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Tour costing and pricing - PowerPoint PPT Presentation

Tour costing and pricing

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• Meaning and Concepts
• Components of Tour cost
• Category of Tour costing
• Factors Influencing Tour Costing
• Pricing of Tour package
• Tour cost means the total cost incurred or attributed to a tour product or service. It is the sum total of costs incurred to create or formulate a tour package. Since tour is an assembled product, its costing involves bulk purchase. Therefore the cost of the tour packages is determined according to the client requirement or company strategy. As the quality of the product /service and the price of that product go side by side, hence in travel trade the cost unit is a package tour because a company sells a large number of packages.
• The identification of cost unit will help costing manager to separate the cost into smaller sub-divisions attributable to tourism industry.
• A tour package is a combination of various tourism services/ goods like transport, accommodation and other facilities en route and at the destination.
• Research and Development costs
• Travel Cost
• Accommodation cost
• Transfer cost
• Food and beverage cost
• Sightseeing and activity cost
• Marketing cost
• Administrative cost
• Miscellaneous costs

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Thoughtful pricing strategies for tour operators

Tour costing and pricing is one of the most important things to get right, especially for new tour operators. Even experienced operators with established pricing strategies can’t rest on their laurels, and need to review and tweak their pricing according to changing market and business conditions. 

In recent years, tour companies have had to scramble to adapt multiple parts of their business, including pricing, to a new world–first with COVID-19, and then with rapidly rising inflation. Adjusting your prices can seem overwhelming, but it doesn’t have to be. Here are some important things to consider when pricing your tours and activities.

The importance of pricing objectives

As with all parts of your business strategy, setting prices takes a lot of thought. You could, for example, aim to establish a name as the go-to budget operator for a particular destination, but you don’t want to price so low that you struggle to make a profit—or even stay in business. And what about travelers’ perception of your brand? Go too cheap and you may put some people off. On the flip side, go too far down the premium pricing route and you risk putting your tours out of reach for a lot of travelers and not generating enough business. 

To get your tour pricing right, it’s important to do some thorough research, know your audience and market inside out, undertake a lot of number crunching, and ideally do some testing. 

The first step is to consider your goals or, in this case, your pricing objectives. Once you know these, you can make clear-headed, informed pricing strategy decisions. Otherwise you’re just throwing out some numbers and hoping for the best. Consider the following common tour pricing objectives:

Retain customers: Do you want to build a loyal, long-term customer base? Typically, this means fairly consistent pricing so you don’t upset existing customers with out-of-the-blue price raises.

Differentiate your brand: Pricing is one way to stand out from the competition—either pricing lower to be the go-to budget tour operator or pricing higher to be known as a premium option in the market. Alternatively you could take a price-matching approach and aim to stand out in other ways.

Make more profits: You’re obviously in business to be as successful as possible. Maximizing profits typically involves keeping your costs as low as possible and your prices as high as possible, as well as by selling as many tours as possible. All of this requires thoughtful pricing. 

Maximize sales: Another common objective is to sell as many tours as possible. Do you price low to corner the market? Do you adjust your pricing at different times in different markets to keep sales high?

Maintain your brand image: Pricing also affects branding. There’s a big difference in how a brand is perceived if they price low or high. How do you want your brand to be seen?

Your pricing objectives should align with your broader business objectives, your stage and place in the market—e.g. a new or established name—and your financial circumstances.

4 key pricing considerations

Once you know your objectives, you need to consider the various factors that go into tour pricing. Here are some of the main things to focus on when setting prices for your tours and activities:

1. Know your costs 

You simply can’t consider pricing without considering operating costs. The two work together like a fine wine paired with the perfect cheese. Knowing your costs helps you establish a minimum price starting point—your break-even point—capable of at least keeping you in business. Your costs can be put into two broad categories:

Fixed costs: Rent, utility bills, staff salaries, and equipment and software maintenance or operation are all examples of fixed costs. These are predictable expenses.

Variable costs: These include less predictable costs. For tour operators, these often depend on how many tours and activities you sell and what they are. For example, you may need to hire more guides one season to cope with an increase in demand. Other costs to consider include commissions, staff training, and marketing. 

Ideally, you want to figure out a per-tour and per-activity cost to help you price your tours and activities appropriately. This pricing method is known as cost-based pricing. It’s perhaps the simplest strategy. When you know your per-tour and per-activity cost, you can mark up (or down) as needed according to your overall pricing objectives, and in a way that helps you reach your revenue targets. 

2. Know your value

Every tour you sell has a particular value to your customers. They are buying an experience rather than a product, so a tour that has a very high perceived value—for example a once-in-a- lifetime experience—can have a higher price. 

