Tour Operator (package holiday tours, chartered flights)

1. Tour Operations Tour Operator(package holiday tours, chartered flights) Gatis Blunavs MA

2. Parts and contracts To provide for package tour, operator must find deals and agree on contracts about: • flights or other transport • accommodation • services (transfers, car rent) • Good price is always joined with higher risk – choose!

3. Agreements with carriers • Flight description – in detail • Charge for flights • Penalties, if breached

4. Scheduled airlines • Usually agree with allocation of seats, sometimes block charter • Always with release date – giving rights to sell seats, if not fully paid

5. Chartered flights • Usually: 10% pre-payment un full payment after each flight • Vladimir Raitz from ‘’Horizon’’ – first charter, 1949. - to Corsica. GBP 32,10… • Usually very dense planning: around 3 flights per day in summer, 2 in winter. • Latvia: ………..

6. Example RIX-MUN-RIX • Charter ‘’Latcharter’’ 44.100 LVL per plane + 45 EUR / pax. (plane waits) • It is: 60 pax - 530 LVL per pax. • Lufthansa 220 LVL both ways incl.taxes per pax. • Czech Airlines 137 LVL both ways incl.taxes (promised additional discount) per pax.

7. Accommodation agreements • Big operator: direct buyer/seller deals (whole hotels, whole floors) • Small operator: often via local company - agent /consolidator

8. Accommodation agreements 2 • 3 types: • Allocation of number of beds • Allocation of number of beds - till release date • AD HOC based agreement

9. Accommodation agreements 3 Priekšrocības Trūkumi Allocation of number of beds independent of filling-up Best price Unsold beds paid by operator Allocation of number of beds till release date Agreeable price, Less risk After release date New deal AD HOC based deal No risk for tour operator Expensive for client

10. Accommodation agreement4 Contract contains: • Types of rooms • Catering opportunities, including special diets • Booking and luggage transfer procedures • Kitchen cleanliness bonds • Space for rep, for notice boards

11. Brochure price grid

13. Basic calculation(what’s what) • Fixed costs • Transport • Accomodation • Transfers, excursions • Additional fixed costs • Wages (incl. reps) • Rent • Communal services • Janitor services… • Variable Costs • May be Accommodation, transfers, excursions Commision, profits… Gan savā valstī, gan pārstāvniecībās

14. Seasons Cenas veidošanas pamats high, peak season shoulder season Low season Profits

15. Load factor Used (sold) seats in plane or hotel Charter line - 90% Regular airline: often 55 to 60%

16. Chartered flight cost calculation • Boeing 737 130 pax once per week • 28 weeks • 12000 LVL - flight both ways • 29 flights

17. Chartered flight cost calculation 2 • 29 X 12000 = 348000 • 348000 : 28 = 12429 • 90% of 130 = 117 • 12429 : 117 = 106,23

18. Samazināt cenas = risks! • Pārdot bez peļņas – labāk nekā nepārdot vispār? • Tad, ja operatoram pieder viesnīcas, aviolīnijas. • 60. gadi Nr.3, Nr.6: Court Line, Clarksons • 90. gadi Nr.4, Nr.8: ILG, INTA-SUN

19. Calculating final price Example: transport per pax LVL 106.23 Hotel week per pax LVL 70.00 Ground services LVL 7.00 Minimal costs 1 client LVL 183.23 + agent’s commission = break-even price + operator’s additional invariable expenses, profits

20. Pārdošanas cenas veidošana 2 Mazs operators pievieno uzcenojumu izmaksas 1 klientam LVL 183.23 Uzcenojums 20% LVL 36,65 Kopā LVL 219,88 Galīgā cena visu sezonu LVL 220

21. Pārdošanas cenas veidošana Liels operators pievieno aģenta komisiju, Tad nosaka cenu pa cenu zonām (līdz 10 sezonas laikā) izmaksas 1 klientam LVL 183.23 1/9 aģenta komisijai LVL 20,35 Kopā LVL 203,58 Cena nesezonā LVL 204 Cena pārejas sezonā LVL 222 Cena augstajā sezonā LVL 250

23. Calculation, sales per one person (stock),so hotel rooms are being sold as beds.