TH1910

IMPORTANCE OF PLANNING
Tour planning is the process of determining the objectives of a tour, whether these involve customer
satisfaction, destination and community endorsement, and organizational promotions, or gain profit. In the
minds of travelers, planning in advance is one way to save time and make their travel experience
unforgettable. While for tour operators and travel agents, planning in advance means being prepared for the
unavoidable circumstances that may take place while their clients or consumers experience their package
holidays as well as be ready for the risks involved in running the business.

Tour operators are pivotal in their role of acting as wholesalers, packaging together transport to the
destination, transfers, accommodation, and ancillary services. However, in order to make their package
holidays cost-effective, they have to ensure that the select destinations are attractive, other travel
components provide excellent service, and other travel products are reasonably priced.

Planning a package holiday from product conception to marketing the product, and then a period of lead
time before being launched to the market will take time to be developed by tour operators. Creating
package holidays may vary depending on the number of destinations these may have and the travel
components these may include. Thus, the product development process does not happen in isolation and
should be all-encompassing, drawing on staff expertise throughout the company, such as marketing,
operations, human resources, and finance departments.

Tour planning plays a vital role in coming up with cost-effective package holidays because this involves
itinerary planning and development, destination research, and negotiating with the service suppliers. With
the said areas, tour planning helps tour operators and travel agents survive the travel industry business.

ITINERARY PLANNING AND DEVELOPMENT

An itinerary is a planned route or journey that matches the client’s profile during tour planning and the
identification and selection of the various suppliers of services. There are three (3) types of an itinerary
which are the following:

• Skeletal itinerary refers to the proposed and preliminary schedule of activities.

• Technical itinerary specifies the details of the tour, such as scheduled transportation, arrival and
departure schedules, duration of sightseeing tours, and type of accommodation.
• Descriptive itinerary provides a narrative of the planned activities and destinations that were visited
while on tour. It is usually produced to help market the package holiday to potential clients or
consumers.
Planning an itinerary is a complex procedure and is critical to the success of a tour operator because they
need to provide maximum satisfaction for clients or consumers at a reasonable price. When planning an
itinerary, it is useful to consider the following elements (Holland & Leslie, 2017):

• The core is what is being offered, such as a beach holiday or a city break.

03 Handout 1 *Property of STI

 [email protected] Page 1 of 7
 TH1910

• The tangible product is the physical element in a package holiday or tour package, flight, and
accommodation.
• The augmented product refers to the extra features that the service suppliers add to their services
in order to be competitive such as tour guides and free transfers.
The tangible elements, such as the identification of suitable accommodation or choosing an enticing
attraction in a destination, are keys to plan an itinerary. Tour operators and travel agencies need to assess
the accommodation available in terms of location, health and safety provision, quality and service, which are
applied to the basic travel components below.

• Transport from where the clients would be picked up going to the destination such as air
transportation. Tour operators need to ensure that the flights available to the destination are
accessible within a reasonable time of landing.
• Accommodation found at the destination, which refers to the establishments such as hotels that
are available in a particular destination. Tour operators need to include in their decision-making if
meals would be inclusive or available on pax account (charged on customer’s account), whether it is
going to include full-board, half-board, or breakfast only, as well as the availability of single rooms.
• Transfer from the airport going to the accommodation and back, which is referring to the vehicle to
be used. Transfers from the airport going to the hotel are usually completed by coach that offloads
passengers at several hotels or other types of accommodation.
• Ancillary services (optional tours) upon clients’ request refer to other needs of the travelers such as
a tour representative or tour manager who may accompany them, availability of car rentals,
equipment that may be hired within the package holiday, excursions, and local attractions outside of
the paid service.
Additional components not included in the list above would be gratuities (tips given to personnel), baggage
handling services, service charges, taxes, promotional gifts, or complimentary drinks at a welcome event or
reception for the guests.
Itinerary development is defined as the process of building up the destinations and activities that are
arranged conveniently and chronologically. The following are the step by step process in developing an
itinerary:
1. Identify the duration of the package holiday. The number of days travelling by land, air, or sea (if
applicable) must be determined in this step. This helps organize the flight arrivals and departures of
the travelers so they would know where to go from day 1 up to the last day of the package holiday
the clients have availed.
2. Research other tours in the marketplace. Careful planning is required in developing an itinerary for
a package holiday or tour package. One may opt to take a tour at the destination of the tour package
that is under development. Instead of just drafting the itinerary in writing, experiencing the tours
available in the target destination may provide a bigger picture of what might the travelers need and
want depending on their profile.

