Factors Influencing Passengers' Travel Decisions And Thomas Cook's Strategy Essay.

Thomas Cook is the world’s best-known name in travel, thanks to the inspiration and dedication of a single man. Thomas Cook began his international travel company in 1841, with a successful one-day rail excursion at a shilling a head from Leicester to Loughborough on 5 July. From these humble beginnings Thomas Cook launched a whole new kind of company – devoted to helping Britons see the world. Today, Thomas Cook Group plc is one of the world leading leisure travel groups, with sales of over £9 billion and more than 20 million customers. The group is supported by 27,000 employees and operates from 17 countries. It is number one or two in all its core markets. Thomas Cook vision is to deliver trusted, personalised holiday experiences through our high-tech, high-touch strategy. They will be there for the customers wherever, whenever and however they want to connect with us. Thomas Cooks timeless spirit of innovation started in 1841 and it is this that makes them stand out from the crowd. It is reflected in their new, trusted products and growing suite of online tools and applications (such as Advisor and Dream Capture). Innovation shaped their past and it will continue to shape our future.

You have recently joined Thomas Cook as a new travel consultant. As part of your probation you have been asked by your line manager to write a report on the airline, travel agents and tour operation within the travel and tourism sector in the company. Your report should cover the following elements:

1. Analyse the factors that can influence passengers travel decisions. Discuss how a transport operator such as Thomas Cook might use these factors to attract future passengers.

• Appeal
• Convenience
• Prior experience
• Price
• Purpose of trip

2. Using a PESTEL analysis evaluate how Thomas Cook can respond to the changing external influences in the industry.

• Complete detailed PESTEL analysis mapping external opportunities and threats that could determine the strategic direction of the organisation.

3. Tour operators develop markets and operate group travel programs that provide a complete travel experience for one price. Investigate the tour operations industry within the travel and tourism sector.

• Different types of tour operators; outbound operators, inbound operators, domestic operators, specialist operators, mass market operators and direct sell operators.
• Industry structure; structure of businesses, major operators, independent operators, market share and products and services to meet different services.
• Relevant legislations and role of trade bodies; EU Package Travel Directive, ABTA, FTO, AITO

4. (a) Describe the retail travel environment that Thomas Cook Operates in.
(b) Examine the different types of travel agencies and the relationships that exist within retail agents.

• The different types of retail agencies
• Products and services provided
• The relationships that exists within retail agencies; vertical and
• horizontal integration, preferred agents and agency agreements

Factors that Can Influence Passengers' Travel Decisions

Thomas Cook is among the best in world’s tourism industry. Started in 1841, Thomas Cook a 32years old cabinet-maker used to walk from his home in Market Harborough to the neighboring town of Leicester to attend a temperance meeting. Thomas Cooks footmark currently enlarge to over 223 locations including 21 airport counters in 85 cities covering India, Mauritius Sri Lanka and is braced by a strong partner network of 91 Gold Circle Partners and 81 Preferred Sales Agents in 87 cities over India (Thomascook.com, 2017). The chosen tour and travel operator is Thomas Cook. This helps us understand about the hospitality industry. The hospitality industry falls under a larger enterprise known as travel and tourism industry. This industry comprise of a huge group of business with one goal in center that is to give wanted or desired products and services to travelers. Travel and tourism industry has now become the biggest civilian industry in the world, however, statistics states that one out of every ten person all around the world is part of the Travel and tourism industry. The primary objective of this report is to describe about the airline, travel agents and tour operation within the travel and tourism sector in a company. Here the factors are also elaborated that actually helps the passengers while taking their decisions regarding choosing an operator. PESTEL analysis of the chosen company has done that shows how the company deals with the approaching opportunities and threats to stick to the market. The tour operations, travel environment and different travel agencies are elaborated in the following paragraphs.

In spite of the considerations for traveling that are unique for every individual, the studies and industry experience state that there are atypical factors that strongly effect those decisions. Though the industry has evolved over the past 30 or more years of deregulation, the choices given to the consumers have also changed. There are two main factors of choices, which dominate the research and the study and they are the quality of air services, which includes availability, frequency, capacity, and routing, and another one is pricing, which includes airfare, taxation and ancillary fees (Chang 2013).

Thomas cook as a transport operation must use the factors that could attract operators. First, the focus of the transport operator is offering a special appeal to its passengers like the quality, value, location and the exceptional services that attract the customers in the tourism market. The airline market is one that always seeking to create and fill niches. Appeal actually helps the travel operators fill the gaps in the market to a specific group of potential customers. Tour industry now includes specialty tours focused on people who want to combine a tour experience with activities like walking, golfing, bicycling, sampling wines, cuisines, pub beers connecting only with a specific group of people. Some travel operators have even organized special tours for the disabled (Murphy 2013).

