Studies by online accommodation experts Rezdy have shown that around 40% of all international tour bookings are made online. It’s a no-brainer these days for tour operators to have a strong presence online, but how do you price your services in such a way that promotes maximum leads?
We take a look at some important considerations below that will help you decide on how best to price your tour packages depending on your own costs and situation.
Seasonal pricing is something that most operators will have already taken into consideration, but consider whether you can be more granular with how you divide your pricing costs. Simple having high and low seasons isn’t enough – consider your sales patterns over the last 3 or 4 years and consider how you could have a few more pricing options.
Day of week pricing
A proven way to substantially increase profits as a tour operator is to identify the stronger and weaker days of the week in terms of sales generated. Those who come on quieter days will be happy to take advantage of the cheaper pricing options rather than risk taking up space on busier days when they’re less likely to be able to be accommodated anyway.
Surcharge / Peak pricing
Even with a peak season set up, you should have specific days of the year where extraordinary demand (such as on Christmas) or when you are regularly subject to increased demands or operating costs. Customers are accustomed to paying more for services on public holidays, for example, so don’t sell yourself short by not charging them appropriately.
Last minute pricing
Having special deals for last minute spaces on tours is a great driver of incremental revenue, but the struggle is how to quickly distribute or advertise these deals to the last minute bargain price hunters. You should avoid simply having these last minute prices on your site, present to all visitors; that way visitors who were already on your site and potentially willing to pay the full price are given unnecessary discounts.
If you do opt for having last minute prices to fill up empty spaces, considering doing a targeted paid search campaign for people specifically interested in last minute deals.
Know your tour costs
One of the most important aspects to improving lead intake is knowing what it costs you to provide each of your tours.
For example, assume it costs you $600 to take your dive Jeep out for a particular day tour and an extra cost of $100 for 2 guides at $50/guide.
If your normal cost for this day tour is $100 and the Jeep takes 7 guests, how should you handle matters like “last minute pricing” or pricing for an unpopular early morning time?
The key to being able to implement and maintain smarter pricing and yield management is therefore twofold: Firstly, you need to have a clear understanding of all the platforms on which your prices are listed, and keep them up to date – our team of web marketing experts can help with that. You’ll also need to have the tools that enable you to quickly and flexibly update your product pricing and itineraries – our LSX Tour Operator plugin is perfect for the job.