importance to becoming a professional member of national and international tourism, travel, hospitality, and aviation associations.
➢ It is committed to working as a responsible partner in the tourism industry to popularize destinations and explore new potential destinations through its package tours.

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