Package tours are commonly divided into three segments. Pre-determined packages, segmented-packages and tailor-made packages are the result of much thought and strategic planning on part of tour operators. Getting behind the scenes, Vyas Sivanand tries to plot the winning formula for building a successful package tour.

A zest to explore new vacation options coupled with an increased spending power preceded the boom witnessed by the Indian tourism industry. This naturally lead to the advent of competitively priced ‘inclusive tours’ commonly referred to as package tours that promise to deliver the maximum privileges to the tourist at minimum cost. What then is the winning formula, to pack a punch in a package yet making it a profitable venture?

According to industry veterans there are various factors that contribute towards designing a profitable package tour of which concept selling and giving value for money in a sensitive service industry, is the most critical one. Says Suresh Pendakur, sales manager, Cox & Kings (south), "Packages have to be designed to provide value for money apart from giving them accountability.

"A package should be able to project itself as a dream holiday which is accountable throughout the customer’s memory. An ideal package should provide optimum facilities to the customer while addressing the smallest of doubts. This warrants a vigilant R&D department that does continuous R&D for each and every package."

The Criteria

The criteria influencing the costing of a package tour are clients budget, transportation used, season, sightseeing and accommodation. According to Niranjan Gupta, director, Navras Travels, "The main criteria for designing a package tour depends on the season. Certain destinations are more popular than others in a given season and are therefore more steeply priced. For example Kulu, Manali, Kodaikanal, Ooty, Darjeeling etc. are preferred during the summer and places like Kerala are favoured during winter. The criteria for designing would therefore depend on popularity, costing of the package, existing season, touristic sites and attractions in and around the given destination so to it’s USP (unique selling point)."

A tour is normally designed keeping in mind the customer’s choice. The prices only differ from season to season. Says R A Nagaraja Gupta, managing director, Travel Air, "There is a growing clientele for theme tours such as beaches, hill stations or pilgrim centres. Several tour operators are thus designing their packages to cater to this segment. According to me, the criteria to be considered before configuring a package tour and its costing are all the basic travel requirements, accommodation, sight seeing and optional tours that the tourist might like to take. The package should not leave any room for imagination on the part of the customer providing for every possibility."

However Mildred Noronha Smith, regional director, South India, Global Aviation Services Pvt Ltd, feels that it is the destination itself and the season of travel that plays a pivotal role in designing a package.

Why package tours?

A common roadblock faced by travel agents while selling a package is beating the perception that package tours offer restrictions while travelling because of strict itineraries. According to agents, this factor has been addressed by leaving it to the customer to decide as to which tour he wants to take. "There are ‘Fixed Departure’ package tours and ‘Customised Departure’ tours based on a minimum of two people. On a fixed departure, the itinerary is generally planned by the hour and people are required to strictly follow timings. First time travellers travelling on limited budgets feel more comfortable on a tour like this. In fact we get clients who specifically ask for a tour where they could join others as they feel reluctant to travel on their own. This could not necessarily mean that they are looking for low budget tours. Regular package tours are more flexible. Clients can go about their tours at ease. Here the costs could be higher but will allow the client to make minor changes in the tour like upgrades, add ons, deletions and the like," says Smith.

Transportation and Accommodation

While transportation and accommodation play a pivotal role in the making of an attractive package, travel agents are of the opinion that the manner in which airline fares are structured in the country makes it difficult for them to stitch together a winning package. They feel that the package cost for destinations, inclusive of air fares, works out to be quite high and is bound to be unattractive with customers opting for attractive overseas packages instead. But not all agree. With options like Apex fares and ‘Bid & win’ concept from Sahara, few feel that the scenario is much more streamlined as far as flight charges are concerned.

