All you need to know about tour package costing
The issue of pricing a tour package costing has long been resolved in many countries, especially developed countries. But the tour package costing depends on several factors. The first issue to have a proper understanding of costing is understanding the market in which companies in an industry operate. The market structure of the tourism industry can be considered very competitive.
Characteristics of tour package costing
The first issue to have a proper understanding of costing is understanding the market in which companies in an industry operate.
The market structure of the tourism industry can be considered very competitive because it does not face many barriers to entry, most of its activities do not require much capital, the necessary permits do not require high costs, and in most cases, there is no need for special equipment. The same is true for agencies and tours.
In general, since the barriers to entry into this business are not so significant, the nature of this market is competitive. But what influence can this have on the competitiveness of tours and tour packages and, of course, attracting customers and the pricing method and restrictions of tour operators?
Essential strategies of the tour package costing
In general, there are different types of costing strategies, each of which can be effective in different situations or lose its effectiveness in other situations.
The market is competitive for tour activities. The pricing strategy adopted by active tours in this market is competitive. A company cannot be far from the price offered by other active tours in the market for a tour package costing in a competitive price strategy.
With the market in this state, tour operators worldwide are pursuing two primary strategies to gain competitive power over their competitors. The use of discounts for various occasions is such that it can cover a wide range.
For example, some foreign tours set up a loyalty program with the intention of “targeting total expenditure”; In this way, for customers who spend more than a certain amount on tour, they give a free trip with one of their friends as a gift.
On the other hand, in a competitive strategy of tour package costing, to show the added value of a tour company and attract more attention, small offers and gifts such as visiting a particular place, free meal and the like form the second strategy.
There is another pricing that combines goods or services to enhance the value of their work and thus increase the price of the products they offer. In this type of pricing, creativity is done in tours, and this type of pricing in tours is mainly used to prepare travel packages.
For example, one of the tours of Turkey to visit some architectural monuments, beaches, Mediterranean resorts, and ancient cities provides a package for the citizens of that country, the value of the services provided is 105 Euros.
Still, the company provides all the above with 90 Provides the euro. This strategy of tour packages can serve both consumer interests and tours. One way tour operators of foreign companies do this is to use “visible pricing.” Invisible or visible pricing, the components of a travel package are listed separately, each at a cost, to give the customer a good understanding of the price offered to them.
Price discrimination policies in tours
Price discrimination is one of the essential micro-pricing strategies that different companies consider for their purposes. Price discrimination occurs when similar goods or services offered by a company are sold to different customers at different prices.
There are many things to consider in this type of pricing, from loyalty discounts for customers who use a company’s services many times to differentiating the types of customers according to and understanding which category has the highest ability to pay. In fact, on this basis, the company can receive the maximum amount that a customer is willing to pay.
In general, price discrimination is divided into three categories.
1. Personal pricing
In pricing using price discrimination of the first type, which is also called personal pricing, the company offers the same services to its customers at a different price. This type of pricing, primarily used in auctions, may not be widely used in the travel and touring sectors.
2. The little change
In the second type, little change is made in the products and services of tour package costing so that it can be offered to customers at different prices. It can be said that the price of the services provided is related to the amount demanded.
In this type of price discrimination, the price can be changed according to the number of demands. For example, if a tourist desires to travel with his family or with many people, such as friends, a discount can be given to it compared to single or smaller trips.
3. Market division
In type three price discrimination of a tour package, the market is divided into different categories, and a different price is charged from each segment, but the price is the same for the members of each segment.
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