Tourism pricing

• "Pricing is one of the most important

elements in the tourism marketing mix.
Tourism customers rate the product at a price
and without a price there is no indication of
value. The "right" price must satisfy both the
tourists and meet the profit objectives of the
tourism business.
 What to consider ?
• How unique is your business ?
• What value added service do you provide?
• What market do you want to attract?
• What position in the market do you want to
establish?
• What are your operating costs?
• What do competitors charge for similar
products and service?
 Types of pricing strategy
• Mark up pricing strategy
• Mark down pricing strategy
• Packages
• Rack rate
• Seasonal pricing
• Last minute pricing
• Discounting
 Mark up pricing strategy
• Set the prices of your holidays, tours and activities to
ensure that you make a profit on each sale.
• Identify all of the costs associated with running your
business which includes the time spent developing and
promoting a holiday or experience.
• The fixed costs include rent, building maintenance, any
machinery and insurances.
• Variable costs include wages, energy, repairs, petrol,
uniforms, bank fees, promotional and travel costs.
 Mark down pricing strategy
• A mark down pricing strategy requires tour
operators to mark down their prices in order to
remain competitive.
• It’s ideal during slower months.
• If the cost for your offering is normally £400 per
person, then you might mark down your prices to
£299 per person to allow you to (hopefully) earn
some profit on each booking, while remaining
competitive and keeping the business afloat.
 Packages
• Tourists are increasingly turning to “packages” to
meet all of their holiday needs - hotel, airfare,
transfers, tours and activities all for one inclusive
price
• Developing packages with complementary
tourism partners is a good way to stimulate
demand and add value without having to
discount.
1. visible pricing
2. Hidden pricing
 Rack rate
• All tourism businesses should have a rack rate,
an official rate before any discounts are
applied.
• These are the “brochure” prices printed in
advance of the coming season
• The rack rate for activity and attraction
operators is more likely to remain the same
during a peak holiday season without any day
to day discounting.
 Seasonal pricing
• This is different price levels throughout the
year to cover low and high seasons.
• These are usually the same date periods each
year and apply for school holidays, public
holidays or for local events where the dates
vary each year.
 Last minute pricing
• A common pricing strategy for
accommodation suppliers and tour operators
to fill any last-minute gaps.
 Discounting
• Discounts are often applied in the offseason
• Consider adding conditions to a discounted
price like a minimum stay or number of
travelers in the booking.
• Costs
• Customers
• Positioning
• Competitors
• Profit
• Market demand
• Who is your client
 1. Costs :
Before You set your pricing, work out the
costs involved in your business.
it includes the fixed, variable and semi-
variable costs.

2. Customers:
know what your customers want from
your services.
are they driven by the cheapest price or
by the value they receive?
3. Positioning :
once you understand your customer, you need to look at
your positioning.
where do you want to be in the market place?
do you want to be the most expensive, luxurious, high
end brand in your industry, the cheapest, beat it by 10 %
brand or some where in the middle.
4. Competitors :
what are they charging for different services?
what level of services are they offered for those prices?
how the customers are attract with their prices?

5. Profit:
some what related to your costs, you should always consider
how much money you are trying to make above breaking even.
6. Market Demand :
if what you do is in high demand, then you should be
aiming to make your services more expensive.

7. Who is your client?

your price will often vary for different clients.
this happens for a few reasons.
some clients require more effort, some are riskier,
some are repeat clients, you should vary your price to account
for these sort of factors.
 Tourism marketing is the business discipline
of attracting visitors to a specific location. Hotels,
cites, states, consumer attractions, convention
centers and other sites and locations associated
with consumer.
Features of tourism marketing
TOURISM IS AN INTANGIBLE PRODUCT:
Tourism is related to service, facility, pleasure,
leisure, etc. Which is not possible to visualize.

OWNERSHIP OF TOURIST PRODUCT IS NON-

TRANSFERABLE:
In tourism product and selling of a product does
not mean buying things like other properties. It is
buying or selling the service. In the process of buying
and selling of the tourism product.
PRODUCTION AND CONSUMPTION ARE CLOSELY
INTERRELATED:
Production of the tourism product is not to create a new
item. It is related with idea. Tourism product is the amalgamation
of attraction, facilities and accessibility. The travel agents who sell
the product neither produce them nor own them. The travel agent
cannot store them

TOURISM PRODUCT DOES NOT MOVE:

The tourist product cannot be provided by a single
enterprise. Each of the components of a tourism
product is highly specialized and all these combined
together makes the final product.
TOURISM PRODUCT DOES NOT MOVE:
The tourism product cannot be transported. It dose
not move to the customer but customer needs to move to
the product. As attraction, hotels does not move,
transport moves but it moves to its destination only. The
customer must get it to enjoy it.

THE DEMAND OF TOURISM PRODUCT IS VERY

UNSTABLE:
The demand of tourist product is influenced by
different factors such as season, economy, politics,
religion and other special events etc. The seasonal
change greatly affects the demand. The tourism plant is
used for a limited time of the year.
WIDE COVERAGE:
Marketing of general product may be limited or producers
can limit their sales compaign and marketing to the local area but
in tourism , it must be done outside or in different locations where
tourism product is produced, because tourists are the outsiders.

