This project investigates the importance of forecasting in a travel agency. Operating in an industry, which is heavily subject to seasonality and trend features, travel agency should be able to identify appropriate forecasting techniques to improve its current practices and to add value to its business conduct. In section 1, I briefly describe the travel agency by identifying its core services, operational markets, core competencies, core processes and stakeholders. In section 2, I explain the forecasting needs of the agency and its current practices in order to be able to criticize the effectiveness of these practices according to Operations Management theory, in section 3. In section 4, I identify areas for improvements and suggest possible actions. Based on the suggested improvements, a specific implementation plan including timetable and cost estimation is created, in section 5. In section 6, the paper highlights the benefits of implementing the proposed improvements, while References complete this project.
[...] Figure 3 Packages to local Destinations Figure 4 Packages to foreign Destinations Inability to forecast accurately involves important opportunity costs, losing customer, and overall it contributes negatively to company image Current Forecasting Practices Forecasting in the travel agency is being performed by sales force personnel. Sales people are familiar with customers' needs and preferences and they have the experience required to perform forecasting. Sales force collects historical data from several sources and follows specific practices to forecast the future demand per core service as accurately as possible. [...]
[...] Improvement Suggestions The travel agency's current forecasting practices and their effectiveness allow for improvements in all the three core service categories. Management should lay more emphasis on the forecasting process. A better process will yield better forecasts. They should focus on decreasing forecasting errors, and they should not only communicate this to employees but also get them committed to this. All employees who can provide important input in forecasting should be consulted and included in the process. There is much to benefit from cooperation with suppliers and customers. [...]
[...] Besides, BSP is the measure that forces accurate forecasting in ticketing since running out of tickets or having unused ticket piles would result in a fine from IATA and would raise an issue of the good standing of the agency and its reliability. It is essential that customers and airlines can rely on the travel agency for tickets to be issued according to the required standards and for payments to reach the airlines within the agreed deadlines. Equally important is to forecast accurately the demands for individual and business customers. [...]
[...] Software package can provide precious help in analyzing the data. Cooperating with its affiliate travel agencies abroad would benefit the travel agency enormously. Affiliate travel agencies represent a significant forecasting tool in respect to the future tourist demand locally by performing market research in their homelands and recording the general tourism trend on a more detailed basis than what pure statistical services do. In that way, the travel agency will have the necessary feedback as far as hotel reservations are concerned. [...]
[...] As IATA Members the travel agency is a full-service carrier that relies on global reservation and distribution systems. Workforce: well-trained, customer-oriented workforce is especially important in the service industry. The core processes of the travel agency consist of: Customer relationship processes: customers consist of affiliate foreign travel agencies, commercial and business travelers. Satisfying them is crucial to business success. Supplier relationship processes: relationships with suppliers (hotels, tour operators, airlines, foreign travel agencies) are vital to customers' satisfaction and consequently to the enhancement of the business. [...]
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