tour costing sheet

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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Automatic Tour Cost Calculation for Travel Agencies & DMCs

Travel agencies and DMCs create lots of Tour Itinerary proposals for Tour package queries from B2B & B2C Clients. One of the most important aspects of the Tour Itinerary building process is tour cost calculation and defining the selling price of the Tour Itinerary proposal.

To calculate the tour costing, you need to check out the cost of Hotel Room (Extra bed price if needed), cost of meals, Transportation cost (Airport Transfers and Sightseeing cost) & Activities cost. You collect all these data in a paper or excel sheet to calculate the total cost and Also, you add your markup and GST to get the final Tour cost. Also, you need to do the same process again if you have received any change in itinerary from a customer.

If you need to calculate the per person costing then you need to get the cost of every service for every person involved in the Tour which requires more time and effort.

Let's take an example of Andaman Tour Query received from B2B agent: -

Requirements:

• Tour: 6 days for Family of 4 Adults and 2 Children (12 Yrs, 8 Yrs) from 25th Dec 2022
• Places to visit: Port Blair, Havelock and Neil Island
• Hotel Preference: 4 Star Hotels on MAP Meal Plan
• Special Preference: Scuba Diving, Luxury Ferries and Glass Boat Ride

General Tour Cost Calculation Process

• So, You search for Hotel cost for every place according to the Tour date and Room Type, Transfers & Sightseeing cost for everyday, Cost of ferries and Activities. Sometimes you need to ask the cost of Hotels, Transportation and Others from managers OR colleagues.
• You paste all the components costing into an excel sheet or paper and You loosely calculate the total cost of Tour.
• You add your markup and GST on the total cost to get the Final tour costing.
• If you need to provide the per person costing then you calculate the cost of every component for every person.
• If a customer asks you for changes in Tour Itinerary (4-5 changes for every convertible query) then you need to do the same process again.

Facing issue of wrong price calculation?

Manual tour cost calculation (Loosely calculated tour cost) brings lots of problems for Travel Agencies and DMCs like wrong tour cost calculation, error in picking up the component price and NO trail OR record of cost calculation if required later by the reservations team. Also error in tour cost calculation brings revenue loss and sometimes hurt the goodwill of Travel Agency.

But Sembark Travel Software is here to help the Travel Agencies and DMCs to automate the Tour cost calculation which is error free and fast.

How does Sembark Travel Software Automate the Tour Cost Calculation Process ?

Auto hotel cost calculation.

Auto prices fetch from database for hotels as per room type, meal plan, extra bed requirement (Adult, Child) & Date and provides the Hotel cost by combining costs of all hotels

Auto Transport & Activity Cost Calculation

Auto prices fetch from database for Transport (as per cab type, type of service & Date) and Activity cost (as per day type of activity, Adult/Child/ Group and Date) & Auto Calculate the total cost of Transports and Activities

Auto Per person price

Automatically calculate the per person cost (Adult and Child separately) as per the Hotels, Transports and Activities of every person involved in the Tour

Markup & GST

Define markup in % OR absolute markup OR per person wise markup and GST & Get the Total Tour Cost

Do you want to know more about Sembark Travel Software ? We are ready to answer all the questions and explain how it can help you to Transform your travel business.

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What is Tour Cost? Components, Types of Tour Costs

• Post last modified: 19 January 2023
• Reading time: 21 mins read
• Post category: Uncategorized

What is Tour Cost?

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.

Table of Content

• 0.1 What is Tour Cost?
• 1.1 Research and Development Cost
• 1.2 Travel Cost
• 1.3 Accommodation Cost
• 1.4 Food and Beverage Cost
• 1.5 Sightseeing and Activity Cost
• 1.6 Marketing Cost
• 1.7 Administrative Cost
• 1.8 Miscellaneous Costs
• 2.1 Direct costs
• 2.2 Indirect tour costs
• 2.3 Fixed costs

The identification of cost unit will help to cost manager to separate the cost into smaller sub-divisions attributable to the 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.

However, in reality, it has only two basic components;

• Travel services
• Ground services.

Components of Tour Cost

The cost of a tour package includes:

Research and Development Cost

It is the cost incurred when planning a tour package. It includes the cost of the tour planner, manager and staff of the company who are involved in tour planning. The main activities in the research and planning phase are:

• Study the economic factors influencing the future development of package tours.
• Identification of likely selection of destinations.
• Make an in-depth comparison of alternative destinations.