You can add value to your tours by offering specific services that may not add too much to your costs but have a high perceived value to your customers. For example, including meals or hotel transfers, etc.

Travelers value different things. Some might place a lot of value in an all-inclusive package to a highly popular resort, while others may place great value on doing something different and unique. You should aim to price your tours and activities accordingly. Knowing your target audience is a key part of this.

3. Know your competition

Who is your competition and how do they price their tours? You almost certainly have competitors who offer similar tours or operate in the same locations. Even if you have few or no direct competitors, you are still competing with the many other things people have to spend their travel budget on.

Knowing how your competition prices their tours, and what value they offer, will help you establish a benchmark price so you can position your tours appropriately. If travelers are used to paying a certain amount for a particular type of tour—the market rate—you need to know what that is so you can then price higher or lower depending on what you offer compared to your competitors.

This is some of the most important research you can carry out, so take your time with a deep dive into your competition:

• Who is the premium operator in your space?
• Who is the budget option?
• What do their customers get for their money?
• Where do they sell their tours?
• What reviews do they get (a great way to see if customers feel they are getting value for money)?

4. Know your market

As well as knowing the market rate for tours and activities, you need to know the demand within your market. If there is high demand, you may be able to charge higher prices and focus on adding value. If demand is low for some reason, e.g. it’s a new type of activity that hasn’t taken off yet or there has been a change in market conditions that reduced demand, then your price can reflect that lower demand, and then rise as demand increases.

Adapting pricing to market conditions is known as market-based pricing. The key is to constantly monitor your market, including what people want and what they’re willing to pay for—and how much they’re willing to pay—as well as your competition, inflation, and other timely factors.

This pricing model includes seasonal pricing, dynamic pricing (which we look at below), and last-minute pricing and discounts.

Pricing integrity when pricing tours and activities

Almost all travelers are price-conscious to some degree. No one wants to feel like they’re paying too much for something. And everyone loves to feel like they’re getting a good deal.

This is where “pricing integrity” comes into play. The more common definition of pricing integrity from a tour operator’s perspective is how fair, transparent, and consistent your pricing is. As mentioned earlier, you don’t want to surprise customers with sudden and drastic price increases. And you don’t want to offer some customer groups a huge discount while others pay full whack.

Making sure your pricing is fair and consistent for all of your customers, and giving them full transparency, ie. no hidden and unexpected costs while or after booking, is very important for your brand. This is especially important in a post-COVID world, where customers increasingly want to deal with brands they can trust and rely on—especially over the long-term.

Another definition of “integrity” is to describe something that is structurally sound. This can also apply to your pricing strategy. A sound, sustainable pricing strategy can be the solid foundation on which your business success is built.

Dynamic pricing for tour operators

Dynamic pricing is a market-based pricing strategy that is very common in the travel and tourism industry, and one that is increasingly accepted by consumers.

If you’ve ever noticed how airline ticket prices change depending on when a ticket is booked, or when ski hill passes change price the nearer you get to the day you want to ski, you’ve seen dynamic pricing in action. 

Dynamic pricing has been used in the travel industry for years, and it’s also common in the entertainment, retail, sports, and other sectors. It enables you to adjust your pricing based on a variety of factors in order to fill more seats, increase profits, and even offer your customers incentives for early booking.

Dynamic pricing is a way for tour operators to maintain price integrity, by rewarding customers who book early or showing that you can adapt to their changing needs, while also adapting to changing market conditions. 

To succeed with dynamic pricing, you need adaptable online booking software. Rezgo provides a rules-based pricing system that enables you to set up automated pricing adjustments based on a variety of factors, such as date, remaining capacity, early birds, and promo codes, so you can offer the right pricing for every situation.  Developing the right pricing strategy, or combination of strategies, is a crucial part of running a tour operator business. Be aware though that even when you settle on a pricing strategy, it’s never really settled, just like how your website is never really finished. You need to always keep a close eye on your market and competitors, and make tweaks and improvements to make it work better for you.

Written By | Rob Mathison

Rob Mathison is a Vancouver-based freelance writer focusing on tech, travel, digital marketing, and education. He is a co-author of The Complete Resident’s Guide to Vancouver.

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How to Increase Revenue with Tour Costing and Pricing

By Breanna Lawlor

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Do you remember the game show where contestants had to guess how much something costs? Yes, of course, it’s The Price is Right !

As an experience provider, your life might be as entertaining as a game show — especially when it comes to tour costing and pricing. And as you probably know, your prices need to cover your costs — all of them.

Learning how to price a tour package is no small feat. Sure, being fully booked is wonderful, but your goal is to be profitable. And, if you can create a sustainable pricing structure early on, you’ll be resilient in the long term.

