Scope And Limitations Of Tour Operators Business < Business Guides



This computer mouse is in the shape of a car


A tour operator is one who provides the services of planning and organizing of a tour for its customers. People travel from one place to another for spending vacations, business enhancement, education purpose, sightseeing, etc. and depend on tour operators for the arrangement of their tours. The business of tour operators is a very rewarding option because of the high returns and huge demand associated with it. However there is a lot of competition involved in the travel business. To remain on top of the competition in the tour operators business, it is important that one understands the scope of the said business and the limitations attached to it. You must weigh various things before deciding on the services to be offered in the said business keeping in mind the limitations attached to it. If you are looking for the scope and limitations attached to the business of tour operators, this guide comes handy.

Scope of tour operators business

The tour operators business encompasses a large range of offerings. In the said business, you can include tour planning and organizing services related to tour travel, leisure travel, subject travel, sports travel, education travel, etc. It can also include tour related services for inspection, exhibition, training, conference, etc. for business clients. Destinations from the whole world can be included in your packages. You can cater to inbound or outbound tour services like travel booking, hotel bookings, arrange travel schedules, VISA arrangements, etc. The scope of tour operators business is vast; however you must do a cost benefit analysis before actually deciding what to offer in a tour operators business.

Limitations of tour operators business

With high margins and high returns, there are various limitations also which are attached to the business of tour operators. The following points throw light on a few of these limitations:

• High competition levels: One of the biggest limitations of tour operators business is the high degree of competition prevailing in the industry. A customer has various options to choose from which has increased their bargaining power. Due to the high returns associated with the business of tour operators, every year many entrepreneurs enter into the said industry. It has become very difficult to establish the brand name in the said business because of the cut throat competition that is prevalent.

• Element of Uncertainty: In the business of tour operators, everything does not fall into the category of controllable factors. There is an element of uncertainty attached to various things in the said business, for example uncertainty in the airline schedules, uncertainty in weather conditions, uncertainty in government regulations, uncertainty in hotel room availability, etc. This element of uncertainty comes brings with it a lot of constraints.

• Stringent regulatory laws: The regulatory laws governing the tour operators business differs from country to country. The governing laws of many countries are very stringent and bring in a limiting factor to the business of tour operators.

• Language constraint: Languages used differ from continent to continent, country to country, state to state, region to region. In the business of tour operator, one has to communicate to hotels, airlines, etc for tie up to offer smooth services to the customers who visit other countries in their tour. Language becomes a constraint in many countries. One can utilize the services of a translator but that comes for an additional cost.

• Effect of currency exchange rate fluctuations: Different currencies are used in different countries. The tour operators business is affected by currency fluctuations.

• Relations between countries: The political and economical relations between two countries affect the tour operators business to a great extent. If a country is not in good relation with the other the tourism industry is affected to a great extent because of this relation and hence it becomes an additional limitation for the business of tour operators.

• Different interests of travelers: Travelers across the globe have varied interests. The level of interest of travelers in visiting a particular location decides whether or not that location will attract tourists. Thus the dependency on the level of interest of the travelers is another limitation for the tour operators business.

• Fluctuations in demand: The demand for visiting one or the other destination keeps fluctuating depending upon various factors like weather conditions, effect of advertisements, relations between countries, outbreak of a contagious disease, price associated with the travel, economic conditions, political relations, perception of the countries in the travelers minds, etc. This fluctuation in demand affects the business of a tour operator to a great extent.

The business of tour operators is booming at a fast pace in spite of several limitations. There has been a growth in the tourism industry which has come up as one of the fastest booming industries in many countries across the globe.

Related directory categories

Related Travel Business Guides

Subscribe to our site for new business ideas (your email will never be shared)

Your name:

Your email: