M3: Explain ways of maximising the profitability of the planned package holiday.
For M3, learners must explain, with specific examples, ways in which profitability could be maximized. Aspects such as methods of contracting, consolidations, currency exchange, cancellation charge and commission must now be applied specifically to the planned tour, with explanations to show how they could contribute to its profitability.
Methods of contracting-
Like any tour operator I need to make a profit, and in order to increase the profit of my planned package holiday to La Charente in France I need to keep the contract with my suppliers flexible so that low booking numbers will not affect my overall revenue. In the contrary if I have a fixed contract then I would still have to pay for plane seats and hotel rooms even if they haven’t been booked, this would result in me being out of pocket and could end up bankrupt like what happens to many small independent operators.
Methods and Benefits of selling-
When a tour operator sells a package successfully they receive many benefits, a tour operators uses many methods in order to sell the package.
If a tour operator sells their holiday effectively the number of reservations in the peak season increases. The more reservations a tour …show more content…
Consolidation is popular among small independent operators as they may only have enough customers between them to fill one plane journey rather than having two half empty flights resulting in a poor income/debt, you could also look at this as an environmentally friendly method as it is cutting the number of