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Forecasting in a travel agency - Flaws and improvements

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ING Group Greece - Sidma SA - Telesis Securities

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  1. Abstract
  2. The travel agency
  3. The core processes of the travel agency consist of
  4. Forecasting needs and current practices
  5. Seasonality feature
  6. Trend feature
  7. Business cyclicality feature
  8. Demand for hotel reservations
  9. Demand for holiday packages locally and abroad
  10. Current forecasting practices
  11. Historical data: Statistical methods
  12. Outbound airline tickets
  13. Styles and fashions
  14. Implementation plan
  15. Benefits
  16. References

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. [...]

[...] In addition the agency will be able to track the peaks and lows throughout the year thus including high season in its forecasting plans. The agencies may also exchange forecasts with each other, contributing to the accuracy of forecasts for all sides. Implementation Plan Implementing the above-mentioned improvements brings changes to the current forecasting processes to their procedures and norms. Hence, the most effective way would be to treat them as a separate project with the central goal of improving forecasting processes. [...]

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