Contents Introduction Chapter 1

1.2 The interaction of tour operators with other sector of tourism industry
Receptive Tour Operators (RTOs)Receptive Tour Operators (RTOs) provide tourism products to tour operators in other markets (as a business-to-business relationship) Specifically, RTOs sell tourism products, whether they are sold in a tour package or
alone, to tour operators and/or travel agents. They are essentially wholesalers and they don’t sell directly to the public.
So how do they make money?
They add a percentage rate (or fee) to the final price that the tour operator is selling the product or service for. When a travel agent buys the tour product, they incur the RTO’s fee in the final price. In that sense, RTOs do not charge commission. They simply market the tourism product and add their fee to the final product price.
Another key characteristic of RTOs is that they are experts in the region they operate in; and know much more than just the hotels and types of tourism activities that are offered in the region. As such, RTOs to help other tour operators identify things like hotels, services and design itineraries in regions they are not familiar with.
Ground Tour Operators
Ground tour operators operate domestically. They are however different from domestic tour operators in that they organize tours for incoming tourists on behalf of an inbound tour operator (and sometimes, outbound tour operators).
Let’s look at an example to better understand the role they play.
Italy will be the destination in this example. So, here’s how it works:
An inbound tour operator designs and promotes beach holidays, adventure, and heritage tours in different parts of Italy. Problem: the inbound tour operator doesn’t have offices across Italy. The inbound tour operator also doesn’t have close contacts or partnerships with suppliers and key agents in certain parts of the country. So, they consult with ground tour operators.
It is the ground operator that will handle the incoming tourists at those various destinations around Italy. They oversee land arrangements; negotiate with and contract local vendors; coordinate arrivals and departures; plan and put together local tour packages; escort tourists; provide market data; and cost and price tour packages. Overall, it is their duty to ensure that the entire trip goes smoothly based on the package tours and agreements.
You may know ground tour operators as “handling agencies” because they organize tours for incoming tourists on behalf of overseas tour operators.
The components of such tours are air travel, air transfer, accommodation, travel documents, sightseeing, boat riding, entertainment, and other travel services⁸.
Tour Operators are involved in planning, development, promotion, administration and implementation of tourism products. They oversee all the day-to-day tasks and also supervise, motivate and train staff. They are employed by tour or transportation companies, resorts or attractions. They may travel to proposed tour sites, check them out and experience the services first hand before assessing their tourism potential.
Responsibilities:
-Use operations management skills
-Use sales and marketing skills
-Manage human resources
-Develop products
-Use financial management skills
-Knowledge, Skills and Abilities:
-A secondary school diploma is required
-A university degree or college diploma in tourism or history is an asset
-Previous management and tourism experience is an asset
-Human resource management skills
-Leadership skills
-Team-building skills
-Financial management skills are required
-Good communication
Excellent customer service skills are required:
Knowledge of relevant destinations, attractions and travel are important
Research skills are an asset
Knowledge a second language is an asset
Risk management skills are an asset
Time management skills are an asset
Possible Future Career Paths:
Senior Manager
General Manager
Owner/Operator of tour operation
Tour operator- is an organization, firm, or company who buys individual travel components, separately from their suppliers and combines them into a package tour, which is sold with their own price tag to the public directly or through middlemen, is called a Tour Operator.
More precise tour operators are primarily responsible for delivering and performing the services specified in a given package tour. They can provide these services themselves as some have their own cars and coaches, hotels, and other travel-related services or can obtain these from the other suppliers. That is why they are called manufacturers of tourism products.
A tour operator- is a business that typically combines and organizes accommodations, meals, sightseeing and transportation components, in order to create a package tour. They advertise and produce brochures to promote their ⁹products, holidays and itineraries. Tour operators can sell directly to the public or sell through travel agents or a combination of both.
The most common example of a tour operator's product would be a flight on a charter airline, plus a transfer from the airport to a hotel and the services of a local representative, all for one price. Each tour operator may specialize in certain destinations, e.g. Italy, activities and experiences, e.g. skiing, or a combination thereof.
The original raison d'être of tour operating was the difficulty for ordinary folk of making arrangements in far-flung places, with problems of language, currency and communication. The advent of the Internet has led to a rapid increase in self-packaging of holidays. However, tour operators still have their competence in arranging tours for those who do not have time to do DIY holidays, and specialize in large group events and meetings such as conferences or seminars. Also, tour operators still exercise contracting power with suppliers (airlines, hotels, other land arrangements, cruise companies and so on) and influence over other entities (tourism boards and other government authorities) in order to create packages and special group departures for destinations that might otherwise be difficult and expensive to visit.

The tour operator is an integral component of tourism, yet many people are unclear about what a tour operator actually is or what they do¹⁰.

In this course work, I will explain what a tour operator is and why tour operators are important. I will also talk about what the difference between a tour operator and a torture operators are inextricably linked to the package holiday model. The tour operator is the person or organization who creates the package. A travel agency is then used to sell the package holiday.
In the chain of distribution, the tour operator is represented by the term ‘wholesaler’. This is because the tour operator is responsible for purchasing products of services in bulk and then redistributing them as a packaged product to consumers.
To put it simply, a tour operator is the person or organization who takes the individual elements of a holiday (e.g. transfer, hotel, transport) and packages these together.
The types of package vary. Most commonly, tour operators are associated with mass tourism and the traditional package holiday market. However, tour operators do also play an important role in the production of niche tourism products and services too.

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  Definitions of tour operator
  

If you’re looking for a formal definition of a tour operator with a reputable source, you may want to reference Polyether, who in 1993, defined the tour operator as;‘[an organization or person] who has the responsibility of putting the tour ingredients together, marketing it, making reservations and handling actual operation .Similarly, Holloway (1992) states 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’. The Organization for Economic and Cultural Development (OECD) define a tour operator as follows; ‘Tour operators are businesses that combine two or more travel services (e.g., transport, accommodation, meals, entertainment, sightseeing) and sell them through travel agencies or directly to final consumers as a single product (called a package tour) for a global price. The components of a package tour might be pre-established or can result from an “a la carte” procedure, in which the visitor decides the combination of services he/she wishes to acquire. ‘Importance of tour operators¹¹.
Tour operators are an important part of the tourism industry. Tour operators make the logistics of organizing a holiday much easier for the consumer. This makes people more likely to travel, more often.
Tour operators have a lot of power. If they choose to sell holidays in a particular location, for example, then that location will receive many of the associated positive and negative economic impacts of tourism. Tour operators are often vertically or horizontally integrated with other organizations, such as travel agents and airlines. This allows for easier management and distribution of products. Tour operators typically build holidays end masse. This means that economies of scale play a key role in driving down prices- the more you produce the cheaper the product becomes! This is obviously beneficial to the consumer and helps travel agents to have a competitive advantage when selling holidays.
The difference between a tour operator and a travel agent Many people are not aware that a travel agent and a tour operator are actually two totally different organizations and they are not aware of the difference between a tour operator and a travel agent.
In fact, it is quite easy to understand this difference¹²!