These phases require in-depth research work and hence this requires a good amount of money. The tour planner, marketing researchers etc have to work rigorously for the tour planning activities. The main activities in the tour development are:

Destination Research

The decision to develop and formulate a new package is a multi-stage process that involves various steps. Normally, the idea for a new product comes either from the tour executive within the company due to a review of the questionnaire completed by the previous tour members or because of the political, social and economic developments in a particular area.

When a tour planner sees that a large number of clients are interested in taking a trip to particular destinations, naturally, those destinations become the nucleus of a new tour concept. Moreover, the forecasting of future development is affected by changing circumstances in the market.

Some of these circumstances are:

• Change in tourist patterns
• Transportation cost
• Accommodation and other cost
• Exchange rate prevailing
• Inflationary conditions
• Competitive environment
• Extent and support from airlines serving the routes
• Support from national / regional tourist office of the destination
• Political stability of the country
• Attribute to and state’s control over mass tourism within the country
• The relation between the host and tourist generating countries

Market Research

Since tour package is a complete tourism product, obviously, before formulating this product, market research should be done and the data to be analyzed and assessed in a systematic manner. Market research provides us the answer to the following questions.

• What is the size of tourism market?
• Who are the existing clients?
• Who will be the potential buyers?
• Who are the competitors’ – their area and strategy?
• What price will the customer accept?
• What facilities are available and required?
• What are the constraints? (License, permission, taxes, finance, restrictions, taxes etc)

Once we know the basic components of a package tour, distribution channels, market conditions, constraints etc., we can develop a marketing strategy. It also enables the smooth functioning of the tour company and also offers a clear picture of the tour programme.

The planning stage also includes the cost of the Familiarization Tour (FAM) and any other costs incurred to develop a new or old package tour. Generally, a tour planner works on several tour packages. The allocation of cost is based on two methods

Both the methods are important. Long-term cost deals with the tour planning and development and the second deals with initial tour development. So for determining research and development costs, the tour management must project this cost at first. Secondly, the company should divide the tour into a minimum of 10 or 12 tours. This figure is added to the total cost of the package sold.

Travel Cost

This cost includes the cost of travel in different modes like air, road, rail, land etc. In other words, it is the total cost incurred for travel from a point of origin to a point of destination through any mode of travel. A commercial air ticket sold on a regularly scheduled flight is a simple pricing procedure. The prices quoted include all the applicable charges.

Tour operators have to worry about airport transfers too. Pricing charter flights is little more complicated. Frequently, modes of transport are combined or used sequentially to achieve the objectives of the tour.

For example, there are fly/drive tours that use a combination of aeroplanes and rental cars. Some tours offer fly/cruise packages, wherein the travellers fly to a port of embarkation and then board a cruise ship for most of the tour.

Other commonly identified types of tours feature the name of the dominant mode of transport. For example, a rail tour uses train as the mode of transportation. Perhaps the most widely recognized form of touring is motor coach tour, which as the name implies, utilizes buses or motor coaches to move the participants from destination to destination and to visit sightseeing attractions along the way. Most motor coaches have 46 to 48 seats.

Accommodation Cost

Virtually all package tours that are longer than a single day include some type of accommodation. Accommodations range from a simple tent to luxurious hotels and resorts and as such can be tailored to fit to any tour member’s budget. Typically participants choose accommodation from different price ranges. It is the price paid to acquire a stay in any accommodation unit.

The accommodation costs depend on the negotiation between the hotel management and the tour manager/ planner, and other elements of hotel products like, food, beverage and amenities etc. Once the cost is finalized, it is added to the total cost of the package tours. Hotels, motels resorts, tribal huts, homestays etc provide accommodation facilities for the guests and tariffs vary considerably depending upon the type, standards, services, facilities, location etc.

Transfer cost Transfers are any mode of transport that shuttles participants from their point of arrival, frequently an airport, to their first accommodation, typically a hotel. It is incurred for transferring the client from the airport to the hotel or vice versa.

The cost is according to the contract with transport companies on mileage or duration basis. Virtually any type of transfer is possible, such as a shuttle bus between a railway station and a cruise ship. The transfer is an important component in the tour cost when the destinations are distant from one another.

Food and Beverage Cost

Lodging meal plans are also important among the tour cost components. Wide ranges of meal plans are available on package tours. The level and type of plan is one of the factors that significantly affect the cost of a tour.

• With American plan, tour participants receive all three daily meals as part of their tour package. The American Plan (AP) is common in cruise packages that visit more remote or isolated destinations.
• Tour participants, under the Modified American Pan (MAP), receive breakfast and one other main meal, usually dinner.
• Dinner can be either the mid-day meal or the evening meal depending on the country and tour. The room plus a continental breakfast is called a Continental Plan (CP). With this type of plan, tour participants receive a daily light breakfast such as bread, jams, fruits, cereal, coffee and tea. Continental plans vary from country to country, however, in certain countries; a more extensive menu is available and may include meats, cheeses and even boiled eggs.
• European plan does not include any meals and present a significant saving to the tour operator. Under this type of plan, tour participants are required to pay for all of their own meals. Lodging properties that use meal plan pricing quote prices per person, not per room.
• In Bermuda Plan (BP), tour participants receive a full cooked breakfast, but no other meals are provided.

It is important to note that one way of saving money is by reducing or eliminating meals that are included as part of the tour. The type of meal is also an important consideration in tour cost. For example, a tour operator who offers five lunches and five dinners as part of the package is offering more than an operator who offers ten breakfasts.

Similarly, a tour operator who allows participants’ unlimited menu choices at a destination is more than one who restricts the participants to a selection of three main dishes or a set menu. It is important to pay attention to theses details when costing the food and beverage component.

Sightseeing and Activity Cost

This constitutes a major portion of the tour cost which makes the clients satisfactory or unsatisfactory. Usually, this cost is calculated per person. Generally, a package tour includes sightseeing as an important component.

For Example, a 2 Nights and 3 days package to Sri Lanka will definitely include a half-day or full day sightseeing as a compulsory part of the package. This component takes a major fraction of the package cost and again varies with the mode of transportation used. The destination vendors offer these activities less expensively to a group.

Marketing Cost

In this world of globalization, no organization can withstand without marketing. Proper marketing should be done for the success of any product. Tourism products are not different from this. Package tours and ancillary products have to be marketed properly, which constitutes a major fraction of the company’s budget.

The marketing budget of the company should be allocated in such a way that it reaches the audience more deeply and effectively. Promotional activities include advertisement, sales promotion activities, public relation, telemarketing, direct marketing etc. All marketing effort should be based on AIDA principle, i.e., it should create attraction, generate interest, arouse desire and initiate action. For this, cost should not be a constraint.

Administrative Cost

The administrative department plays a vital role in a tour company, which handles all the background paperwork and office functions including:

• Looking after telephones, faxes, telexes, personal; computers etc.
• Handling the post
• Dispatching documents to clients.
• Sending paper print outs (tickets, rooming lists, etc) to the concerned departments.
• Looking after office maintenance, cleaning etc.
• Staffing the reception and switchboard.

Handling of the above administrative functions requires a good fraction of the cost. Administrative cost is the expenditure incurred by the tour company in formulating the policy and strategy for directing the organization and controlling the operations.

Administrative costs and incidentals include things like brochure printing, postage, charge for telephone charges, baggage, nametags, flight bags, etc. In the era of competition and revolutionary developments in information technology, potential clients have to be contacted and served. So mobile phones to the executives, Internet, events and cultural galas for the industry people like travel agents, travel executives, travel writers etc are indispensable.

These costs are incurred in the general and financial management of travel business such as office expenses, salary to staff, audit, insurance/legal expenses etc are also important. These are fixed costs and the allocation of these expenses to a particular tour or service may be too much as there are many tours/ services that a company can offer at a particular time. Usually, it occupies 15-20 % of the cost of sale.

Miscellaneous Costs

The miscellaneous costs vary from organization to organization. These costs include portage at airports, tips at airports, hotels etc, entrance fees, insurance premeuims, literature and other materials, and gifts given to tour members at the beginning and end of a tour, welcome drink, welcoming event/ reception etc. These costs are determined by adding up the per-person cost of each item.

However, the percentage of each cost to total tour cost is different for a new tour company as compared to an old tour company. In the case of a new tour/ travel company, that has not developed its reputation; the miscellaneous expenses figure should be between 10 to 15 per cent of the total tour cost. In case of an established tour company, this figure should be one to two per cent of the total cost.

Types of Tour Costs

The tour cost can be classified into two categories depending upon how it affects total cost structure of a tour.

Direct costs

Direct costs are those, which are incurred and conveniently identified with a particular package tour such as accommodation costs, travel costs, food and beverage costs, sightseeing costs etc. These costs are readily traceable to a specific tour.

