Travel Applied Management Case Study TT201

1
Travel Applied Management Case Study - TT201

• Thriné Hely
• And
• Graham Appleby

2
Agenda

• Aims of Module
• Learning Outcomes
• Structure of Module
• The Computer Simulation SUNSEASIM
• Assessments
• Working in teams
• Introduction to Capacity Management

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Aims of Module

• To apply management theory to a real world
  situation
• Apply management techniques to a consumer led
  industry
• Make judgements about key policies and develop
  strategies
• Consider issues that impact on effective
  management

4
Learning Outcomes

• By the end of the module students should be able
  to
• Exercise judgement in application of theory
• Evaluate the relationship between management core
  and travel theme
• Use different methods of data collection and
  evaluate relevance and significance of data
• Select appropriate methods to evaluate company
  performance

5
Learning Outcomes Cont/d

• By the end of the module students should be able
  to
• Communicate effectively and report clearly in a
  variety of formats
• Accept responsibility for determining and
  achieving personal and group outcomes

6
Structure of the Module

• Run over three study blocks - this is a TRIPLE
  module
• Tutor input, workshops, feedback sessions,
  tutorials plus student assessments
• Equivalent to 4 hours of formal study per week
• Weeks 9 - 11 formal tutor input on management
  theory applied to the travel industry
• Weeks 12 - 13 learning about the simulation
• Weeks 14 - 15 preparing for your first
  assessment
• Week 17 - 18 first assessment

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The Simulation - SUNSEASIM

• To be run over 6 weeks (19 - 25) which will
  represent one season of trading (ie summer)
• Each week equates to one months trading
• A full briefing will be given in week 12
• A handbook will be handed out
• Weeks 27 and 28 - assessment 2
• Week 30 - assessment 3

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Assessments

• Assessment 1 - Marketing Presentations/ brochure
  launch - 40
• Assessment 2 - AGM/learning points - 50
• Assessment 3 - individual reflection- 10

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Working in Teams

• Five teams per cohort
• Each person of equal importance
• What skills do you bring to your team
• How will you share these skills with the others?
• Responsibilities to other team members
• Everyone has a duty to fully participate
• Failure to do so will result in poor team
  mark/reduced personal mark

10
Capacity Management

• Seasonality
• Creating Flexibility in capacity
• Matching capacity
• How to solve over-capacity
• Ensuring that you protect your margins

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Seasonality

• The year is divided into two seasons - summer and
  winter
• Each of those seasons is sub-divided into
  shoulder and peak
• Changes in prices reflect these sub-divisions

12
The Summer Season
PEAK
Late shoulder
Early Shoulder
Premium Pricing
Prices reflect demand - lower During school term
Prices reduced Start of school year
Oct
Aug
May
Jul
Sep
Jun
Bank Holidays also create a demand - so prices
will be raised accordingly
13
Creating flexibility in capacity

• Sometimes something happens to reduce demand
• Weather, riots/unrest, terrorist attacks
• T/Os need to be able to respond
• Capacity is contracted in three ways
• Committed
• Allocated
• Ad hoc

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Contracting Capacity

• Committed accommodation or flight seats
• Tour operators contract on a firm basis
• Use it or lose it - both are perishable
• Tour operator pays whether it is used or not
• This is the cheapest form of capacity

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Allocated Capacity

• Possibly negotiated at a new destination or where
  the hoteliers or airlines are confident in their
  market
• Can be handed back if not sold - lead time
  written into the contract
• More expensive than committed
• Does give the tour operator some capacity
  flexibility

16
Ad Hoc Capacity

• Tour operators contract seats and beds only when
  they know they have a customer
• Does not tie them into perishable capacity
• The most expensive form of contracting

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Matching Capacity

• Ensure that you have matching seats and beds
• Some tour operators contract more seats than they
  require in the hope that they will get extra
  demand for holidays
• Unused seats are offered as seat only flights
• They mop up committed seats in this way

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Solving Overcapacity

• Consolidate flights
• Re-negotiate with accommodation owners and
  airlines on committed beds/flight seats
• Hand back allocated beds/flight seats
• Reduce prices!
• Do special offers - two for one - BOGOF

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Protect your Margins

• Bums on Seats
• Cover your overheads
• Contribution
• perishability