Learn Tour Costing
Tour Costing for beginners, in this episode we take you through how to effectively price your tour/safari package with accuracy and zero errors. It is so simple to determine and come up with the final price of a tour. A number of factors to consider in any tour costing.
Using an excel sheet is more accurate than the manual system of book recordings. The excel program being used computes accurately avowing human errors but this requires minimum skills in using this program – we recommend you seek knowledge on how to use excel in computing figures well, this saves time, and be assured of high accuracy levels in your pricing.
For beginners here are key things always to consider in your tour cost.
1. A well-defined and composed itinerary to follow
For accuracy in quoting your tour or coming up with the right price, you must start by developing a proper itinerary. This must spell all the activities that your guests will take part in, those that require relevant special permits, and entry fees must be considered. The itinerary will spell out the mode of transportation to be used, the hotel choices, and the duration of the entire safari for all your budgeting requirements
2. Attain the number of people (Composition of the group)
It is important to know the number of people you’re dealing with prior to your tour cost. The number of guests will assist you in determining the mode of transfer vehicle to use, how many vehicles to budget for, the number of rooms to budget for at a specific hotel property plus the number of entry permits or activity permits you may require. Without the right number of people taking on the tour, it is impossible for you to do the tour costing.
3. Preferred Rooming at various lodging facilities
understanding the rooming required by guests is important in tour costing. You could be planning for a family that requires connecting rooms other than 2 separate doubles/twin rooms. You could also have a group of 10 Passengers but take on 10 singles rather than 5 doubles/twins. To add rooming category is the room type i.e. the Suite, Executive room, standard room, deluxe room, and tents all these are critical in pricing your tour.
4. The market rate of the tour components
Remaining competitive is key in business so in tour costing to be able to secure booking. Have a price list or an accurate tariff guide of tour activities, car rental fees, and valid hotel rates among others. Consider average net pricing always that would put you on the winning side of your business. You don’t have to be the cheapest option available, but you shouldn’t be charging 5 times the market rate either.
5. Consider the Key interest of your customers
Each customer has unique interests in tourism. For example, you have those that wish to do gorilla trekking and others would not wish to do so, those that are comfortable driving and others prefer to fly from one park to the other, some wish to simply relax and other be active all day. Understanding key interests help you in building up the right items as components in your tour cost. To clearly attain the key interests of your customer, please engage your customer by asking questions relevant to help you plan and cost better for him or their family be it a group, and customize to their needs.
6. Set your Mark-up/ profit margin
Deciding how much profit you would like to make is key in tour costing. The idea here is not to charge so low or too high but it is important to know the purchasing power of your customer based on a few indicators including key interests, room types, selection of hotels and mode of transfers, etc. However, the most common way to figure out your profit margin is by using the cost-plus pricing method. You simply take the cost of running your tours or activities and add $Y or Y% to your cost. Y then becomes the markup you wish to make.
Get an opportunity to become a tour sales manager, through our training sessions that we extend to the public with a vested interest in operation tour firms and agencies in Uganda and the wider East Africa. We appreciate your trust in what we are trying to offer. We hope this has been very helpful.