For example, the cost of a guest’s food and accommodation will directly reflect in his tour cost. The price differs when he undertakes his travel by car, flight, motor coach etc. Suppose a guest opts for Modified American Plan during his stay in a five-star hotel, the total package cost will be less compared to the package cost of a guest who opts for American plan.

Indirect tour costs

There are many costs involved in making and marketing tours that are not so readily identifiable as the direct tours costs. Indirect tour costs are those costs which are incurred for the benefit of a number of tours that are offered by a travel company during a year or a particular period but cannot be conveniently identified with particular tour costs such as marketing costs, tour planner’s costs, financial and legal costs, administrative expenses, FAM tour costs, medical expenses, insurances and so forth.

The total tour package will be based on a fraction of all these indirect costs but are not able to easily identify with a particular tour.

Fixed costs

Fixed costs are those, which are incurred even when one is selling or not selling any tour package. Maintaining a motor coach would add to fixed cost since some expenses are incurred whether or not one or all seats are occupied.

When a tourist/ client or a group of people go on a tour, one has to incur some expenses such as FAM tour, cost of a tour bus, research and development expenditures, marketing expenses, tour manager’s and tour planner’s salary etc. These are all included in fixed costs. These costs are constant in total amount, but fluctuate per person/ per package as the level changes.

Fixed cost is also known as period cost because it is dependent on time rather than on output. The management of a tour company can control these costs. Fixed costs are those costs that remain stable regardless of how many tours are sold or how much revenue enters the business.

Rent, interest on mortgage, insurance and costs associated with minimal staffing levels (including the owner’s draw or salary) are the primarily fixed costs of a tour operator. If a tour operator is unable to pay fixed costs, the door must close.

Variable Costs

In contrast to fixed tour costs, some tour costs tend to vary in direct proportion to the level of sales or number of tour participants. Costs, which are incurred only if a passenger actually uses the service, are variable costs. Tour variable costs are those, which vary with the number of tourists participating in the tour. Examples of tour variable costs include admissions to attractions, hotel rooms, and meals. For example, food and beverage costs, the cost of the gifts, brochures, tourist taxes, entrance fees, room costs etc. play an important role in making a tour costly or cheap. The cost is also known as product cost because it is based on product rather than on time.

Air transport would be a variable cost. This service would not be paid for unless the seat was occupied, except when certain fares are used which cannot be refunded to the passenger, e.g., for group travel when the minimum group size is specified.

Or when a tourist /client or a group of people go on a tour, one has to bear some expenses such as ‘FAM tour, cost of a tour bus, research and development expenditure, marketing expenses, tour manager’s and tour planner’s salary etc. These are all included in fixed costs. These fixed tour costs are constant in total amount but fluctuate per person /per package as the level changes.

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An Excel How-To: The Tour Operator Guide to Booking, Marketing, & Ops Data

• Business Operations

Basic Tour Business Reporting

This is a step-by-step guide for anyone with the gumption to take on Excel. But don’t worry, I promise you won’t need to be a data wizard to follow along. We’re starting out simple: a few key formulas that will break down your tour’s booking, marketing, and operations data. If you’re looking for more advanced reporting, we have an article for you as well.

And in case you missed it, I’ve written a separate post explaining why these statistics matter and how you can interpret them to grow your tour company.

But for now, we’ll prepare basic statistics about your business’s booking channels: back office, online, mobile, and more.

Step 1: Export your bookings

First things first: Export your data from your booking software . If your reservation system gives you the option of exporting all your transactions or your booking orders, choose the latter.

For the purposes of this article, I’ll be providing reporting instructions based on Xola’s Excel export, though I realize yours may look different.

Open your report to the Orders tab. You should see Booking ID as the first column on the left. Before we make any calculations, we’ll want to establish some global filters for more accurate results.

You may only want to analyze data relating to confirmed bookings. Here’s how you’ll exclude all any cancellations: Select Row 1 of your spreadsheet and apply a filter to all the columns. Now, single out the Status column. Click on the triangle in the top right of the Status cell. This will pop open a black box where you can see the different values represented in the column. Uncheck “Cancelled.” After applying a filter, the triangle will look more like a funnel.

Last thing: if you’d like to compare statistics for different tour listings, make sure you have your desired listings selected in the Experience column (second from the left).