In this post, you’ll learn what goes into tour costing and pricing, explore our downloadable Tour Operator Costing sheet and learn how to re-evaluate pricing at the end of each busy season.

What goes into tour costing and pricing  

Pricing impacts how guests feel about the experience they’re buying. If a booking is priced too low, it may seem cheap. On the other hand, if an experience is priced too high – it might be out of budget for your target market. 

Most people, consider themselves to be somewhere in the middle when looking at pricing. Meaning if guests are presented with 3-4 options, they’ll gravitate towards the middle-range tour package options. 

When setting your pricing, you’ll want to account for operating costs as well as profitability. Doing so will nudge you further towards setting prices that align with the goals of your tour business. And while pricing itself may not be complicated, it is an art.

You wouldn’t be alone if you’ve made the error of evaluating your tour business competition and setting prices just below or slightly above in order to attract bookings.

And while we can understand wanting to increase your share of the market, you should base your pricing on insights from your unique tour business.

When pricing a tour package, consider these questions:

• What type of activity or tour are you producing/selling?
• How many people can you accommodate?
• How many tours will you be running per day?
• What operating expenses do you have?
• How many of your costs are fixed vs. variable?
• Are you a seasonal business that experiences high demand at certain times of the year?

Guests want you to tell them why a tour is worth the price you’ve set. Be sure to note duration, add-ons and whether transportation is included in the total price. Ultimately, you want your brilliant tour description to back up the price and make it easy for guests to say, “that sounds like it’s worth it.”

Looking for a better way to price your tours?

Download the Tour Operator Costing Sheet

Set revenue targets and hit your profit goals.

How to price a tour package

One method of tour costing and pricing involves a cost-plus pricing strategy where you input all of your expenses and anticipated revenue. From there, you’ll add in profit and revenue targets.

When pricing tours and activities, you’ll usually hear something about setting objectives or knowing your bottom line. Here are some expenses to account for when establishing the costs of running a tour business:

Example fixed costs for your tour business

• Administrative costs (2-5%)
• Booking software (5-10%)
• Business Insurance (10-20%)
• Employee wages (20-25%)
• Equipment depreciation (10-30%)
• Leasing and/or rental costs (20-30%)
• Phone and Internet bills (2-5%)
• Utilities (5-10%)

Sample variable costs

• Accommodations
• Transportation
• Gas and maintenance costs (5-10%)
• Hourly guide wages (depends)
• OTA commissions (10-30% of the booking price)

When pricing a tour, you’ll want to know your capacity and overall operating costs. Once you know your baseline expenses, you can use this information to develop a sense of your target profit margins.

Methods for setting the price of a tour

Using a method known as cost-plus pricing, you’ll combine all of your anticipated expenses and add a profit on top. The basic principles of pricing a tour package account for:

• fixed costs
• variable costs
• a markup or profit margin. 

You will calculate costs + expenses + profit + commission structure (which is usually a percentage based on the tour price including the total number of guests).

Ask yourself these questions to address when pricing a tour:

• What are your costs per person?
• If you were to book as a group, ie 4+ people, how much can you charge per person?
• Let’s say you price the time slot as a fixed amount and add an additional fee per person on top of the minimum guest count
• You can also set a price for a private tour booking, regardless of the number of guests 

Alter your profit margin depending on the season and number of guests. Let’s say you need 4 guests to break even. And if you have 6 guests who book, the additional two people then make the tour profitable.

This way your time is always being compensated and you’re not burning out by running tours that aren’t paying for themselves. As Peter Syme says in his interview with Tourpreneur “many tourism business owners are guilty of underestimating their costs and undercharging as a result.” 

Packaged tours typically follow a structure with a designated amount of time for each activity. Some tour companies present lower prices designed to get potential customers in the door. For instance, even if a single booking may not be profitable, this strategy may generate enough volume to make it worthwhile.

Sure, competing on price alone can be tough, especially if you’re offering the same activity or a similar type of tour. When pricing a tour package, forecast, plug in the numbers of how many bookings you need to break even and turn a profit so you know what you’re working with.

1. Tour type

Perhaps you’re in the business of food or walking tours where all your guests have to do is show up and be entertained. On the other hand, you might be a kayaking guide or provide guests with bicycle rentals. Consider whether you have additional costs as a result of the tour type you offer.

Looking at your local competitors, similar companies and OTA’s will help you get a sense of market rates.

Sure, it’s helpful to get a benchmark when looking at tour prices — but don’t let this define your pricing objectives. Ultimately, your approach to tour costing and pricing needs to cover costs and establish a profit margin — even if it’s only 10-15% after your costs are accounted for.

