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Priced Right: Pricing Strategies for Tour and Activity Operators

In a highly competitive industry, like the tourism and activity business, it’s very important to get pricing just right. However, this can be challenging because no two tour operators offer the same kind of services. Location, amenities, operating costs and other features can vary from operator to operator, and that makes it difficult to set a standard price.

Obviously, if you are offering a unique or niche service that is very rare to find, you will have a different pricing strategy, from someone who offers a much more mass-market- targeted tour. Your uniqueness will decide the pricing here. Your pricing will rise if you include other value-added services in your package.

Additionally, there are internal factors, including the cost of running the tour and activity for you, your fixed and variable operating costs, revenue estimates, and so on. These have to be taken into consideration before you even think of competing with other activity operators based on their pricing.


Here are some tips on getting pricing right.

You will obviously have a rack rate which is your full rate that will be charged. However, as the tour operator, you will also have seasonal pricing which will include lower pricing for low-demand times of the year. This is one of the most basic strategies that operators use. However, you can become a little more innovative when you are determining your seasonal pricing, and go beyond just the high and low- season pricing strategy that most operators use.

Have more than two seasons, depending on the kind of demand that you see for your tours. If you have many families participating, you may want to have a different pricing strategy for school holidays, holiday weekends, and other times when families are more likely to want to participate in these activities.

Also look at seasonal pricing for specific local events in your neighborhood. Bookings around popular community events that see mass participation could also have different pricing, compared to other times of the year.

If you see lot of participation during Christmastime, hike prices during those times as well. Remember, people expect that prices for tours and activities will be higher during these peak times.

Also use e-mail marketing, and SMS marketing tools effectively in order to deliver last- minute discounts. Remember, cheap prices are always a big draw, nut you must make sure that your customers know about these low prices, and that they do result in increased traffic and increased booking numbers. There isn't nothing worse than offering a half price rate, failing to publicize it and then having a few regular customers – who were not aware of your last-minute discount and who would have walked in any way – walk in and pay half price.

You can also have days of the week that see more demand than others. For instance, tour operators do tend to hike prices on weekends, because demand is higher during that period of time. Remember, many people want to take advantage of lower prices, and will jump at the chance to participate in an activity at a lower-priced time even if it is during a week day.

Changes in pricing could also happen throughout the day. If you are renting out scuba diving gear, for instance, and you find that much of your demand is between the hours of 10 and 1, you might want to have higher pricing during this period of time. Your scuba diving rental equipment could be rented out at lower pricing, during these early hours.

You also have to consider whether you want to have group pricing or individual pricing. For example, you may have a separate adult price, child price and, maybe even a senior citizen price for older customers. Group pricing is ideal when you are renting out accommodation, or other similar activities. For instance, when you are renting out a vacation room, you might advertise for two people, or two people +2 kids, and so on.

Want to know more about how you can increase customers and boost revenues in your tour and activity business?

Get in touch with a marketing professional at VS Media Group.

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