Now you’re ready to proceed without having any of these later on:

Step 2: Booking analytics

As I mentioned in the introduction, the following booking statistics provide a comfortable introduction for beginners to Excel reporting. If you’d like to proceed to the more advanced marketing and operations reporting, head to Steps 3 & 4.

In this section, learn how to calculate:

• Your percentage of bookings by source (back office, online, mobile, etc.), both by volume and by value
• Your average booking value by source
• Your average number of guests per booking

Booking volumes and values by source

To get started, we’re going to want to know the total number of bookings. Make sure you have your global filters set (e.g. excluding cancelled bookings or certain listings) and then select the first cell below the Booking ID column. Hold command + shift + the down arrow to highlight the rest of the results in this column and tell Excel to count the results.

(Alternatively, you could simply click on the very top of the column to highlight all the results. But if your column title is in the selection, Excel will also include it since the Count function finds all the cells in the selection that contain content; “Booking ID” is one line of content. If you choose to count your results this way, therefore, simply subtract the number of rows included in the column titles. While Booking ID is only row of text, if you were to highlight all of Column G, for example, “Guest Breakdown” and “Total” would add two rows of text to your column count.)

In a separate sheet in Excel, begin making a table where you’ll keep track of all these computations.

Next, locate column G and highlight the results. Instead of counting the results, have Excel sum the column. You can switch shortcuts by clicking on the triangle next to the Count=2017 example in the picture above.

We want to keep track of the guest breakdown by source so we can find the average number of guests per booking across the different sources, which we’ll cover in more detail in just a bit.

Finally, head over to the Total Value column. You can calculate the total value of your bookings by summing all the cells in this column.

We’ll repeat this process for the different sources in your export to develop a booking breakdown by channel. Go to the Source column and begin by filtering for only Back office bookings. Keep moving through all the sources you’d like to analyze.

Once you’re done, the end result might look something like the table below. Feel free to spruce yours up as desired 🙂

Filtering Tags

By no means should your reporting stop at the Source level. With Xola’s advanced analytics , you can sort results by your booking tags as well. This is especially helpful when it comes to tracking mobile bookings .

Head over to the Tags column. (If yours is especially wide, I recommend formatting the column width to about 2 inches for easier navigation.) Once again, click on the triangle in the top right of the Tags cell. Instead of unchecking boxes like we did in the Source column, this time you’re going to type the desired keyword into the filter search bar.

Because Xola automatically tags any online booking made from a mobile device, you can easily calculate quantity and value of mobile bookings. Double check that your Source filter includes Checkout at this stage or you will not see any bookings tagged “mobile.” Jot down the total amount of mobile bookings and their corresponding value in your table.

Bonus Tag: Rescued Bookings

With Xola, you can automatically engage customers that have shown interest in booking your tour but did not complete the checkout. This is an incredibly effective feature that boosts your online conversion rates and your bottom line. You can see just how lucrative this little feature can be by filtering for bookings tagged “rescue.”

Follow the same steps you did with mobile, but in the case of rescued bookings, they can ultimately happen across any source, not just the checkout. For example, say a person abandons your checkout but is reengaged after your automatic nudge (via Xola). Whether she decides to complete the online checkout or call you up to book, that reservation will be marked with a Rescue tag.

Finding your booking and guest averages

With your stats recorded, you can establish your baseline averages in each of your chosen categories. You’ve conquered the heavy lifting, now a few simple formulas will do the rest.

To find the average value of a booking by its source, divide the value of the source by the number of bookings it has. Based on my example table above, I’d get these results:

I recommend using formulas so that any changes in your data will automatically update these averages. Enter “=ColumnLetterRowNumber1/ColumnLetterRowNumber2”, where the numerator is the cell containing the total value of your bookings and the denominator is the cell containing the total number of bookings. You can apply the same principles to the formulas for Back office, Checkout, and Rescue booking value averages. For mobile, instead of dividing the total mobile booking value by the total number of bookings, I would use the number of Checkout bookings as my denominator, since a mobile booking by definition can only come through the online checkout.

Earlier I mentioned that we’d eventually rely on guest data. That time has come. You’ve been jotting down total guest counts for all your sources. To find the average booking size by source, divide the total number of guests per source by the number of bookings for that same source. E.g. Total number of guests / Total number of bookings; Number of back office guests / Number of back office bookings; etc.

