Vertical And Horizontal Integration In Tourism.
Horizontal Integration is when two industries merge together; it is where one business which offers a product takes over another business who offers similar products. An example of horizontal integration is the First Choice Group and this is because they own First Choice Hypermarket as well as First Choice Travel Agency. The reason why they are part of the horizontal integration is because looking at the buying chain they are on the exact same level.
Vertical Integration
Vertical Integration is when one company expands its business into a variety of different areas; the company buys another similar organisation however it is on a different level of the chain. An example of vertical integration is Virgin Trains which is owned by Virgin Group and also in partnership with the stagecoach. In the travel industry two companies take over one another in order to find out different ways to sell their products and services to their customers.
A clear description of the trade and regularity body giving an explanation of their role and how they link to a tour operator:
ABTA is the UK travel trade association for tour operators and travel agencies; they have a responsibility which is to help their members grow their business in a sustainable way. ABTA has been around for more than 60 years and it is essential that customers look for the ABTA logo when booking their holidays. The reason for this is because if anything was to go wrong when they are abroad ABTA is there as their security so therefore they will be able to sort out the complaints. Fairness, reliability and expertise is what the ABTA brand stands for and over 1350 companies use ABTA.
FTO stands for the Federation of Tour Operators which ensures that UK outbound tour operators are interested in by people as well as providing about 90% of overseas package holidays which are sold in the UK. FTO has become more aware of sustainable tourism and responsible tourism that brings changes in the environment in all areas which are affecting holidays located overseas looking at the safety, hygiene and health requirements.
AITO stands for the Association of Independent Tour Operators who offers a high level of customer satisfaction; members who are part of AITO are all small companies which are independent. They all specialise in certain destinations and are owner managed. Tour operators have recently be involved with AITO, their role is to organise activities for different types of holidays including; city breaks, culture, luxury, sports and adventure.
CAA stands for the Civil Aviation Authority who is involved with the aviation police keeping charge of all airports; they also make sure that planes are safe before they take off. They ensure that all UK civil aviation standards are achieved and are responsible for four main areas which consists of; economic and airspace policy, consumer protection group, regulation and air safety group.
Explain each legal framework and give examples:
EU package travel regulations is a package holiday which has to be checked over before selling it to customers to see if it is under the EU law. A package holiday includes; transport, accommodation and excursions for example a trip to the museum or a tour guide. The travel regulations are clearly written so people can understand what cannot and be measured as a package holiday.
Trade description act is another law which states that it is wrong to give out false information to customers about a certain product or service. An example of this is a staff working in a travel agency has helped a couple book their honeymoon and has told them that they will be staying at a beach hotel so therefore they walk down the stairs of their room and outside is the path to the beach. The couple get there and does not recognise the area and this is because there is no beach around the area or at the hotel, this is false information about facilities which was given to the customers by a member of staff in a travel agency.
Consumer protection act all relates to safety and price, it protects all consumers from false pricing. This Act has three different rules to remember and they are; information must be basic and clear when it is given to all consumers, suppliers must all confirm any purchases made and if a package is wrong and they are not happy with the purchase consumers therefore need to be given a time in order to think and change their mind if it is needed.
ATOL licence stands for the Air Transport Operations Licence which is a UK Civil Aviation Authority (CAA) system which protects all people who have bought a package holiday as well as flights from a tour operator. ATOL protects customers from losing out on any money and offers and also covers accommodation and flights being booked as one.
D) A grid showing external influences that could affect Tour Operators with
examples:
Political
An example of this is terrorism, the Bali bombings on 12th October 2002 was a terrorist attack which happened on an Indonesian Island called Kuta. From this attack there were 202 deaths and the number of people that were injured was 240, everyone in Bali from the surrounding areas where the attack occurred shows pictures from the bombings and these have been kept to show others what really happened and how it affected everyone. Tour operators lost out on some money as they had to stop selling package holidays and flights to Bali because of the terrorist attacks, the number of visitors dropped a huge amount. It decreased from 33,000 people to 32,000 and now this year it has increased to 52,000.