03 Handout 1 *Property of STI

 [email protected] Page 2 of 7
 TH1910

3. Survey connecting options in advance. One must pay attention to potential delays related to airport
check-in, transfers, car rental, time differences, unfamiliar roads, and local traffic conditions at
various times during the day.
4. Enlist the names, addresses, contact numbers, and other contact details of the inclusive
accommodation, sightseeing tours, and other attractions. Tour guides, tour managers, travel
agents, and especially the travelers must know who they need to contact for more information,
where is their place of lodging exactly located, and what are the do’s and don’ts once they are within
the vicinity of the hotel, sightseeing tours, and other attractions.
5. Be flexible and open to spontaneous opportunities. Over-planning must never be taken into
consideration because some destinations cannot guarantee to conform with the schedules given on
an itinerary. There are different factors why such may take place like unavoidable circumstances
such as a room needed to be repaired due to an accident, bad weather, and miscommunications
with service suppliers.

DESTINATION RESEARCH

Researching a destination may be gathered through a variety of options. One must know and understand
how to conduct destination research because this can give an insight of the must-visit places in a particular
destination. This ensures a structured collection of information using accepted methods of data gathering
and analysis. This can be used as the foundation for drawing conclusions, forming recommendations, and
making decisions. The following are the basics in conducting destination research:
1. Business Objective – This is the key issue that a company or organization wants to address. This is
the most important starting point of any research project. To determine the business objective, it
may be helpful to consult with the people who know and understand one’s operating environment,
such as the staff of the company assigned to conduct the destination research. Some examples of
key issues include:
• Making profit or keeping the business open (operations and financial feasibility)
• Determining current or future resource needs (forecasting)
• Setting priorities and developing marketing plans (marketing)
• Enhancing visitor experiences (product development and customer service)
• Evaluating the success of new initiatives or changes (product development and evaluation)
• Assessing visitor satisfaction (performance measurement)
2. Research Objective – This refers to the research information that is needed to address the business
objective. The guided questions toward this may be any of the following:
• What kind of information is needed?
• What questions need to be asked?
• What are the possible sources of information?
• When is the information needed to be obtained?
• Who can answer the questions?

03 Handout 1 *Property of STI

 [email protected] Page 3 of 7
 TH1910

If there are multiple research objectives that need to be addressed, categorizing them according to
“need to know” and “nice to know” would allow one to shape these needs easier as the research
progresses.
3. Information Gathering and Analysis – This is when the different types of research are used to
gather, break down, and analyze the required information. This may be done through any of the
following:
• Interview (phone or face-to-face) - conducting a conversation where one participant asks
questions, normally structured, while the other one responds to it, as in interviewing with a
local or travelers who already experienced a tour in a particular destination.
• Survey (online or mail) – a data collection through a set of questions.
• Questionnaire (online or mail) – is a list of written questions with a choice of answers aimed
at getting information regarding what is being studied.
• Information from the internet
• Articles in magazines
• Government agencies
4. Result/s Evaluation – this is where the result/s of the analysis or analyses are being evaluated.
Whether the results can help one understand more the potential of a particular destination or would
need more information gathering for better understanding. This is also where the target destination
is evaluated, whether it would fit the target market before being included in a package holiday.
5. Conclusions and Recommendations – this is where one decides if a destination would fit its target
market or be included in a package holiday after being evaluated before being offered to other
clients.
Through these steps, conducting destination research would be easier and more factual. These steps can
help one understand and gauge the potential of a particular destination before including in package
holidays.

SUPPLIER NEGOTIATION
Negotiating with the service suppliers is also known as contracting, or the process of negotiating competitive
rates, terms and conditions, and tour services with the identified suppliers. The objective is to get the best
available rate, with the most concessions, at the most favorable terms and conditions, which becomes the
contracted rate (tariff rate sheet). This involves the suppliers themselves assessing the tour operator’s
credibility, potential, track record, and credit worthiness before committing any contracted rate. The tour
operator on the other hand, will assess the suppliers’ ability to provide the services contracted within
specified standards (Claravall, 2013).
Contracted Rates/Tariff

One of the options to negotiate with suppliers is to negotiate rates and conditions for specific products or
services on specific dates, rather than on annual terms. This helps suppliers better manage their yield

03 Handout 1 *Property of STI

 [email protected] Page 4 of 7
 TH1910

management policies based on pre-ordained and analyzed occupancy ratios or load factors. Whereas, for
regular package holidays or tour packages, most of the suppliers’ negotiation is done on an annual basis.
While, for ad-hoc arrangements, it will depend on the availability of space and the rates applied to the rest
of the supplier’s inventory at the time the request is to be fulfilled.
Inclusion, Terms, and Conditions

Basic inclusions and the terms and conditions in contracting rates must be clearly specified in the contract
with the exact payment to be given to the suppliers in exchange for their products or services. Inclusions will
depend on whether these are transfers, modes of transportation, accommodation, sightseeing tours, or
other tourist attractions.

• For air travel, the class must be specified as well as the carrier’s frequency and schedule. Class may
be known as economy, premium economy, business, or first. The contracted rates consist of
chartering aircraft of specified configuration and range.
• For land transportation, the units (bus and car rental) may be contracted from either tourist
transportation companies or commuter bus companies. The contracted rates may be on a per-hour,
per-trip, per-sector, or per-itinerary, per-pax, or per-unit (type or size) subject to the tourist
transportation company or commuter bus company’s franchise, insurance, and driver’s training. Rail
travel may also be included here. However, the contracted rates will be on a per-service or per-trip
basis.
• For sea travel, the class must be specified with or without other services, most cruise lines’ class may
be known as interior, oceanview, balcony, or suite cabin.
• For accommodation, the room category is matched with a contracted rate, as well as the contracted
meal rates (if available). Negotiations may be extended to other business and leisure facilities that a
hotel, resort, or the types of accommodation offers.
• For sightseeing tours and other tourist attractions, the contracted rates may be for entrance fees to
special shows, museums, and other exclusive use of a amusement venue.
Taxes, Insurance Fees, and Service Charges

Before tour operators can mark up their package holidays or tour packages, they also have to consider the
taxes, insurance fees, and service charges. The contracted rates, as mentioned above, may or may not
include yet these (taxes, insurance fees, and service charges). Every product or service that includes these
must be specified and indicated in the contracted rates.
Concessions

Some suppliers grant concessions to tour operators, which they pass to their clients. For instance,
transportation companies would normally give free tickets for a specified number of full-paying tickets
issued, provided these are travelling together on the same sector, flight, and date. While a hotel may grant a
free bed for every 15-paid bed, up to a maximum of four (4) beds with complimentary welcome drink or
breakfast included per room rate.

03 Handout 1 *Property of STI

 [email protected] Page 5 of 7
 TH1910

Validity of Contracted Rates

Service suppliers must indicate the validity of their contracted rates, year-round with peak or lean seasons,
or high or low seasons along with their respective market. The contracted rates would vary in different
markets. The general rule is that contracted rates are valid from January 1 – December 31 or April 1 – March
31 of the following year. For some European tour operators, these would be from October 1 – September 30
of the next year. The contracted rates would also vary depending on the peak or low season of a particular
destination. The following are considered peak seasons here in the Philippines:

• Christmas – New Year

• Chinese New Year
• Holy Week
Booking and Reservation Procedures and Conditions

Service suppliers have their own reservations and procedures. These must be clearly stated in the contract
agreement. The conditions to keep in mind are the following:
• Option dates are preset by suppliers who are also known as the times when the tour operator’s
reservations must firm up (to become more definite) or be cancelled
• Cancellation penalties are mostly applied when confirmed reservations are cancelled
• Amendment policies refer to the policies adhered to in changing the date of a specific reservation
• Cut-off period
• Deposit payments
• Revision of contract agreement
Some suppliers consider amendment of dates as a form of cancellation thereby, requiring the tour operator
making the cancellation pay for cancellation penalties. It will also depend on the type of land arrangement
that a client would require:
• Local/Domestic land arrangement is when local hotels provide tariff rate sheets to accredited
(Department of Tourism and with complete business permits) travel agents. Suppliers usually release
rate sheets annually. However, travel agents and tour operators must check if the tariff is valid and
to make a follow up on the updated tariffs.
• International land arrangement is usually booked through tour operators or travel agencies who
play as wholesalers. In the event that a supplier does not have a satellite office for face-to-face
communication, communication through email is how the arrangement is done.
Free Sale and Cut-off Date

Some service suppliers offer tour operators free sale facilities. Free sale refers to the number of seats, beds,
and rooms that are allocated to a particular tour operator, which must be sold within a period of time,
leading to a cut-off date. Upon reaching the cut-off date, the unsold ones revert to the control of the
supplier and a tour operator may no longer sell these thereafter.

03 Handout 1 *Property of STI

 [email protected] Page 6 of 7
 TH1910

Deposit Payments and Revision

Most suppliers will require tour operators to deposit a payment to confirm reservations. The contract
agreement must specify that no credit facilities exist between the supplier and tour operator and that the
refund policy and conditions in case of non-utilization of confirmed reservations are subject to cut-off period
agreement. While revision refers to any change made to a confirmed reservation on the number of
participants with their respective names except the date it was booked.
Form of Payment and Credit Line
The form of payment must be specified in the contract agreement as well as when the payment’s due date
(upon checkout) and if it went beyond the credit line (an amount of credit extended to a borrower or card
holder). The maximum amount allowed on credit or the time limit to pay up is also specified.

References:
Claravall, B. G. (2013). Travel and tour operations in the Philippines. Sampaloc, Manila: Accumiro I.T. Solutions.
Holland, J. & Leslie, D. (2017). Tour operators and operations: development, management and responsibility. Boston, MA: CABI.

03 Handout 1 *Property of STI

 [email protected] Page 7 of 7