Support
Sign in
Most of the destination management companies work in many simultaneous markets and work with margins that sometimes can be unstable or only right to get the business.
Do tour operators then make enough to sustain a profit on each file?
With ETOS DMC24, we bridge the gap between understanding your partner and setting up a correct mark-up for them. It ensures correct margins and a better and longer relationship with your agent partner.
What questions should tour operators ask themselves before setting up the pricing or mark-up for a target market?
- What market does your company want to go to and how to position in that market to establish itself?
- What research do I need to carry out in relation to the correctness of the product, price sensitivity, and risk of credits in that market?
- How to do a detailed competitor study, try to be in the product range similar to them but also innovate?
- How big or small are your operating costs, what is your break-even working and how to derive it to minimum pricing that can still sustain profits?
With our tour operator software, you can identify all your fixed and variable costs also. Identify all the costs associated with running your business, including the time spent developing and promoting a holiday or experience.
What market do you want to attract and what position in that market do you want to establish?
Research your target market concerning the product needs, price sensitivity, length of stay, etc.
What are your operating costs?
Calculate your break-even point and your minimum pricing for for-profit goals (estimates of revenue, occupancy rates, etc will be needed).
What do competitors with similar products and services charge within your market?
Competitors’ prices influence the maximum rate at which your product can be sold, but you must be aware of your financial position (debt levels, cash flow, etc) before you decide whether you should compete on price.
Set the prices of your holidays, tours and activities to ensure that you make a profit on each sale. Identify all costs associated with running your business, that includes the time spent developing and promoting a holiday or experience.