Woohoo! At this point, you’ve mastered the basics of booking calculations. Now for our final steps in this advanced reporting lesson, we’ll see what we your export reveals about marketing and operational statistics. But for steps 3 and 4, we’re going to try something a little different…

Steps 3 & 4: Marketing and Operations

For these remaining categories, I’ve made a video screenshare walking you through the entire process! Right now, you’re a ninja at booking analytics. But the meat of this advanced reporting tutorial revolves around marketing and operational analytics.

• Your revenue from add-ons
• Which add-ons are most popular (both in terms of volume and value)
• Coupon use and its revenue impacts
• The difference between your customers’ booking and arrival dates

https://youtu.be/VV8f4Y9mBHw

Advanced reporting for enterprise tour companies

For Finance managers or Accountants that need more advanced reporting, check out this article written for enterprise businesses.

Until then, happy crunching!

Oh and don’t forget about your Free Excel Template fully loaded with all the formulas and tables in this article! Download it here .

Writer Xola Team

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Free Project Costing Templates

By Kate Eby | April 5, 2022

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We’ve compiled the most effective project costing templates for project managers (PMs), project cost controllers (PCCs), and cost analysts, as well as helpful tips on using project costing templates. 

Included on this page, you’ll find a simple project costing template , a construction project costing tracking spreadsheet , a software project costing template , an IT project costing template , and a sample project costing sheet template .

Simple Project Costing Template

Download Simple Project Costing Template Microsoft Excel | Google Sheets  

Use this simple project costing template to determine the total funds, including direct and indirect costs, required to complete your project. The template allows you to compare best case, most likely, and worst case scenarios, so you can refine your cost estimates for each task. The Weighted Average column averages the item costs of all three scenarios to give you the most accurate total cost estimates, and the Running Weighted Average field tallies your total weighted averages to give you a more accurate financial picture of your project’s true cost. 

To get the most out of your project cost estimations, see our comprehensive guide to project cost estimating .

Construction Project Cost Tracking Spreadsheet Template

Download Construction Project Cost Tracking Spreadsheet Template Microsoft Excel | Google Sheets  

Use this simple construction project cost tracking spreadsheet to accurately estimate line-by-line and total construction project costs. Enter category and items, projected and actual costs, responsible parties, status, and percentage of each task complete. The template also doubles as a budgeting template by keeping tabs on amounts currently paid and due, so you can see your projected and actual project total and track outstanding payments.

Software Project Costing Template

Download Software Project Costing Template  Microsoft Excel | Google Sheets  

Use this comprehensive software project costing template to calculate costs for your software projects. Use the Estimation Variables section to factor in all project management and project control efforts, and compare estimated and actual hours for each phase of your software project. For each software development phase or activity, enter the computed work hours, task duration in weeks, and average hourly resource cost, to arrive at a precise estimation of your project’s total costs.

IT Project Costing Template

Download IT Project Costing Template Microsoft Excel | Microsoft Word | Adobe PDF

Designed for IT departments, this project costing template helps IT project managers accurately estimate project costs. The template also helps you keep IT project costing within the authorized spending limit, define an action plan for cost variance, and establish the project’s cost baseline, including a work breakdown structure (WBS) for each project task or group of tasks. The Project Budget section allows you to list the final figures for contingency, as well as the fixed, material, contractor, and total project costs.

Sample Project Costing Sheet Template

Download Sample Project Costing Sheet Template Microsoft Excel | Google Sheets  

This sample project costing sheet template includes sample text to guide you through the  project cost estimation process. Enter details for each task, such as date entered, task description, and different cost estimate scenarios. Find the weighted project cost in the Running Weighted Average Total field, which calculates projected costs based on the three-point cost estimation technique (best case, most likely, and worst case scenarios). 

For solutions and resources to ensure that you optimize your project costing, read our guide to project cost management .

Parametric Project Cost Estimating Template

Download Parametric Project Cost Estimating Template — Microsoft Excel  

Track item-by-item and overall product and labor expenses with this parametric project cost estimating template. Use the template to anticipate all of your project’s expenditures, so you can calculate a comprehensive and accurate estimate of total project costs while staying within the parameters of your proposed or existing project. 

For more resources, check out our comprehensive collection of free estimate templates .

Project Costing Control Template

Download Project Costing Control Template  Microsoft Excel | Google Sheets

The most successful projects meet stakeholder expectations and stay within their defined budgets. PMs or PCCs can use this project costing control template to ensure that their plans account for all project costs and that projects stay within budget. Enter each project task and its budgeted and actual amounts, and then tally your project’s actual costs and compare them to your total project budget.

Project Cost Tracking Template

Download Project Cost Tracking Template  Microsoft Excel | Microsoft Word | Adobe PDF

Use this project cost tracking template to ensure that you accurately estimate the cost of your project, and that you capture all potential and actual costs. This customizable, print-friendly template helps you define your project’s purpose, reporting requirements, spending limit authorization levels, cost estimation processes, cost controls and metrics, and your total project budget.

Project Estimate Template

Download Project Estimate Template – Microsoft Excel

Gain a high-level perspective on the statuses, estimated hours, project phases, and task-by-task project costs for various project components with this project estimate template. The template tallies the estimated total cost, number of estimated associates, and number of estimated hours, so that you can identify whether you are over or under budget and therefore, might need to adjust project expenses.

What Is a Project Costing Template?

A project costing template is a structured form that project managers use to calculate the total funds required for a project. Use the template to estimate your project’s total projected expenditures and to ensure that you account for all direct and indirect costs.  

By using effective project cost management (PCM) to estimate your project costs, you ensure that PMs, PCCs, project sponsors, and clients all agree upon a project budget and foresee all potential project costs. 

A project costing template also assists with tracking projected versus actual project costs. Additionally, templates help with calculating the individual cost of tasks, labor, units, and work hours, checking your budget status, and anticipating risks before they become a budgeting liability. 

While project costing templates may vary, they usually include the following core components: 

• Project Name: Enter a unique name for the project. 
• Project Manager: List the name of the project manager responsible for PCM. 
• Category: Specify a category name for each project cost task or item.  
• Task or Item: List the name of each project task or item under its respective category.  
• Description: Provide a description for each project task. 
• Projected Subtotal: Enter the projected subtotal for each project task or item. 
• Actual Subtotal: Provide the actual subtotal cost for each project task or item. 
• Project Budget: Enter the total budget amount. 
• Projected Total: Review the projected total cost for all project cost items and tasks. 
• Actual Total: Review the actual total costs for all project cost items and tasks. 
• Variance: Review the variance between the projected and actual total costs to determine whether you are over or under budget.

Additionally, a more detailed project costing template might include the following sections to further define a project’s costing figures: 

• Spending Limit Authorization Levels: Enter the spending limit that has been authorized for each project item. 
• Cost Variance Action Plan: Detail the plan of action that should be taken if the project’s cost variance is unfavorable.
• Cost Estimate Process: Describe how you calculated your initial budget to meet the project’s requirements, including direct and indirect costs. 
• Cost Baseline: Provide the WBS for each project task or category of tasks, cost estimation method, and method of funding for the project. 
• Cost Control: Detail the metrics used to keep the project under its set cost thresholds.

Streamline Project Costing with Smartsheet for Project Management

From simple task management and project planning to complex resource and portfolio management, Smartsheet helps you improve collaboration and increase work velocity -- empowering you to get more done. 

The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

When teams have clarity into the work getting done, there’s no telling how much more they can accomplish in the same amount of time. Try Smartsheet for free, today.

Discover a better way to streamline workflows and eliminate silos for good.

Learn Tour Costing

• April 20, 2020
• Business Management , Financial Management , Training , Travel Info

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.

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Travel Budget Worksheet

Are you planning a major trip? Will you be able to stay within your budget? Rather than just spending without a plan and then dealing with the debt for the next few years, use our travel budget template to list your travel expenses. It will help you estimate your total travel costs and see if you will be able to take your trip without going over budget.

License : Private Use (not for distribution or resale)

Authors: Jon Wittwer and Jim Wittwer

Description

This travel budget template makes it easy to enter your travel expenses for your next trip. The top section allows you to set a total budget, and as you enter your travel costs you can quickly see where the money is going, how much extra you'll have, or how much you'll need to add to your budget.

The worksheet is set up to let you enter a quantity and unit cost for each item. For example, for lodging you can enter the number of nights you will be staying and the cost per night. If you will be driving rather than flying, you can enter the total miles and the cost per mile. Remember to include both fuel and wear as part of the cost (see the link below for what the IRS uses as the standard mileage rate - $0.56/mile in 2014).

Additional Resources

• Be sure to check out our Travel Itinerary and Packing List templates.
• IRS Publication showing Standard Mileage Rates at irs.gov - You might consider using the standard mileage rate if you are estimating the cost of driving.
• Tips for Creating a Budget for Travel at wikihow.com - This article is actually a really good resource to help you remember what to consider when budgeting for a trip.