"We get special deals for all flights because we do bulk bookings well in advance and get the best rates. In our coun

try, the flight concept is fast catching up. Now you have Apex fares wherein if you book 15 days in advance you get a 50 per cent discount and if you book 30 days in advance you get a 65 per cent discount," says Pendakur. Package costing includes mode of transportation whether air, road, sea or rail, hotel accommodation in various categories to suit different budgets, meals, transfers, sightseeing, and taxes. On choosing a particular destination, hotel, flight, roadways, etc, few agents combine their network to get the best deals for their clients.

"We represent various airlines as GSA in India. The destinations we package will be those which will compliment the network of the airline we represent. For example, we actively promote Nepal to create more traffic on Royal Nepal Airlines," says Mildred. Accommodation costs are of concern to many guests and it also features as the most sensitive area while designing a package. "We even look at 3-star properties, not just restricting ourselves to 5-star properties. The general perception is that a 5-star property is much more superior to a 3-star, but today even a 3-star property is a good option when it comes to budget travel. We promise hotels a fixed number of room nights and ask them to take small profits on the margin. After all it is a tough market these days and every one has to compromise when we live with just about 10 per cent of our country’s population who really believes in travelling," asserts Pendakur.

Under Utilised Potential

The package tour concept is yet to be effectively utilised in the country. Not many people are aware of the advantages of a package tour and added to this is the fact that many tour operators are oblivious in the manner in which they handle a tour. "Many tour operators do not take a package tour designing seriously. This spoils the market. A package tour should be put together properly. Other than that, in our country, people do not plan much in advance," says Pendakur.

Adds Smith, "A lot of progress has been made in the area of domestic tour operations. The Indian market holds huge potential and first time travellers are more comfortable being told what, how and when to do things on a tour." However Ranjan Abraham, director, Clipper Holidays, feels that domestic package tours have been under-utilised. He says, "If marketed well, package tours have immense potential, as middle class and upper middle class incomes are constantly increasing." Travel Air’s Gupta emphasises on awareness as the key word. "It is true that package tours are still not taken advantage of. A lot more awareness needs to be generated," he says.

To ensure that a customer comes back to the travel agent is a tough task considering the competition in the market. Says Smith, "I think most people come to us with a vague idea of the destination they are looking at travelling to. It is very important that the person marketing the product, knows the destination inside out. Here is where one’s marketing skills come in. Pricing does play an important role in deciding whether he will buy from you or another, but at the end of the day cutting prices means cutting corners."

Reputation speaks volumes in reassuring customers. Says Abraham, "By developing a reputation for efficient service, competitive cost, prompt confirmations, an ability to assess clients’ expectations and meeting them helps in ensuring loyalty." Gupta adds, "The reputations of the company promoting the package tour is also important."

Ensuring Quality

"As part of the process of packaging a tour, we visit and work on the product in depth before putting it out in the market. The product is tried and tested to suit our market and is monitored continuously. We select properties, transport and tour operators to suit various budgets. Also I think one gets what one pays for and it is important at the time of sale not to over-extend the promises of service. That is why the agent must know the product well enough to advise the client correctly. This would give the client a clear picture of what he will get on a tour and the choice to upgrade at a cost," informs Smith.

Agents ensure that there is a standardised structure to package tour designing and implementation. "We ensure that promises and good quality of a package is maintained by using quality hotels and efficient transporters. We first do an extensive research and check things out ourselves. Thereafter periodic surprise checks are carried out to ensure continued good quality of the package," says Abraham.

Adds Balaji Narayanan, Akshaya Tours and Travels, Chennai, "Living up to what you have promised in the package is necessary to survive in the industry. We have to do our homework properly, especially with regard to transportation and hotels. We also have to arrange for good guides in the destination. People are spending valuable time and money and we have to take serious note of that." As customers are the only one’s who finally experience the package, agents make sure that every aspect is taken care of. "We have experienced staff who keep checking on the quality of the hotels and the best prices. We also make sure that all necessary information of the package tour is given to the customer so as to ensure their satisfaction and also turn it into a memorable experience," says Gupta of Travel Air.

(With inputs from Susan George, Chennai)