Tourism is a single industry but it is made of different industries such as hotel, airlines, travel agency, trekking agency etc. Each one of them provides an individual product or they combine together to provide travel experience. Any visit to a tourism destination comprises a mix of several components of different organisations. A traveller may buy all the travel components from a commercial supplier, for example, travel agency as a single product or may buy travel components individually from different suppliers. Tourism product is a group of components or elements brought together in a ‘bundle’ to satisfy the consumer’s need. A tourism product is anything that can be offered for attraction, acquisition or consumption. It includes physical objects, services, personalities, places, organisations and ideas. Generally, tourism product is designed as an augmented product, which is the totality of benefits that a traveller receives or experiences in obtaining the formal product. People do not buy products, they buy expectation of benefits.
Therefore, tourism product is an amalgam of what a traveller does and experience during a tour. The service users and the products purchased during the trip are products. Tourism product is the total experience of the visitors. It includes everything and every person they come into contact with during their stay. The tourism product is more than simple attraction or accommodation. Tourism product is primarily an experience not a good. It is the total of travel experience not a good. From a consumer’s view, tourism product is a bundle of benefits and choose those which give them the best bundle. Tourism product includes all the necessary elements of the product plus luxury and status. So, tourism product is an experience of place (Location and people) at a particular time. The basics of tourism product formulation are selling an experience, which they cannot get at home. They buy experience, which is different from every day’s job. A tourism product is an object that attracts tourists. A tourism product normally has the following elements: accommodation, transportation, dining and entertainment as well as attractions and tours. These elements are meant to give the tourist a whole round experience from the tourism product.
Types of Tourism Products
The tourism products are grouped into the following types −
Tourism Oriented Products (TOP)
These are the products and services created primarily for the tourists and also for the locals. These products need a great share of investments in the private sector. A few of them are −
- Accommodations; for example, Taj, ITC Hotels.
- Transportation; For example, Owning taxis, luxury buses, and boats.
- Retail Travel Agents
- Tour Operators
- Shopping Centres such as malls
- Cinema Theatres such as PVR
- Restaurants for Food and Beverages
- Tourism Information Centers
- Souvenirs Outlets
- Museums, Temples, Gardens, and Theme Parks
Intangible Products of Tourism
- Bookings of accommodations, theatres, and at various sites.
- Tourists’ experience by visiting a destination, eating at a restaurant, or performing an activity.
- Tourists’ memory which is created by storing the details of events and experience on the tour. The high degree of satisfaction or dissatisfaction is often stored as a long-term memory.
- Transportation of tourists and their luggage from one place to another.
Tour Operator’s Products and Services
To realise the facilities and experience a tourism product offers, service is required by skilled and qualified staff. The tour operator provides the following typical products and services −
Accommodations – The tourist destinations are equipped with different types of accommodations. They cater for tourists’ stay at the destination.
Serviced − this type of accommodation is supported by skilled staff such as housekeepers, drivers, guides, and cooks.
Self-catering − this accommodation offers staying facilities but dining is required to be self-catered. It is equipped with cooking, fuel and facility, some basic supplies such as tea/coffee/sugar sachets, and a drinking water source.
Hotels − Budget rooms to 7* hotels with classy amenities. The hotels contribute a major share of imparting the experience to the tourists by providing best services and amenities.
Guest Houses − Owned by business or government organisations, which can be used by its staff and staff relatives.
Camping Sites − they are open sites often located in areas of lush greenery. They are equipped with a clean place to pitch the personal tent, a water supply, and electric supply. Campsites have common restrooms.
Definition of Tourism Products
Tourism product is a series of interrelated services, namely services produced by various companies (economically), community services (social aspect) and natural service.
According to Suswantoro (2007:75) on substantially the understanding of tourism product “is obtained and the overall service felt or enjoyed by tourists since he/she left his residence to the tourist destination of his choice and to return home where he/she originally departed”
Based on both this sense, it can be concluded that there are 3 (three) elements that form a Tourism Product, namely:
- Destination Attractiveness of
- Facilities of Destinations
- Ease of Destinations
Furthermore, the three elements together and produces an image of a destination, whether good or bad. Here there are a number of 6 (six) tourism product elements that make up an integrated tourism package:
- Objects and Attractions;
- Services Travel Agents & Tour Operators;
- Service Transportation Company;
- Accommodation Services, Restaurants, Recreation and Entertainment;
- Services Souvenir (Souvenir);
- Business Services Support.
Understanding the tourism product in depth can be done by first memahami characteristics of tourism products, among others:
- Cannot be moved
- No need for intermediaries (middlemen) to achieve satisfaction
- Cannot be stockpiled or stored
- Strongly influenced by non-economic factors
- Cannot be tried or sampled
- Highly dependent on human factors
- Having a high level of risk in terms of investment
- Does not have an objective standard or measure in assessing the level of product quality.
Here are 3 budgeting essentials for tour operators that will help maximise revenue:
- Know Where Your Money is Being Spent
You need a solid reference point before you can think about the results you want to achieve. To do that you need to know how many customers you need to cover your costs and make a profit.
First of all, you need a budgeting report which lists you’re:
Fixed costs which don’t depend on business activity e.g.rent
Variable costs which change according to your business activity e.g.Wages
Income i.e.forecasted income and other revenue that you are expecting
Actual costs i.e.Difference between budgeted figures and actual numbers
Taking a close look at it at regular intervals will make sure you’re prepared for your future operating goals.
- Monitor and Manage Your Profit & Loss
Was the budget in line with your actual numbers? If your answer is no, then you need to document why you think your actual numbers varied from the budgeted figures:
Timing-related i.e.the estimated result is expected to happen at some point in the future
Permanent i.e.the estimated result probably won’t happen
If it’s a loss, what can you do to stop the problem from recurring? If it’s an again how you can capitalise on the opportunity?
If your budget is tight, there are some basic costs you can cut, like company travel and lunches out. However, you might learn that you need to restructure the pricing of your services. Which brings us to our next point.
- Choose the Right Pricing Strategy
As a tour operator, it’s important to know that each product you have is profitable. So you shouldn’t think of having just one fixed cost for your products. Instead, you should think about what pricing strategies you can use to maximise your revenue:
Seasonal pricing. This is the most common type of yield management being used in the tour and activity sector. However, you should think beyond just ‘high’ and ‘low’ season. Take a look at your demand over the past few years, and assess whether you need more than just 2. You may end up with 3 or 4.
Day of week pricing. Do you have different demand for your products depending on what day of the week it is? Then bump up your prices on those popular days, because customers who can make it on quiet days will be quick to take advantage of the cheaper pricing. That means you can increase your total sales on your busy days.
Time of day pricing. The same is true for the time of day. If you rent out kayaks and your peak hours are 10am-4pm, hire out your kayaks at $40 per hour rather than you’re $15 per hour price at 8 am.
Last minute pricing. This can be good only if you have some way to quickly advertise and distribute your last minute price to the public, or your agents. Otherwise, people who happen to walk in at the last minute would get your lower price by chance when they would have been happy to pay full price.
The final piece of the puzzle is managing the commission you’re willing to give to your agents. Make sure you include this in your pricing strategy so that you’re not losing money.