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Excel Sheet for Tour Costing

₹600-1500 INR

Paid on delivery

**Tour Costing Sheet Structure**

1. **Tour Details**

- Tour Name

- Tour Code

- Destinations

2. **Client Information**

- Client Name

- Number of Adults/Children

- Contact Information

3. **Accommodation**

- Hotel Name

- Room Type

- Meal Plan

- Cost per Night

- Total Nights

- Total Cost

4. **Transportation**

- Vehicle Type

- Cost per Kilometer

5. **Sightseeing and Activities**

- Activity Name

- Per Person Cost

- Number of Persons

6. **Miscellaneous Expenses**

- Guide Fees

- Entrance Fees

- Other Expenses

7. **Pricing**

- Subtotal (Sum of all costs)

- Markup Percentage

- GST (Goods and Services Tax)

- Final Price

8. **Payment Details**

- Deposit Required

- Balance Due Date

- Cancellation Policy

Need for India Inbound Tour costing cost sheet, for India inbound in USD & Euro & Outbound in Usd n euro.

Excel Data Entry Data Processing Telemarketing Project Management

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A Sample Tour Budgeting Spreadsheet: Free Download

If you’re new to touring, one of the many big questions you might have is how to turn a profit?  Some tours are investment tours. On some tours, you’re lucky enough to break even, while other tours can earn you lots and lots of money. It all depends on how you plan it, where you go, how long you stay, and what kind of shows you can book.  It also depends on how good you are with budgets.

What is a Tour Budget?

In the same way that a standard household budget keeps track of expenses, a tour budget keeps track of expenses while you are on tour. A tour budget is a log of expenses and earnings that are accrued while traveling from gig to gig. It is a tally of all expenditures such as gas, lodging, meals, parking fees, etc per day. It also tracks revenues and earnings per show or per day. The tour budget can be on paper or in electronic format.

Why Do Musicians Need a Tour Budgeting System?

A good tour budgeting system will help you make informed decisions that can improve your experience on the road. You’ll be able to decide whether you can afford a nice steak dinner after a great show or a hamburger from the dollar menu instead. You’ll also be able to plan out what kind of hotels you can stay in ahead of time depending on your estimated earnings. There will be times you’ll need to stay with friends instead of hotel lodging in order to stay within budget.

You need a tour budgeting system to…

• Stay within your budget
• Make informed financial decisions while on the road
• Plan a profitable tour
• Keep track of expenses
• Measure your success

What’s in this Sample Touring Budget for Musicians?

Use this sample budgeting spreadsheet to not only plan your tour finances, but you can also use it to keep a detailed record of your expenses while traveling. The elements in this budget such as snapshots of daily expenses and projected earnings will show you how or if you can turn a profit.  It will also inspire you to stay within budget while on the road. I use this budgeting sheet myself and it has really helped me to plan my tours and keep track of expenses while on tour.

Make your budget the very first thing you look at when planning a tour. This Sample Tour Budgeting Spreadsheet  can be used as a planning tool to ensure that every tour is a profitable one. It will help you make better booking, lodging, and routing decisions. I recommend using this spreadsheet for every tour before, during, and after.

With this spreadsheet you can:

• Make routing decisions
• Make booking decisions
• Look at expenses compared to projected earnings
• See a breakdown of expenses separated by category (meals, gas, lodging, misc.)
• Forecast whether or not a potential tour will be profitable

This sample tour budgeting spreadsheet also includes a sample 10-Day tour showing how you can turn a $1000 profit. In the 10-day budget sample, expenses and projected earnings are separated by show, by day. I included a realistic tour with show dates at real venues in real cities with real potential earnings to show that you can not only break even on your tours, but you can make a profit and go home with some real hard cash.

Use it! Customize it to suit your needs and start doing your best tours ever.  Be confident to take your show on the road. I’m rooting for you and I know a lot of other people are too.

Plan for profit on your next tour with the Tour Budgeting Spreadsheet.

Download the free Tour Budgeting Spreadsheet today.

Note: This Sample Tour Budget is a Google Spreadsheet. Copy it into your google drive, or download it onto your computer as an Excel spreadsheet and get to work.

Liked this article? Check out the Tour Series: How to Book a Tour 5 Benefits to Touring as an Independent Artist A Tour Planning Checklist The Fool-Proof Guide to Filling Empty Tour Dates How to Break Even or Turn a Profit on Your Tour

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