Economic
An example of this is fuel prices from the aircrafts, if this increases then when customers book their holiday tickets this will then therefore increase as well. International Air Transport Association (IATA) updates their website now and again on prices of the jet fuel, prices all vary on where the fuel is bought for example the country and how long a flight will take. Tour operators are allowed to increase their prices as well as advertising new fuel supplements, prices can be adjusted now and again according to charges being made. Customers will be able to see a breakdown of their flight ticket when booking a holiday showing the different prices.
Social
An example of this is religion which has become really popular in the world today especially holiday trips abroad to religious cities. The most popular religious trip is to Lourdes in France, six million people visit a year to ask for healing either for themselves because they are sick or for family and friends who they love. Lourdes is where miracles can happen, visitors can renew their faith and bathe in the cold water where they go in naked with a towel wrapped around them but come out completely dry. Religious trips to the same country could affect tour operators when they book them because they could get bored after a while booking to the same country for their customers over and over again. However some tour operators may know little about religious trips which can lead to customers being very disappointed and not return back to that travel agent to book their holidays in the future.
Technological
An example of this is online booking using the internet either at home or at work, this saves customers going to the shop and booking their holiday. Checking in on mobile phones is also acceptable as there are apps which people can download and do everything on there. Check-in must be done at least couple of hours before departure as well as printing out your boarding pass if needed. Tour Operators will earn less money than usual; this means there will be less work for travel agents therefore they will get bored easily as no customers are entering the store. Staff working at the travel agencies will feel it is a waste of time learning basic information for the different countries and they will also give up on decorating their store and shop windows if everyone has decided to book their flights and accommodation using technology. Staff may give up after a while and quit their job if they feel they are not doing anything for a whole day.
Environmental
An example of this is the volcanic ash cloud which started off from Iceland and slowly expanded across Europe in 2010. British Airways cancelled all their Long Haul and Short Haul flights, Ryanair which is a budget airline cancelled every single flight of theirs to and from the UK and Thomson Airways also cancelled every single flight. Out of 22,000 flights only 5,000 flights were running when the volcanic ash cloud appeared, in result customers were required to call their airline up before departure time to check if their flight was still going ahead. Flights which could no longer go ahead as normal and part of a package deal, it was then the tour operators task to cover every single cost however only if it is protected by Air Transport Operations Licence ATOL. This role can affect all tour operators because they will be getting a number of complaints and calls from customers every single minute, this gives them a high responsibility within the role and a lot of patience. This is hard work for them to control by themselves because not every customer is patient and nice so the reason it can affect staff from travel agents because they can also get into trouble if they answer back and act really rude and disobedient towards their customers.
E) A factsheet showing the challenges to a tour operator:
RESPONSIBLE TOURISM:
First Choice offers a green brochure which includes hotels that has been given a Travelife Award for their responsibility of the environment. First Choice staffs are all able to download this brochure from the website to show customers when they enter the store and book a holiday with them because some people are interested in looking after different environments. There are a variety of choices looking at sustainability for travellers; activities and excursions. Projects from the World Care Fund are also included in order to show their ideas and care of the environment, the brochure allows customers to book their package holidays in a simple way when looking for countries abroad that relate to looking after the environment.
MAINTAINING THE MARKET SHARE:
Thomson Group is one of the popular tour operators which owns a variety of hotels across the world, one of the hotels is called ‘Hotel Annabelle’ in Paphos. The hotel offers a variety of features; meals, swimming pool, entertainment, activities, facilities and special offers. Thomson also has rights towards transport and accommodation, they offer; private transfers which is a taxi straight to the hotel and reserve seats before departure for every single customer. Check-in before departure to avoid queuing up in the airport and customers are allowed every single benefit option however this can only be allowed if customers have booked a package holiday. Thomson also owns over 50 different aircrafts, they update their website now and again to improve their services and to advertise new products.
TRENDS TOWARDS INDEPENDENT TRAVEL:
Dynamic packaging which is very similar to a packaged holiday but the only difference is dynamic packaging has more of a variety of choices as an independent traveller. An example of dynamic packaging is as follows: hotel choice + flight choice + airport transfer choice. It is much cheaper in price and this is because everything needed for a holiday is put altogether. Tour Operators can lose out on earning money given by customers after booking their holiday because now everyone prefers to put their own packaged holiday together. If some customers do not know how to do so they can start charging customers who need the help. The way a company runs its business can be affected only when they lose out on money which means fewer customers are booking their holidays in travel agencies.
