Rahul is appointed in a Travel agency. He looks after the costing of d

1.	Rahul is appointed in a Travel agency. He looks after the costing of different types of GIT and FIT tours. He does lot of research on different Cost components of package tour. List out the various Cost components in Cost Structure which Rahul should include.
Answer» The sum total of cost components of a package tour is known as the cost of package sold. However, the process of ascertaining a package cost becomes complicated, if it not done with a established budget. The projected cost helps the tour planners to determine and adopt effective pricing strategies. Thus, the cost components of a package tour include: Research and Product Development: The expenditure on market research is used to conduct study on the travel behavior and motivations of customers. It incurs cost to prepare a survey report Travelling and Transfer: International and domestic air fares, rail travel, transfer and departure tariffs are also included in the cost component of package tour. Accommodation: The cost of booking rooms constitutes one third of total cost of package tour. Tour operators get best possible room rate after negotiations. Sightseeing & Activity: Tour operators arrange several valueadded activities in sightseeing and excursion tour. Administrative and Technical Cost: This cost is incurred towards the payment of salary, allowance, incentives, etc. It is also added to the total tour costing. Training and Development: The cost of training staff is indirectly included in total cost. Tour operators hire the trainers for in-house training or send the staff and senior manager to professional institutes. Marketing and Sales Promotion: Marketing cost includes advertising and sales promotion. Printing and Publicity: The cost of printing tour brochures is included in total tour costing. The cost of foreign promotional tour is included in total cost of package tour. Payment of Interest: Tour operators incur the cost of payment of interest to the banks on the investment of capital to run the business. Depreciation of Assets: Tour operators incur depreciation cost in the long run due to the obsolete nature of software and hardware, and electronic gadgets. Miscellaneous Cost: This cost includes porterage charges at airports and railway stations, tips at hotels or airports, entrance fees, insurance premiums, gifts and welcome dinners.

Rahul is appointed in a Travel agency. He looks after the costing of different types of GIT and FIT tours. He does lot of research on different Cost components of package tour. List out the various Cost components in Cost Structure which Rahul should include.

Answer»

The sum total of cost components of a package tour is known as the cost of package sold. However, the process of ascertaining a package cost becomes complicated, if it not done with a established budget. The projected cost helps the tour planners to determine and adopt effective pricing strategies. Thus, the cost components of a package tour include:

Research and Product Development: The expenditure on market research is used to conduct study on the travel behavior and motivations of customers. It incurs cost to prepare a survey report

Travelling and Transfer: International and domestic air fares, rail travel, transfer and departure tariffs are also included in the cost component of package tour.

Accommodation: The cost of booking rooms constitutes one third of total cost of package tour. Tour operators get best possible room rate after negotiations.

Sightseeing & Activity: Tour operators arrange several valueadded activities in sightseeing and excursion tour.

Administrative and Technical Cost: This cost is incurred towards the payment of salary, allowance, incentives, etc. It is also added to the total tour costing.

Training and Development: The cost of training staff is indirectly included in total cost. Tour operators hire the trainers for in-house training or send the staff and senior manager to professional institutes.

Marketing and Sales Promotion: Marketing cost includes advertising and sales promotion.

Printing and Publicity: The cost of printing tour brochures is included in total tour costing. The cost of foreign promotional tour is included in total cost of package tour.

Payment of Interest: Tour operators incur the cost of payment of interest to the banks on the investment of capital to run the business.

Depreciation of Assets: Tour operators incur depreciation cost in the long run due to the obsolete nature of software and hardware, and electronic gadgets.

Miscellaneous Cost: This cost includes porterage charges at airports and railway stations, tips at hotels or airports, entrance fees, insurance premiums, gifts and welcome dinners.

Rahul is appointed in a Travel agency. He looks after the costing of different types of GIT and FIT tours. He does lot of research on different Cost components of package tour. List out the various Cost components in Cost Structure which Rahul should include.

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