If you’re already in your busy season, you might find yourself stretched thin with what you can do independent of additional staff.

If you operate multiple tours daily, do you need to keep staff on hand to run additional tours?

For instance, is there a busy season or peak booking times when you offer a waitlist for guests?

Are planning to offer group tours or sticking to private tours? This decision factors into how much you can charge per booking.

Guests should be able to tell what is included in the tour price with ease. An added perk of private tours is in alleviating concerns about not meeting minimum guest requirements. This means you can run tours with fewer people and still be profitable.

Thankfully, the benefits are there for both guests and tour businesses alike. For guests exploring whether to book a private tour, the expectation is that they’ll pay more in exchange for a higher-quality experience. 

3. Duration

Are you taking guests on 1-2 hour tours or multi-day expeditions? The duration and frequency of your tours will be dependent on how the amount of staff you have available.

Longer tours have the potential of increased profits if account for all fixed and variable costs. Multi-day tours need to account for greater fixed expenses and increased booking logistics as well.

4. Upselling

When creating travel packages , consider what your guests want and whether they’ll pay more if you make their travel plans even easier. Perhaps you can increase your tour price by adding in a meal or transportation option as part of specific tours.

As you look to create added value travel , you’ll see more guests share and rave about you on review platforms. One way to look at this is to view every booking as an opportunity to provide guests with more value than they’ve paid for, especially if the activity the experience is a once-in-a-lifetime opportunity.

5. Seasonality

Do you find yourself with an insane summer season or is the wintertime busy with bookings? Depending on your tour business model, certain expenses, like staff wages can significantly increase your costs depending on the season.

As part of your seasonal marketing strategy , you’ll find a different approach might work better. One option might be to offer early bird pricing deals in the Winter ahead of the Spring season.

Your tiered pricing strategy might be encouraging smaller groups to book together. With different tactics that speak to your customer’s needs, you can incentivize guests to book and stay longer depending on your pricing objectives. 

Sure, seasonality may mean dramatic fluctuations in your pricing. And while the tipping point might be 20-30% lower than what you could charge for the same experience in your busy months.

At the end of every busy season, aim to dedicate one day to reviewing reports from the last 3-6 month’s worth of bookings. This will let you see if you’re turning a profit, if your costs are creeping up and whether there are opportunities to boost prices for improved margins.

6. Operating expenses

Administrative, rental and staff wages can play a massive role in your tour business margins. At the same time, it pays to know your overall operating expenses, one of the benefits of a booking system subscription model is knowing some of your costs every month.

This way, you can account for costs and estimated bookings or your sales forecast when pricing your tour. Plus, once you determine your break-even point, you’ll have more knowledge available to help you decide how to price a tour package.

Why profit isn’t a dirty word

Building profit into your tour costing and pricing means you’re creating a contingency plan ahead of slower booking periods. And depending on whether you accept a booking deposit (usually anywhere from 25-50% of the tour price) or require full payment in order to reserve a booking, booking payment(s) may be spread out.

Let’s say you have funds flowing out of the business for overhead or wages for your tour guides, you need to be able to recoup the cost of doing business with your tour prices.

Cash flow is essential when you’re building and scaling a tour business. And why it’s in your best interests to build in profit from the beginning.

Profit margins might look like anywhere from 10-40% of your posted tour price, depending on your specific business model along with the season. Sure, businesses are designed to make money. The added benefit of running a profitable business is that it gives the power to determine when and how fast you scale.

Remember, you’re in the business of providing memorable experiences for your guests. If you’re committed to being it for the long haul, tour costing and pricing needs to reflect your hard work. In order to serve future customers, by strategically pricing your tours, rentals and activities, you’re setting your business to run sustainably, over the long term.

What goes into pricing private tours

Given how the pandemic impacted group tours in many parts of the world, private tours have grown in popularity. In addition, your capacity for multiple tours will be limited if you focus on private tours, which explains why pricing for these types of tours is typically higher.

Sure, you might not have to pay as much in staff wages, as part of your variable costs, but you still need to account for fixed costs with your tour pricing.

In addition, some guests are willing to pay more for the convenience of having a guide all to themselves. And according to this Tourpreneur article on pricing private tours, you need to distinguish how private tours differ in value when compared to group pricing in marketing efforts.

Let’s say you have a couple who prefers to tour at their own pace. Perhaps they find group tours exhausting or they would rather have the flexibility to explore hidden gems at a different pace or time. If niching into private tours, account for the limation placed on you without being able to charge more for each individual person who joins the tour. So, where does this leave you? 

You need to charge accordingly for your time. Is it more expensive for the two people booking a private tour? Yes — most likely. 

Since private tours are considered more of a luxury offering, private tour packages typically yield a higher price point. For guests, a one-on-one experience offers increased value through flexibility and personalization.

How to increase margins and reduce expenses

Every tour business has to account for fixed and variable costs which can fluctuate between the seasons. With inflation and operating costs rising each year, it’s worth reviewing pricing on a yearly or even seasonal basis. Savvy tour operators account for a marketing budget (consider this money you get to spend targeting your ideal guests and have fun with it).

Explore marketing distribution by exploring different channels, like OTAs as needed to help increase bookings as it makes sense for your business.

As distribution channels that can get you more bookings, OTAs typically take a commission of anywhere from 15-30% of your booking fee. As a result, setting aside some revenue earmarked for business promotion can increase direct bookings which allows you to keep more in your pocket.

Your bottom line refers to the amount remaining on a balance sheet displaying a company’s financials. Another term for this is net profit, or what’s leftover after commissions, expenses and salaries are factored in.  

Most importantly, this is where seeing where your revenue meets your expenses, so you can charge enough to cover costs and still come out ahead. 

As an added bonus, looking at your sales forecast can also help you in determining what type of booking software to invest in. Generally, you’ll have the option of either a fixed monthly subscription or a commission fee. Other reservation technology providers take a percentage of bookings with fees running anywhere from 5-6% depending on the provider you choose. 

Final thoughts

Tour pricing is worth revisiting before diving into and after every busy season. In your slower times, you can evaluate data from previous bookings. With this insight, you can create even better, and more profitable, packages going forward.

Always look at what gets guests in the door. Is it your superior service? Is it your consistency and reliability? Are you a master at personalizing private tours or is your seasonal pricing strategy right on the money?  

People are much more inclined to buy from companies they know and trust. Feel free to look at upselling opportunities to increase revenue and provide added value for your guests.

Look ahead and set some goals for where you want to be. Continue to lean into your pricing strategy so you have solid momentum to build and scale your business to meet the pent-up demand for remarkable travel experiences. 

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5 Things to Consider When Costing and Pricing a Tour

One of the key factors for success in the tourism industry is the right tour costing and pricing. Set the price too high and people won’t buy. Set it too low, and you’ll go out of business .

To ensure that consumers purchase your tours and partners promote them, your prices must be consistent, accurate, and competitive.

If you are developing a new vacation package, have you considered listing your existing tour offer on various distribution channels? Or perhaps attract another type of travelers?

• The Best Distribution Channels in Travel and Tourism

The cost and price of your products are connected with the decisions you make in the early stages of product development.

This article will help you determine the individual elements that make up the cost and price of your products. Read on and learn how to better costing and pricing a tour.

What you should consider when costing and pricing a tour

Finding an optimal price for your travel products involves researching, doing some math and a little bit of trial and error .

Below you can find what is necessary for a tour operator to get as close as possible to the ideal price of a tour.

Define your pricing objective

The pricing objective is the goal you want to achieve with your pricing strategy. There are multiple pricing objectives, some of the most common are:

• Premium pricing — charging a high, rarely discounted price to preserve the status of your brand.
• Differentiation — thinking of price as one of the differentiation factors of your brand. For instance, you could aim to be the best budget travel company in New York.
• Closing sales — closing as many sales as possible, which often implicates negotiations and discounts.
• Price leadership — setting a lower price than the competition.
• Price discrimination — charging a high price to customers who are willing to pay more while still selling to price-sensitive customers. For example, by offering coupons that are valid only on Thursdays, you may attract price-sensitive travelers while travelers who are willing to pay more will travel at their convenience.

Take your time to choose the right price objective for your business. You should pick the one that is in accordance with your marketing, financial, strategic and product goals.

• How to Profit from a Discount Strategy for Tours and Activities

Remember, business and market conditions change over time, and may your price objective as well. Review it when you feel it’s necessary, and don’t be afraid to change it according to a future business scenario.

Determine the demand

The demand has an important role in tour costing and pricing

According to Investopedia :

Demand is an economic principle referring to a consumer’s desire to purchase goods and services and willingness to pay a price for a specific good or service.

Demand in the tours and activities sector means how many tourists would book your tour for a determined price.

Other factors that have a direct impact on the demand for your experiences are:

• The degree of competition in your market
• How unique is your product
• The quality of the overall experience

To estimate the demand for your product, you can perform surveys, price experiments, and statistical analyses. Creating your ideal customer persona will also help you measure the size of your market.

• Get to Know the Ideal Customer for Your Tour Business

Calculating demand may be a complex task, so it’s a good idea to hire a specialized company to handle it for you.

Estimate your costs

Costing an experience is different than costing a good.

For the first one, you are essentially selling a service . Of course, your offer may include add-ons that are goods. But pricing those items is not the objective here.

To price an experience you should consider the many expenses needed to keep your business running. From energy bills to organizing, distributing, selling, and leading a tour.

Your final price should be able to cover all the expenses directly related to the tour, and also a fraction of the expenses that will occur despite the tour. Those are the direct and indirect costs respectively.

Some of the expenses connected to a tour operator business are:

• Maintenance of the equipment used during the tour/activity
• The salary of tour guides, sales personnel, customer service, etc.
• Training courses you will offer to your staff
• The commission for distributing your tours — depends on your chosen channel (business partners, direct bookings, Online Travel Agencies, etc.)
• Internet, mobile phone, energy, rent, and other bills
• Government taxes according to the country you operate
• Your monthly investment in marketing

The list of expenses goes on. But you should know all of them to better costing and pricing tour tours.

For that reason, don’t hesitate in asking for help from a professional accountant. Setting the correct cost will save you a lot of money.

Analyze your competition

Tour operators should benchmark their prices against competitors to establish a reference price.

A reference price is a price that a traveler considers fair to pay for your tour in comparison to competitors’ tours.

When benchmarking the competition you should note the differences between the experience you are offering and the ones your competitors are offering.

What are their differentials? What is their price? Which channels do they use to distribute their tours? Who is the market leader? What are their payment conditions?

Each detail matters. By understanding your competition it will be easier to see your own strengths and weaknesses, and what is considered a fair price for your tours in the eyes of your customers.

Select a pricing method

Unfortunately, there isn’t an ultimate formula for tour costing and pricing. Although would be great just to add the inputs, set the parameters and… voilà! Here you go the right price for your experience.

As I said at the beginning of this article, finding the price that works better for your business is more or less a trial and error journey.

The good news is that you can use one of the methods I’ll describe below as the starting point for your journey.

Cost-oriented pricing

This method involves calculating the cost of a tour and then adding a percentage markup to determine the final price. That’s the easiest way to calculate what a tour should be priced at.

There are essentially five ways that you can do that:

• Cost-plus pricing involves adding a certain percentage to the cost to fix the price. For example, if the cost of a wine experience is $150 per person and the marketer expects 12% profit on costs, then the selling price will be $168. The difference between the selling price and the cost ($18) is the profit.
• Mark-up pricing is a variation of cost pricing where tour operators increase the cost of a tour before offering a significant discount. That way, travelers feel like they are getting a deal and travel companies can get more profits. Mark-ups are calculated as a percentage of the selling price and not as a percentage of the cost price.
• Mark-down pricing means that you offer your products at a discounted rate in order to increase the number of bookings you receive.
• Break-even pricing covers all the relevant fixed and variable costs. The sales revenue equals the cost of sold tour and vacation packages. There is neither profit nor loss.
• Target return pricing is the pricing method where a tour operator sets prices to achieve a certain level of return on investment (ROI).

Market-oriented pricing

When using this method you will set a final price based on the current market conditions.

This means you should know very well the market that you are operating including your competitors, demand, etc.

This method fits well with companies that offer products with a high intangible value . That’s the case for tour operators.

Each experience is unique and customers will perceive a higher value as more memorable the experience is.

In a similar way to costing oriented pricing, there are different techniques to find a final price based on the market:

• Perceived value pricing considers perceived value as the primary factor for fixing prices, and the costs as a secondary factor. If the customer perceives a higher value, then the price fixed will be high, otherwise, it should be lowered.
• Going-rate pricing sets the price by major competitors. If a major competitor changes their price, then the smaller travel companies may also change their price, irrespective of their costs or demand.
• Customer segment pricing : Here different customer groups are charged different prices for the same tour depending on the size of group bookings, payment terms, and so on.
• Time pricing : Here different prices are charged for the same tour at different departures or season. It includes off-peak pricing, where low prices are charged during low-demand tunings or season.
• Area pricing : Here different prices are charged for the same tour in different market areas. For instance, a travel company may charge a lower price in a new market to attract travelers.

If you want to dive deeper into the matter, the book Pricing Done Right is a good start.

Calculating the tour costing and pricing is essential for all tour operators and it’s something that should be done in the early stages of your business.

Finding the right prices for your products will prevent future losses. If you are in the market for a while, consider checking your pricing objectives and updating your market research.

That is something you should do once in a while to make sure your prices are competitive and that you are receiving what is fair for your tours.

If you found this article useful, download our guide The Best Way to Price Tour and Vacation Packages .

ORIOLY on August 18, 2021

by Felipe Fonseca

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Low Budget Digital Marketing Strategies for Tour Operators

In this ebook you will learn strategies to boost your digital marketing efforts, and the best part, at a low and even zero cost for your business.

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New year, new Orioly version! 

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The all-in-one tour operator costing sheet

Make a budget. Price your tours. Increase your profits.

Be strategic about your pricing

Are you basing your prices on what you see in Tripadvisor? Find the right price for your tours by factoring in how much profit you’d actually like to make.

Get your free copy now

Let the numbers guide you

Always feel confident about your tour prices. Simply plugin your overall costs to see what you should be charging to cover your expenses. And play around with your seasonal pricing to make more during your peak times or drive bookings when it’s slow.

Tour costing example included!

We’re not going to lie; this tour operator costing sheet is extensive. But there’s an example and helpful notes you can use as a reference along the way.

More tips on pricing and promotion

• How to Make Tour Packages That Sell Themselves
• Why Tour Photos Make the Best Souvenirs
• How to Create an Early Bird Pricing Strategy
• How to Sell Out In Advance with Group Pricing

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Tour Package Proposal Powerpoint Presentation Slides

Break the monotony of your daily routine and take time to unravel yourself with a getaway trip. Give yourself a deserved break to experience new life experiences. Get out of your comfort zone and re-discover yourself by exploring new places around the world. Exploring not only rejuvenates but also fills you up with new knowledge, aptitude, idea, friendship, and wisdom. Thus, offer a memorable travel experience to your customers by taking the aid of our Tour Package Proposal PowerPoint Presentation Slides. Take the assistance of our PPT template to provide cost-effective travel solutions and expert advice on streamlining the travel expenditure. Utilize these PowerPoint slides to give a detailed account of the travel services that you offer keeping the clients’ personal needs, budget, and company ethics into consideration. Mention every aspect that your company handles like tourism, visa assistance, bookings, accommodations, travelling insurance, and event planning by taking the aid of this systematic holiday package PPT layout. Display the trip overview in an organized and attention-grabbing way to indulge your customers in your plans through this expertly-designed PPT presentation. Aware your viewers about the additional services like meetings, exhibitions, destination guides, and group travel that your company offers with the help of this informative travel guidance PPT graphic. Each client has different demands that require different investment; therefore, create an outlay structure for different packages by taking the assistance of this PPT design. Allow your viewers to choose wisely from the wide range of services offered through this PowerPoint presentation. With the aid of this PPT slideshow present an attractive business overview of the organization and assure your audience about your company by displaying your strengths, achievements, vision, mission, and goals. Disclose the statement of work and contract precisely to maintain the credibility of your company with the help of our travel deals PPT visual. Download this ready-to-use PowerPoint template and grab the attention of your viewers.

Break the monotony of your daily routine and take time to unravel yourself with a getaway trip. Give yourself a deserved br..

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Presenting our Tour Package Proposal PowerPoint Presentation Slides. It is completely editable and adaptable according to your preferences and requirements. Take advantage of this professionally created PPT design that allows you to add or edit any text, image, and graph to your presentation making it more attractive and educational. It can also be presented with a different colour, font, font size, and font types. The entire shape and appearance of the objects can be changed in this PPT layout. This template also supports standard (4:3) and widescreen (16:9) sizes. It presents you with thousands of editable icons for your topic to choose from. This slide is also suitable for Google slides. Download this PowerPoint presentation and take a step towards growth for your business.

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• Business Slides , Complete Decks , All Decks , Customer Service , Proposal
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Content of this Powerpoint Presentation

In 2023, WION published research stating that global tourism has reached $1.4 trillion. This data indicates that the tourism industry is on an upward curve that translates to profit and growth. Well that’s exciting for businesses, investors, and anyone part of this industry.

As such, businesses better gear up with strategies to reap their share of rewards. The best strategy is to invest in effective tour package proposals that would later herald growth and success. With this vision in mind, our Tour Package Proposal PowerPoint Templates have been designed .

Whom to Cater?

SlideTeam’s Tour Package Proposal PowerPoint Templates are developed considering the various challenges of the tourism industry. The main participants of this industry are travel agencies, tour operators, and travel planners and for them, a package proposal is the best way to communicate with a client. With our content-ready PowerPoint Design you can draft itineraries, share destination highlights, mention transparent pricing, and provide accommodation details to all sorts of clients.

Prepare According to Your Business Requirements

Our PowerPoint Templates are developed by industry experts who understand your business. There is inclusion of flexibility and customization so that everyone can use them to prepare their content.

This means less time spent on design and formatting and more time focusing on developing presentations.

Impress Your Clients

Every business wants to impress their clients, and these expert-designed PowerPoint Presets are your go-to resources. With clients impressed, you’ll generate more buzz and subsequently more sales, the ultimate objective for every business.

Let’s start!

Template 1: Project Context and Objectives for Tour Package Services

Are you looking for a subtle way to communicate the context and objectives of your tour package services? Well, we have prepared a solution for you to show your project’s purpose and goals. Go through our PowerPoint Design to show the context of your tour package services. It will give your audience an understanding of the project's background. Furthermore, objectives can also be highlighted about your services in a simple format showing the benefits to clients.

Template 2: Scope for Tour Package Services

Get ready to take your tour package services to the next level with our PowerPoint Layout. You can display your different services to your clients, such as visa assistance, flight bookings, hotel accommodations, and travel insurance, all in one PowerPoint Framework. Furthermore, there is ample space to highlight your tour packages' unique features and benefits. This presentation template will persuade your audience to choose your services over the competition.

Template 3: Trip Overview for Tour Package Services

Our PowerPoint Framework is focussing on travel agencies and tour operators, who require a solution that can streamline their business operations. It has three designed segments to showcase a trip's essential details. The flight details segment includes the date, departure time, and city, and the arrival time and city. With this presentation design, you can provide minute details about the flights to your clients. The car rental section shows the pick-up date, time, location, drop-off location, and contact information. This section helps your clients plan their transportation. Finally, the hotel details segment includes the check-in date, hotel name, city, check-out date, and contact information. It will show information related to accommodation information.

Template 4: Additional Offerings for Tour Packages Services

Our PowerPoint Framework helps you with meetings, exhibitions, group travel, and destination guides in a professional manner. Furthermore, it was developed with an aim to meet the unique needs of the tour and travel industry. With it, you can display your services, destinations, and offerings to potential clients. Therefore, if you operate in the tourism industry, take the best advantage of this PPT Slide.

Template 5: Package for Tour Package Services

Attract clients and drive sales by showing your tour packages with our PowerPoint Template. It has the space to show three different tour packages, which means you can communicate the value of your tour packages, making it easier to close deals and increase bookings. The package description is a focussed area on this PowerPoint Layout because it has all the essential information, such as detailed hotel accommodations, flight tickets, trip itineraries, transport availability, passport assistance, travel insurance, and more. Who can benefit more from this PowerPoint Setup? The answer is the travel agency.

Template 6: Why Us for Tour Package Services

Our PowerPoint Slide highlights the best points that make your tour package services different from your competitors. It portrays your unique selling points in a subtle manner. Furthermore, you can easily communicate the benefits of choosing your services over the competition to your potential clients and win more business.

Template 7: About Us for Tour Package Services

If you require a presentation template that displays the company's identity, vision, mission, and core values, then explore our PPT Design. You can show everything about your company, such as who you are, your vision for the future, your mission statement, and many more. It is a simple presentation slide, but can impress your audience.

Template 8: Our Services for Tour Packages

Our PowerPoint Preset is a key product for travel professionals who need help showcasing their wide range of services to clients. You can display your services, including travel planning, ticketing, hotel reservations, educational tours, company outings, foreign exchange, visa assistance, air tickets, and insurance. It will help your clients understand the benefits of choosing your services.

Template 9: Client Testimonials for Tour Package Services

Display your clients' positive experiences with our PowerPoint Design. It has the space to input client photos, names, designations, company names, and brief positive messages in your presentations. Furthermore, it will help you convert leads into loyal customers. You can inject confidence in potential clients by displaying real-life success stories.

Template 10: Statement of Work and Contract for Tour Package Services

Now, you won’t have to deal with unclear agreements and misunderstandings in your tour package services. This PPT Design is the reason why. Explore our design-ready PowerPoint Template, that displays the services rendered, establishes payment terms, defines cancellation plans, ensures confidentiality, and outlines the terms of termination. Furthermore, it provides mutual cooperation and sets clear expectations for both parties. Therefore, there will be no uncertainty in the contracts with your clients.

Gain More Clients with Our Templates

In conclusion, these presentation templates are a perfect solution for people working in the tourism industry. As a part of this industry, you can enhance your presentation quality and efficiency using these PPT Solutions. Furthermore, these PowerPoint Designs help users to develop proposals that leave a lasting impression on clients, driving success in the competitive travel industry with their user-friendly customization features and professional design.

Tour Package Proposal Powerpoint Presentation Slides with all 33 slides:

Use our Tour Package Proposal Powerpoint Presentation Slides to effectively help you save your valuable time. They are readymade to fit into any presentation structure.

Ratings and Reviews

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December 28, 2021

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