Thomas Cook's Strategy for Attracting Passengers

Then another factor that can also help is route availability and convenience. A number of studies have shown that convenience is a major factor in the choice of airlines because of the way airline networks are organized; with only a restricted number of airlines working from any one airport and with different routes from that airport, the passenger choice of airlines is actually restricted. In most cases, passengers will have the choice of one or a few airlines at the beginning and wanted destination and may have to accept shift for some services. Therefore, the choice of airline is a two-stage problem, with the origin and destination chooses first, and a choice of satisfying airline selected afterward (Clav 2015).

Air ticket pricing is one of the most complex pricing strategies, called the yield-management. Airlines modify their ticket prices in advance to the flight departure strive to earn the maximum profit. A number of powerful factors on ticket pricing been reported those are the type of air route, flight time, airline market power on the air routes, historical price and the number of unsold seats. The advantage of the method based on these factors is that the only origin of dynamic information is available in the booking system. Nevertheless, it does not reflect the influence of ticket pricing on passenger choice behavior.

However, in reality it seems important for airlines to contemplate explicitly behavioral responses of passengers to ticket pricing. It is thus highly important for airlines to include passenger choice behavior in the calculation of ticket pricing (Masiero and Nicolau 2012).

Passenger previous experiences also matters and helps in attracting them in future. Good experience always adds loyalty to the brand and competition being so high, loyalty adds to future benefits. Passengers want their share of comfort on a plane like a safe airplane, experienced pilots, a decent ticket price, and a variety of departure times and options. Passengers must get respectful treatments; have well organized boarding process, recurrent flyer benefits, and a smooth flying experience. When the passengers experienced all of these from any travel operator, they are likely to consider this travel operation when planning any trip in future (Williams and Lew 2014).

Lastly, the motive of the passengers is there that actually helps them decide their tour. People have various reasons for travelling. Some travel for their healthy body, physical relaxation and welfare. Others travel for relaxing their mind to get recreation. Majority of beings love travelling in order to learn about other cultures and tradition. Many people travel to meet up their family, friends and relatives who stay far away. Some has to travel for business purposes or to take part in some festivals or ceremonies. Traveling to religious places can also be important to decide on the trips (Evans, Stonehouse and Campbell 2012).

PESTLE Analysis of Thomas Cook's Strategy

The PESTEL structure actually categorizes environmental influences into six types, which are political, economical, social, technological, environmental and legal. Thus, PESTEL is a mnemonic. The PESTEL structure helps the managers understand the main drivers of change and the differential impact of the external influences and drivers on the industry, markets and individual organizations.

PESTEL analysis also mentioned as PEST analysis, which is a notion in marketing principles. Besides this is also used as an instrument by companies to follow the environment they are handling or those new projects that they are planning to launch (Robinson et al. 2016).

Noticeable governmental pressures faced by the tourism and travel industry in UK. It can be said that there is the introduction of tourism and bedroom tax. Accordingly, England is currently the highest tourist destination in Europe.

As travel and tourism influences demands, costs, prices and profits thus the economic factors are of concern for them. Income decreases or rises in package holidays thus they are income elastic business; it can have a notable effect on the demand. Hence, public sector cuts are probable to have a vital result on the travel and tourism industry. Consumer disposable income been affected by weakened global travel all over Europe due to weak economies. Add on as fluctuating oil prices, currency rates and an increasing rate of unemployment, had also imparted a negative impact.

As most individuals desire to travel for refreshment the need for services from tourism and travel industry increases. This determines disposal income, which increase spending, and socialization.

The most strong example technology is the emergence and advancement of the internet, which took forward the reduction in costs and increased operational efficiency inside the tourism business and airports. Because of the betterment of internet, there is increasing closeness between tour operators and clients and improving satisfaction for both parties. Major technologies other than internet, that aid the constant development of the tourism industry is those executed by transportation, which is becoming safer, faster and more appealing. The technological executions within tourism operations have guided to changes in working behavior and with an outcome in increase of demand for labor force, involving educational institutions to place more emphasis for teaching tourism (Sigala and Chalkiti 2014).

People’s make their decisions are easier and free with the help of the internet. Since this accomplishment can happen by using updated and altered technologies, the aspiration of Thomas Cook to remain among the top-grade online service providers remains a continuous challenge.

