2014 is in full swing, and it’s the perfect time to revisit your budget. Good budget management skills are absolutely critical to increasing any tour operator and activity provider’s revenue.
Not only will a budget tell you whether you can afford your fixed costs, but you’ll know if there’s room to invest in a new employee or piece of technology.
Here are 3 budgeting essentials for tour operators that will help maximise revenue:
You need a solid reference point before you can think about the results you want to achieve. To do that you need to know how many customers you need to cover your costs and make a profit.
First of all you need a budgeting report which lists your:
Taking a close look at it during regular intervals will make sure you’re prepared for your future operating goals.
Was the budget in line with your actual numbers? If your answer is no, then you need to document why you think your actual numbers varied from the budgeted figures:
If it’s a loss, what can you do to stop the problem from recurring? If it’s a gain, how you can capitalise on the opportunity?
If your budget is tight, there are some basic costs you can cut, like company travel and lunches out. However, you might learn that you need to restructure the pricing of your services. Which brings us to our next point.
As a tour operator, it’s important to know that each product you have is profitable. So you shouldn’t think of having just one fixed cost for your products. Instead, you should think about what pricing strategies you can use to maximise your revenue:
The final piece of the puzzle is managing the commission you’re willing to give to your agents. Make sure you include this in your pricing strategy so that you’re not losing money.
One of the major problems with agent management is not having an online booking system like Rezdy in place that manages your commission automatically.
To see it in action, take a free trial by clicking on the link below: