Pricing Strategies 

Tourism products are rarely identical, often because of location, but also because of the people and the components that make up the experience provide to a traveler. Even star ratings for accommodation only give a general guide for travellers on what the pricing will be – there are not set criteria. There are three types of traditional pricing strategies in tour operation business. 

Cost-Based Pricing: 

This type of pricing strategy is used to make over the cost in order to reach at the breakeven point. It calculates the average cost of each element of services in the package tour and it adds a markup over and above the average cost to earn profit. Thomos cook and the Oberio Hotel were used to be known for adopting the cost-based pricing strategy as there were no competitors to them. 

Competition-Based Pricing: 

This pricing strategy takes tab of the prices of its competitors in order to tag the price of its own product. There is a marginal difference in the price of outbound package tour of SOTC and Cox & Kings. 

Consumer-Based Pricing: 

This is a form of pricing that is primarily set to target customers by taking the affordability and the quantity of purchase into considerations. Gone are the days, it was producer dominated market; it is now consumer-driven and led market. All package tours are designed after assessing the market. 

Rack Rate Pricing: 

It is full rate before discounts are given. It is generally printed in the tour brochures for the forthcoming season. 

Seasonal Pricing: 

A wide mix of pricing of package tour is set to cater low, high and shoulder seasons as tourism is largely driven by the season. 

Last Minute Pricing: 

It is a common method of giving discounts from the daily quoted prices in order to close bookings. It is put into the flash items in the websites for the last minutes booking. In the group travel, tour operators offer some additional services or discount in the prices to get minimum booking to operate the tour. 

Per Person Pricing: 

This type of pricing is set per person or for each category service. It can be per adult or child or additional person. It can be a taxi at the disposal of customers. 

Per Unit Pricing: 

It is set of price for one unit of package. It may include husband and wife with children (cost free). Sometimes, the package includes room, transfer and sightseeing cost. The room rate generally includes breakfast as per the European Plan (EP).