Contents Introduction chapter 1

Chapter II. The formation of tour operator activities 
2.1 
The basic principles behind the construction and marketing of a 
package tour 
Briefly described, tour operations are the preparation and implementation of all 
activities within an itinerary, within a given time frame, and within the estimated 
costs, in order to meet the expectations of the paying clients. Meeting the 
expectations of the clients is also termed as customer satisfaction. Customer 
satisfaction, in the case, is the delivery if what has been requested by the buyer 
(traveler) and what has been committed by the supplier (seller), through the 
middleman (travel agent and tour operator). What is requested and confirmed varies – 
it may simply be a one-way transfer from the airport to the hotel, or a complex, 14-
day itinerary to seven (7) different destinations or locations in any country, involving 
hotels, resorts, airplane charters, rental of motorized outriggers, cars, and tour guide 
services. Before discussing the organizations of a tours department, it is important to 
first understand the activities involved in tour operations. For the sake of good order, 
let us divide these into two parts: Quotations & Reservations and Field Operations. 
The activities involved in Quotations & Reservations are mainly within the physical 
confines of the office and take place prior to the actual arrival handling of the 
travelers and immediately after their departure. Field Operations are always outside 
the office in the field and take place immediately upon arrival and up to the travelers’ 
departure from the area of operations. 
Costing is putting together the costs of the various components, activities or 
services included in the itinerary, depending on the number of travelers availing of 
the package. After calculating the approximate desirable profit from each component 
and adding this to the cost, the result is a Quotation which is cost + profit. It includes 
costed-in concession. 
The Marketing & Sales people will determine the market demands and on this 
basis quotations can be prepared. These quotations are compiled in a rate sheet which 

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is commonly known as a Confidential Tariff. A Confidential Tariff is a listing of 
products offered by the tour operator, with corresponding pre-costed rates and 
concessions, based on specific or projected number of participants. Special 
Quotations are prepared for Ad Hoc Tour packages. These are costed based on a 
required minimum number of participants and in accordance with the specific 
activities, inclusions and requirements of the client. The ideal organizational set-up of 
the tours department must be developed along the concept that operation involves 
both office activities and field operations – one should complement the other in a 
manner that the areas of responsibility are clearly defined. The Tours Department 
Manager overseas both activities, but the respective msupervisions are responsible for 
each activity. On the office side, Contracting and Tariff Costing are yearly activities, 
which the Manager normally handles. Quotations including Ad Hoc requests and 
costing are one activity, while Reservations is the other. The messenger provides 
support to the office operations staff. On the field side, the Tour Coordinator/Airport 
Rep handles the Transfers and overseas the actual delivery of Accommodations and 
Meals, while the Courier reconfirms Passage requirements. These functions are 
interchangeable, in order to economize. The tour guide is responsible for the delivery 
of the sightseeing tour or tour package. The tour guide is normally a free-lance and is 
not an employee 
TOURS DEPARTMENT MANAGER 
OPERATIONS SUPERVISOR FIELD SUPERVISOR 
QUOTATIONS RESERVATIONS 
MESSENGER 
TOUR 
COORDINATOR 
COURIER 

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TOUR GUIDES/ESCORTS of the tour operator. The Tour Guide’s functions 
and responsibilities will be taken up in deal in Chapter X. The chart below provides a 
description of the job summary and duties and responsibilities of each position in the 
Tour Department of a travel agency. 
TOUR PACKAGES 
The product of Tour Operators is the Tour Package, a combination of two or 
more travel components. The basic components of a tour package are: 
*Transportation by air, sea or land, to and from a point of origin to a 
destination, or destinations and back to the point of origin. 
*Transfers refer to transportation to and from a destination’s gateway such as 
an airport, pier or bus station to the place of lodging, and vice versa. 
*Tours or Sightseeing tour, are a combination of transportation within the 
destination to a sights and sites of interest, tour guide’s services, entrance fees, 
entertainment or activities and sometimes, snacks and meals. 
*Hotel and Resort Accommodations refer to lodging and meals within the 
lodging establishment. 
*Tour Escort an individual who travels with the clients from the point of origin 
and back, and acts as the manager of the tour group, also known as Tour Leader. 
A combination of two or more of these components is a tour package. Tour 
guide’s services are provided in connection with sightseeing in a locality, and 
sometimes during transfer services. Tour Escorts are individuals who travel with the 
clients from the point of origin and back. They normally manage all activities of the 
tour’s itinerary and insure the client well-being. 
Depending on the number of components tour packages have different labels: 
*If only tours and transfers are included, it is called ground arrangements 
package. 

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*If tours, transfers and hotel accommodations with some meals are included 
this called land arrangements package. 
*If tours, transfers, hotel accommodations and some meals, plus transportation 
to and from the destination(s) are included, this is called inclusive tour package. 
*If all components are included, including a tour escort, this is called an inclusive 
escorted tour package. 
TYPES OF PACKAGES PER TYPE OF TOUR OPERATOR 
As discussed, there are four types of Tour Operators, each with different areas 
of operations, nationality of travelers, market of source of traffic and type of 
package/s offered/operated. 
LOCAL TOUR OPERATOR 
The local tour operator’s (LTO) source of business comes from both local and 
foreign travelers, visiting the destination where the tour operator is based. Its source 
of traffic is generally off-the-street or over-the-counter sales and sometimes other 
tour operators in the country. It operates regular sightseeing tours or tour packages, 
taking into consideration the popularity of the destination, site or sight. The LTO is 
primarily a retailer but occasionally acts as wholesaler. 
GENERAL SEQUENCE OF EVENTS 
–The LTO determines the popularity and demand of a given destination, site or 
sight, and prepares a package by contracting suppliers capable of providing the 
different components. 
–Markets, promotes and sells its package directly to the end-user in the locality 
and occasionally to other tour operators based elsewhere. 
–actually delivers/operates the package to the specific popular destination. 
VARIATIONS OF TOUR PACKAGES 
Tour packages vary according to any of the following: 

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1. Duration – Refers to the number of days and nights included in the package. 
Normally three days would mean two nights. However, when a package crosses the 
international dateline or spends an overnight inside an aircraft, the number of nights 
in the package is the same as the number of days. 
2. Destination(s) – A package may be for a single destination, or for multiple 
destinations, i.e. two or more. 
3. Category of Accommodations – The category of accommodation 
establishment may vary, from a five-star De Luxe (DLX) hotel, to four-star First 
Class (FST), to a three-star Standard (STD), to a two-star Economy (ECO), to a one-
star Budget Hotel (BUD). Pension Houses and Inns are normally not categorized. 
Actual Operations
4. Meal Plan – Refer to the number of meals per day included in the package, 
whether served in the place of lodging or outside in a restaurant. If all meals are 
included, this is a Full-Board Basis, Full Pension or American Plan. If only Breakfast 
and Lunch or Dinner is included this is a Half-Board Basis, Demi-Pension or 
Modified American Plan. If only Full Breakfast included, this is a Bed-and-Breakfast 
Basis. If the Breakfast is Continental Breakfast this is a Continental Plan. If no meals 
are included in the package, this is a European Plan tour package. Breakfast contents 
vary. Coffee or tea with rolls, jam and butter is a Continental Breakfast. If eggs and 
bacon or ham plus toast are added, it is an American Breakfast. If the toast is change 
to fried or plain rice and the ham or bacon changed to “tapa” or “daing”, it is Filipino 
Breakfast. Any breakfast with rice porridge (“lugaw”) and a number of side 
condiments are an Oriental Breakfast. A table laden with breakfast food and self-
service is a Buffet Breakfast. 
5. Mode and Class of Transportation – Mode of transportation refers to air, sea 
or land travel and type of equipment. Class is the quality of the transportation 
equipment, facility and amenities offered the passengers. In air travel, the class 
divisions are First, Business and Economy. In sea travel, they are Suite, Stateroom, 

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Cabin, First Class, Business Class, Tourist and Economy. In land travel, it is Air-
conditioned or Ordinary service. 
TYPES OF SIGHTSEEING TOUR 
Tours or sightseeing tours, are a combination of transportation within the 
destination to sights and sites if interest, tour guide’s services, entrance fees, 
entertainment or activities and sometimes, snacks and meals. These are classified as 
follows: 

Half-day Sightseeing - Operated mornings or afternoons. Normally includes a 
snack. 

Full-day Sightseeing - Eight to ten hours with lunch. 

Evening Tours - Operates after six in the evening. Normallyincludes dinner 
and a drink. 

Optional Tours - Tours that are not included in the Tour Package, for which the 
client pays extra. 

Quotations & Reservations 
CONTRACTING 
Contracting is the process of negotiating with suppliers for the most favorable 
rates, terms and concessions. When negotiating with suppliers, the tour operator has 
one single objective: to get the best available rate, with the most concessions, at the 
most favorable terms. More often than not, suppliers will assess 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 supplier’s ability 
to provide the services contracted reliably and within specified standards. 
The following must be clearly spelled out in the agreement for contracted rates: 
CLASS AND/OR TYPE OF SERVICE/CATEGORY AND/OR TYPE OF 
ROOM 

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For land transportation, equipment may be contracted from either tourist 
transportation companies or commuter bus companies. The former have more 
comfortable configuration and are equipped with a public address system, sometimes 
with TV-VCR for long trips. The drivers are service oriented and familiar with the 
sightseeing routes and sites. While the latter are geared to service commuter 
passengers. In either cases the type and capacity of equipment to be contracted is 
essential. Contracted rates for land transportation equipment may be obtained on a 
per-hour, per-trip, per-sector basis, and either on a per-person or per equipment type 
and size basis, subject to the commuter bus company or tourist transport operator’s 
franchise, insurance, drivers’ training and the like. In air travel, class-first, business, 
or economy – has to be specified, as well as the carrier’s frequency and schedule. In 
some cases, contracting for air travel consists of chartering aircraft of specified 
configuration and range. In cases of sea travel, the class of passage – with or without 
cabin, for example – and the number of meals included, must be indicated. In the 
hospitality industry, the room category is matched with a contracted room rate. The 
same applies to contracted meal rates. Negotiations may extend to other business and 
leisure facilities available at the hotel, resort and similar accommodations suppliers. 
For suppliers of entertainment and administrators of tourist attractions, 
negotiated rates are for entrance fees to special shows and/or full use of a special