If you’re a tour operator selling a specific type of activity in a region dependent upon the tourism industry, you know that your prices are important.

For example, if you are offering day trips to visit wineries in the local area, you are probably competing with at least three or four other tour companies that offer the same type of product. While you can enhance the experience with a free gift and provide state-of-the-art transportation for your customers, you still need to be able to offer a competitive price that allows you to enjoy a comfortable profit.

What is a Mark Up Pricing Strategy?

A mark up pricing strategy involves setting the prices of your tours and activities in order to ensure that you make a profit on each sale. In order to determine the price of a tour when creating a mark up strategy, you have to identify all of the costs associated with running a tour. This includes the time spent developing the tour, the resources used to offer each tour, and the overall cost of running the business. If it costs about $500 to run each tour and you can accommodate 5 passengers per tour, then the cost for each tour is $100 per person. In order to earn a profit, you might mark up your prices to $200 per person for a day of wine tasting throughout the region.

What is a Mark Down Pricing Strategy?

A mark down pricing strategy requires tour and activity providers to mark down their prices in order to remain competitive the market and to entice customers to book because of the desirable prices. A mark down pricing strategy is ideal during the slow months, when you may not be filling every wine tour that you run. If the regular cost for your tour is $200 per person, then you might mark down your prices to $150 per person. This still allows you to earn a comfortable profit on each booking, while still remaining competitive against the other wine tour companies in your local area. In addition, a mark down strategy may allow you to generate more bookings than you would have without the promotion, so you could earn more income in the end.

Mark up vs. mark down pricing strategy

That sounds like a lot of administrative work..

When it comes to developing a pricing strategy for your tour and activity business, you will want to make sure that you don’t get bogged down with administrative tasks. This is why it is important to implement an online booking system.

Rezdy is an online booking system that is designed for tour and activity providers, and it allows you to set specific prices for all of your distributors through the channel manager. Whether you adopt a mark up strategy or you are running a mark down promotion, you can input all your prices into Rezdy and let the software take care of the rest for you.

Let us know how you have set your prices. We are very interested in how tour operators deal with seasonality and competitive pricing.

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Linda Tran, Digital Marketing and Content Coordinator, Rezdy Online Booking Software
About Linda Tran

Linda is part of Rezdy's Marketing Team and is passionate about producing content of all formats that help empower the tour and activity industry.

6 Comments

  • George Pistikoudis says:

    Hi Niek,

    i live in Greece and i am preparing to run a business as a Tour/Activity operator. I will be organizing Astronomy camps for amateur astronomers from Europe. I wanted to ask you if you already have such a customer/implementation.

    By the way, i think you have a great product.

    Regards,

    George

    • Hi George, it seems like you will be going to sell tickets for certain days the camp is being held, Rezdy has the tools for you to do this. Have you started a trial yet? You’ll be able to see the possibilities for your business idea.

      • George Pistikoudis says:

        Hi Niek,

        my idea is not to just sell tickets but a complete package of:

        1) pickup the participants from airport and transporting them to Hotel/Observing site.
        2) Hotel room and accommodation,
        3) The tools, each Astronomer needs to observe (place, power, chair, table and scope),

        I haven’t started a trial yet cause i am still working on my product pricing (partnership with hotel managers, ….). It seems i ll be ready on January.

        Regards,

        George

        • Hi George,

          Once you start your trial, we will get in touch with you to discuss all the details for your specific product, and help you setting it up correctly. But from what you tell me, I assume you are providing multiple day tours which you can manage and distribute with our booking software.

  • Jennifer Okudzeto says:

    I’m in Ghana , and about to start my tour business how can I be part of your software system what are the requirements as a starter. Thanks.

    • Hi Jennifer,

      You can start a 7 day free trial to have a look at the software, find out whether Rezdy is a good fit for your business. If you like the software we have a starter plan at $49 p/m. It includes all the basic features you need to run your business.

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Mark up vs. mark down pricing strategy

,

If you’re a tour operator selling a specific type of activity in a region dependent upon the tourism industry, you know that your prices are important.

For example, if you are offering day trips to visit wineries in the local area, you are probably competing with at least three or four other tour companies that offer the same type of product. While you can enhance the experience with a free gift and provide state-of-the-art transportation for your customers, you still need to be able to offer a competitive price that allows you to enjoy a comfortable profit.

What is a Mark Up Pricing Strategy?

A mark up pricing strategy involves setting the prices of your tours and activities in order to ensure that you make a profit on each sale. In order to determine the price of a tour when creating a mark up strategy, you have to identify all of the costs associated with running a tour. This includes the time spent developing the tour, the resources used to offer each tour, and the overall cost of running the business. If it costs about $500 to run each tour and you can accommodate 5 passengers per tour, then the cost for each tour is $100 per person. In order to earn a profit, you might mark up your prices to $200 per person for a day of wine tasting throughout the region.

What is a Mark Down Pricing Strategy?

A mark down pricing strategy requires tour and activity providers to mark down their prices in order to remain competitive the market and to entice customers to book because of the desirable prices. A mark down pricing strategy is ideal during the slow months, when you may not be filling every wine tour that you run. If the regular cost for your tour is $200 per person, then you might mark down your prices to $150 per person. This still allows you to earn a comfortable profit on each booking, while still remaining competitive against the other wine tour companies in your local area. In addition, a mark down strategy may allow you to generate more bookings than you would have without the promotion, so you could earn more income in the end.

Mark up vs. mark down pricing strategy

That sounds like a lot of administrative work..

When it comes to developing a pricing strategy for your tour and activity business, you will want to make sure that you don’t get bogged down with administrative tasks. This is why it is important to implement an online booking system.

Rezdy is an online booking system that is designed for tour and activity providers, and it allows you to set specific prices for all of your distributors through the channel manager. Whether you adopt a mark up strategy or you are running a mark down promotion, you can input all your prices into Rezdy and let the software take care of the rest for you.

Let us know how you have set your prices. We are very interested in how tour operators deal with seasonality and competitive pricing.