Tour Operators in the Travel and Tourism Sector

Today the most talked about matter is preserving the environment, thus environmental responsibility has become part of the factors that decide a tour operator's prosperity. As stated by global warming 2020, aviation which transports so many tourists across the globe are of huge responsibility for those who are trying to protect the environment. A major worry for the tourism industry is greenhouse gas emissions and their deduction for change in climate. Aviation produces at the minimum two percent of emissions. The aviation industry is working on this problem by launching newer planes that have fuel-efficient engines. Therefore, less carbon is discharged. Although not all airlines mainly among the poorer countries can afford purchasing new aircraft (Yüksel 2012).

In 2011, the volcanic ash clouds affected the travel in Europe. Swine flu noted in Mexico and terrorism somewhere affected tourism traffic negatively.

Legal factors are outer elements that mention how the law influences the way businesses work and customers behave. Product transportation, profit margins, and viability of certain markets are examples of certain things, which may affect legal factors.

There were reduction on the high cost of visa enrollment in the United Kingdom; air passenger duty could attract more bookings with Thomas cook. However, there is some political turmoil in some key holiday destination for Thomas cook.

Apart from these, certain other outer Opportunities and threats affect Thomas cook. The opportunities are that combined tour packages can be booked online. There are growing globally. Latest quarter earnings manifest positive financial turnaround possible with cost saving initiatives. However, many people see the 9/11 event as extreme which could offer Thomas Cook with a chance to capture a larger market share (Sigala, Christoz and Gretzel 2012).

The possible threats are Euro zone economic unpredictability, underneath profitability, and originating competitions from low-cost carriers. As with changing global and local environment, the age of technology holds a huge challenge for the company. The use of technology has decreased the gap between large tourist organizations like Thomas Cook and smaller competition. The size of the Thomas cook is due to integration and acquisitions are threatening (Horner and Swarbrooke 2016).

The various types of tour operators who provide a full-fledged travel experience are discussed below-

Outbound travel operators are those operators who take their customers to some foreign countries. They either plan their own trip or work in a partnership with the inbound operators in the foreign destination. Few outbound operators rely on the trips already planned by the inbound operators and trade them to their own customers. These operators keep a track of the demands in his native market and concentrates on the customers seeking travel opportunities to a foreign country (Mosselaer, Duim and Wijk 2012).

Inbound travel operators expertise in arranging travels packages for both individual clients and travelling in a group. They plan trips for customers coming from a different country. Inbound travel operators come into existence to help the customers who have language issues since they are visiting a different country. They provide services like airport pick-up as well as drop, assigning local guides and arrangement for food and lodging (Cetin and Yarcan 2017).

Domestic operators deal with the customers travelling across their own country. They generally plan trips for clients who are travelling in groups. Domestic operators may or may not provide services like food or lodging during the trip (Ghimire 2013).

Specialist travel operators are those travel operators who plan unique travel experiences with a group of clients who have a similar interest. Specialist tour operators organize the whole trip including the food and lodging. The tour guides of specialist operators may work with the professional guides to enrich the travel activities and experiences. They are entitled to charge higher than the normal rates (Buckley and Mossaz 2016).

Mass markets operators are those operators who organizes tours for a specific group of people. They provide all the essential services in relation to the trip such as food and lodging, guides and activities. Mass market Operators generally opts for affordable mode of transports and shortest routes. A mass-market operator should have knowledge about the operations in related organizations, whether they are conflicting with each other (Ghimire 2013).

Direct selling deals with selling the products and services directly to the buyer and not from a fixed geographical location. Direct sales operators are those operators that deal with direct selling of packages to the customers. Demonstration is carried out in one to one basis, generally in a location, which is preferable to the customer, for example his/her home or office (Busby and Huang 2012).

• Providing the transportation facilities to the client is an essential part of tourism and is an integral point in shaping the business structure.
• After taking care of the transportation of the clients, the tourism manager should take a good care for arranging the accommodation and food (optional) for its customers. The type of food and lodging to be provided should be mentioned before hand in the tour package.
• Assigning a tour guide is also an important part of the business structure.
• The tourism organization generally needs to buy the travel merchandise in bulk amounts, which includes tickets, hotels and services.
• Government plays a major role in the business structure of tourism. Government plays an important role in promotion and regulation.
• The advertisement and the package details should be attracting enough to lure the customers to choose a particular travel destination.
• Travel agents assigned should be experienced enough to provide an uninterrupted services to the customers. They are the ones who are responsible for creating a good impression of the tourism organization in front of the tourist. They should be satisfied enough to plan their next tour with the same tourism company. Hence, the travel agent should have a proper experience in dealing with different types of customers (Benckendorff and Zehrer 2013).

The major operators are inbound, outbound and domestic operators. Independent operators are those travel operators who do not work under any company or organization but work all by themselves in planning and organizing tours (Kimbu and Ngoasong 2013).

United Kingdom is among the largest tourist producing countries in the world. UK has an increasing per capita income and a strong currency, which makes UK to be counted among the top ten spenders for spending in outbound tourism. The expenditure would most probably reach to $80 million within three years.

Tourism related products and services include transportation, accommodation, assigning tour operators and travel agents and providing tourism information services (Nunkoo and Ramkissoon 2013).

The new EU package includes three different types of travel package combination.

• Pre-arranged packages include a combination of transport, food and lodging and certain other services, which include car rental and certain activities.
• Customized packages enable customers to choose the services he/she wants and make their own package.
• Linked-travel arrangements enable a tourist to book an add-on service along with the existing package. The booking is to be preferably made within a day.

ABTA stands for Association of British Travel Agents. It is UK biggest travel and trade association for tour operators as well as travel agents. ABTA ensures support and protection to enjoy a hassle free travel experience. Once a holiday package is booked through ABTA, the tourist can expect an amazing travel experience.

FTO stands for “Federation of Tour Operators”. FTO has merged with ABTA in 2008 and is in charge of the overseas holidays. They maintain the safety standard and hygiene related issues of the tourist overseas (KhairatP0F and Maher 2012).

AITO stands for Association of Independent Tour Operators. They organize overseas holiday trips with a high professionalism level and an excellent quality of services. AITO symbolizes 122 Independent travel Operators of Britain (Manente, Minghetti and Mingotto 2012).

In retail travel environment, customer service is a very significant part. In this competitive world, different strategies are to be undertaken in order to achieve the desirable advantage in this competitive world. Thomas cook adopted different marketing strategies in advertising his services in tours and travels. Inbound, outbound and domestic tourism is endorsed rally well. Thomas cook provides various services to his customers, which gives him an upper hand in the market of tourism. Tourist attraction is necessary to enhance the growth of business. Thomas cook enables online booking of packages and services. This helps in the business growth in an increased rate. In today world, online service booking is one of the most important features as most of the people nowadays make use of internet to book services. Online service booking is a feature, which would never become obsolete. Thomas cook also enables booking personalized packages, which is a plus point in customers perspective. The customer can choose their packages and services according to their budget. Moreover, Cook provides customized services to every customer on their demand. Hence, customers trust lies with him and his agency. One of the important features of Cook retail travel environment is its online booking and sales. This feature is a trend because it enables the customer to choose from several offers and services. Thomas cook encourages organizational diversity by hiring employees with various ethnic backgrounds. He also encourages feedback programs to enhance the services and deal with the loopholes in the services, if any. His employees are thoroughly trained to provide uninterrupted services to the customers (Archer and Syratt 2012).

Work of travel agencies or retail agencies is to work as an agent, sell packages to the customers, and often guide them to choose one. There are quite a few different types of retail agencies such as, general state agencies, commercial, business travel agencies and cargo travel agencies, online and multi-destination travel agencies.

A product in relation to tourism is very different from the other products. Their products are generally composite with a clubbing of different services such as transport, food and lodging, entertainment and satisfaction of the customers. These entire product and services might be delivered to the customer by a single organization or by different service providers. Products in tourism are mainly based on attraction.

Vertical integration is the strategy undertaken by company to expand its business to various steps on the similar production graph. It helps the companies to cut down the cost by lowering the transportation costs and the turnaround ratio. Vertical integration can be of two types- forward and backward integration. In case of forward integration, company takes control of the supply chain from the very beginning and takes the charge of the further steps. The case is just the opposite for backward integration. In vertical integration, raw materials in converted into finished goods and is delivered to the customer and a single company does this. The major advantage of vertical integration is that the company does not have to depend on the suppliers, which in turn gives the company a competitive advantage over the others (Joskow 2012).

Horizontal integration is a strategy undertaken by the company to increase the production at a particular point of supply chain. It generally occurs, when two or more companies merger at a particular point of supply chain. Horizontal integration takes place only if the companies those are merging deal with similar products and services. The advantage of horizontal integration is that, it helps the companies achieve a sturdy market power (Janvier-James 2012).

Few travel agents earn the preferred tag and they receive highest credits according to the services they provide to the company. They are given such title because they exactly know how to do business and attract customers to choose their travel agency.

Agency agreements are referred to the norms that are followed strictly by travel agencies. Agreements are attached with the every packages being sold. Having an agency agreement is necessary to ensure that the right product is being sold and it reflects professionalism of the agency.

Conclusion

From the above discussions, it is concluded that Thomas cook operates one of leading travel agencies in the world. Various types of travel agencies and travel operators work in accordance to the service a customer demands. Market share of travel and tourism is huge. This industry deals with a number of different services clubbed together in a single package. Various retail agencies provide customized services. Online market holds a considerable position in tourism sector as it enables the customers to book packages according to his/her convenience. Travel and tourism sector sometimes enables vertical and horizontal integration to spread its business further. In this context, association of different tour agencies and operators such as AITO and FTO is discussed. However, ABTA holds the supreme power.

References

Archer, J. and Syratt, G., 2012. Manual of travel agency practice. Routledge.

Benckendorff, P. and Zehrer, A., 2013. A network analysis of tourism research. Annals of Tourism Research,43, pp.121-149.

Buckley, R. and Mossaz, A.C., 2016. Decision making by specialist luxury travel agents.Tourism Management,55, pp.133-138.

Busby, G. and Huang, R., 2012. Integration, intermediation and tourism higher education: Conceptual understanding in the curriculum.Tourism Management,33(1), pp.108-115.

Cetin, G. and Yarcan, S., 2017. The professional relationship between tour guides and tour operators. Scandinavian Journal of Hospitality and Tourism, pp.1-13.

Chang, Y.C., 2013. Factors affecting airport access mode choice for elderly air passengers.Transportation research part E: logistics and transportation review,57, pp.105-112.

Clav, S.A., Saladi, & Ograve, Cort-Jim, I., Young, A.F. and Young, R., 2015. How different are tourists who decide to travel to a mature destination because of the existence of a low-cost carrier route? Journal of Air Transport Management, 42, pp.213-218.

Evans, N., Stonehouse, G. and Campbell, D., 2012. Strategic management for travel and tourism. Taylor & Francis.

Ghimire, K.B., 2013.The native tourist: Mass tourism within developing countries. Routledge.

Horner, S. and Swarbrooke, J., 2016.Consumer behaviour in tourism. Routledge.

Janvier-James, A.M., 2012. A new introduction to supply chains and supply chain management: Definitions and theories perspective.International Business Research,5(1), p.194.

Joskow, P.L., 2012. Vertical integration. The Antitrust Bulletin, 57(3), pp.545-586.

KhairatP0F, G. and Maher, A., 2012. Integrating sustainability into tour operator business: An innovative approach in sustainable tourism. Tourismos: An international multidisciplinary journal of tourism,7(1), pp.213-233.

Kimbu, A.N. and Ngoasong, M.Z., 2013. Centralised decentralisation of tourism development: a network perspective. Annals of Tourism Research, 40, pp.235-259.

Manente, M., Minghetti, V. and Mingotto, E., 2012. Ranking assessment systems for responsible tourism products and corporate social responsibility practices.Anatolia,23(1), pp.75-89.

Masiero, L. and Nicolau, J.L., 2012. Tourism market segmentation based on price sensitivity: Finding similar price preferences on tourism activities. Journal of Travel Research, 51(4), pp.426-435.

Murphy, P.E., 2013. Tourism: A community approach (RLE Tourism). Routledge.

Nunkoo, R. and Ramkissoon, H., 2013. Travelers' E-purchase intent of tourism products and services. Journal of Hospitality Marketing & Management, 22(5), pp.505-529.

Robinson, P., Fallon, P., Cameron, H. and Crotts, J.C. eds., 2016. Operations management in the travel industry. CABI.

Sigala, M. and Chalkiti, K., 2014. Investigating the exploitation of web 2.0 for knowledge management in the Greek tourism industry: An utilisation–importance analysis. Computers in Human Behavior, 30. 800-812.

Sigala, M., Christou, E. and Gretzel, U. eds., 2012. Social media in travel, tourism and hospitality: Theory, practice and cases. Ashgate Publishing, Ltd..

Thomascook.com. (2017).Thomas Cook History. [online] Available at: https://www.thomascook.com/thomas-cook-history/ [Accessed 27 Jun. 2017].

Van De Mosselaer, F., Van Der Duim, R. and Van Wijk, J., 2012. Outbound tour operators.Tour Enterp Sustain Agenda Across Europe, 71.

Williams, S. and Lew, A.A., 2014.Tourism geography: critical understandings of place, space and experience. Routledge.

Y, ?., 2012. Developing a multi-criteria decision making model for PESTEL analysis. International Journal of Business and Management, 7(24), p.52.