A LUXURIOUS CONCEPT:
Tourism product being leisure, pleasure and
comfort is the most luxurious concept, so it must be
marketed, In the modern world of mass tourism it has
become more important to be marketed than before.
 MARKETING MIX

TOURISM AND HOSPITALITY

 INTRODUCTION

Tourism marketing is different because the

customer purchases a series of services. While
marketing a tourism product, the sales or
marketing person insists on the positive facets
of the following seven P’s marketing mix
Seven P’s in Marketing Tourism
 Product: What You Have to Offer

• The product is the collection of services that

have features and benefits. Standard features
and benefits include the normal amenities of
a hotel room, for example. Good marketing
adds special features, such as free breakfasts
or free Internet.
 Price: What Customers Will Pay

• The price has to match the product, but good

marketing makes the price seem more
attractive. The operator can either add
features to the product and keep the price the
same or give a discount for the same features.
 Place: Where You Do Business
Place refers to the location where the customer
buys the collection of services. Ideally, the
operator who sends out the promotion uses it to
encourage the potential customer to visit the
operator's location and complete the purchase.
With the convenience of online payments, the
operator may find that the best strategy is to
direct potential customers to an attractive
website where they can complete the purchase.
Promotion: How You Sell Your Wares
The promotion gives details of the product and the
price. The key characteristics of your travel marketing
strategy are the method of communicating the
information, the content of the promotion and the
cost to the operator. The promotion has a target
market, and the method and content of the
promotion has to appeal to the people who it
reaches. The price the members of the target market
are willing to pay has to cover the cost of promotion
 People: Your Hidden Strength
Since the product is a collection of services,
the people who provide the services are a key
to the success of the transaction. Operators
must have top-level service to initially
complete the sale and to encourage repeat
customers.
 Planning: Look Ahead
The key service component of the tourism
experience is planning. The customer expects
that the experience will correspond closely to
what he purchased. The only way to ensure
that kind of correspondence is to execute
according to detailed plans, and have
contingency planning in place for problems.
 Physical Evidence

If possible, the provision of physical evidence

that the customer experienced the particular
tourism product can help sales. Providing
professional photographs of the customers at
key events or the supply of branded products
are effective strategies for promoting
particular tourism products.
MARKETING STARTEGY FOR
TOURISM
 What is marketing for travel and
tourism-MEANING
• Marketing for travel and tourism operations
involves designing advertisement or
promotional offers that will best draw
customers towards a travel business.

• The success of tourism businesses depends

upon sales and promotion strategies.
 MARKETING STRATEGIES
• Increase sales
• Bring in new customers.
• Get existing customer to buy more.
• Introduce a new product or services.
• Increase market share.
• Better establish your brand.
• Improve customer loyalty.
 How to develop marketing strategy
• Understand the product – customer
relationship.
• Tourism products – attractions people expect
to experience away from home.
• Strategy development in relation to target
segment of market.
• Service – people dependent.
• Customer perception crucial.
 Promotion Ideas and Marketing
channels
Pay Per Click (PPC):
These are typically banner advertisement
that appear in the margins on a webpage.
Your goal is to use your most stunning
photographs and snappy, concise language to
convince the viewer to click and learn more
about your tourist destination.
 SOCIAL MEDIA MARKETING
Dozens of social media platform exists, and
different types of people enjoy using different
ones. Face book is always a great option. Your
town’s tourism promotion board can set up an
official town page, or if you own a tourist
destination. Instagram is ideal for younger
visitors.
 Print Advertising
You can place advertisement in magazines, on
billboards and in newspaper where it makes
senses to do so and when you have the
budget for it. Use images and words that make
someone long to come visit or at least visit
your websites and get totally hooked.
 Video Advertising
These days, commercials don’t even have to
appear on TV, even though that could be a
good way to reach certain people. You can
also place advertisement on You Tube or other
popular online video platform.
 Email Marketing
Collecting emails and sending out newsletters
can be great way to keep in touch with
previous visitors or to make plans, Sharing
upcoming events details and give a compelling
recap of previous events to make people wish
they had been there.
 Search Engine Marketing
People tend to think of blog posts when they
think of search engine optimization, but you
can also optimize images. It’s a smart idea to
make sure you website’s text and images are
optimizes for popular local keywords. Do
search to figure out for what people are
searching.
 Travel Motivator
PERSONAL
• Curiosity, desire to learn about an area, enhance
self esteem, stress relief (need to get away),
improve health, recreation
• Ex. Weekend Getaway
ENVIRONMENTAL
• Desire to experience different landscapes, check
out different types of wildlife, enjoy outdoor
experiences
• Ex. Safari
CULTURAL
• Desire to explore art, history, food, religion,
language, etc., may be something from your
own culture or from another culture
• Ex. Festival
SOCIAL
• Visit friends and family, travel with friend(s) to
a destination away from home (domestic or
international)
• Ex. March Break in Mexico with friends
ADVENTURE
• Desire for exhilaration, risk, challenge or
exploration
• Ex. White water rafting in Ottawa
BUSINESS/PROFESSIONAL
• Business conventions, workshops, exhibitions,
school trips
• Ex. School trip to Niagara Falls
• Friends
• Family
• Institute (College/School/Corporate)
• Enjoy – Vacation
• Situation
• Tour operator
• Winner of Coupons
• Natural environment
• Knowledge