Most people who walk into a wine store unsure of what to buy will know how much they want to pay. They will most likely select a bottle within that price range even if a cheaper brand would delight their taste buds just as much.
Price is tied up with people’s identity, whether consciously or not. This makes pricing loyalty program group travel tours more complex than just packaging the cheapest tour offering. Instead, when considering the tour’s tab, you should continually examine and reexamine several factors that determine that final price.
Price is one of the Seven P’s of Marketing. Travel planners know that a good price can help a trip sell out and a bad one can ensure that nobody signs up.
In the past two issues, we examined the marketing techniques of product and place. Both techniques rely on research gathered by the travel planner to determine what type of tour their customers want. With this information in hand, you can also price your tours in such a way that your potential travelers will be happy to pay for them.
Crunching the Numbers
Instead of starting with a dollar amount and then choosing a tour, the first step toward cost estimation involves determining the type of tour that reflects the interests of your potential travelers and that represents your organization’s perceived values. For example, alumni organizations often choose tours based on both educational potential and demand from members.
Knowing your ideal travel product will help you know what tour extras to include and what to leave out. For example, accommodations often determine the largest portion of the bill. If you already know your travelers value hotels close to downtown, the price will rise. If they value a good deal, you can take the cost down by choosing a hotel outside of town.
Dining also greatly affects prices. Budget tours don’t include as many meals and offer mainly buffets. Upscale tours opt for included meals at high-end restaurants. Many tours lie somewhere in between with a focus on local restaurants but a more casual atmosphere.
Other factors that can affect the cost include length of tour, timing, attractions and exclusive experiences. Again, look to the group’s preferences for guidance on each of these items. If a bank planner knows their members value free time, that planner can include more free time in the tour to placate independent travelers as well as drive the costs down.
Creative Costs
You can zero in on the ideal pricing for your trips by weighing the preferences of your group members with the expenses involved in delivering those experiences. Whether you build the tour from scratch or simply select an itinerary from an operator, this information is useful for knowing what types of tours and amounts to look for.
Even when partnering with a tour operator, many travel planners customize the tour further. For example, many alumni planners will create events for other alumni living in the area. Chamber of commerce planners will build behind-the-scenes or experiential activities to add more exclusivity to the tour. This customization costs extra but can provide the extra value that your members crave.
If you believe that a tour operator’s trip seems perfect except for the price, don’t give up. Many companies can work with you to bring down their price through various changes, such as time of year, more free time or less expensive hotels. Don’t assume the itinerary presented is set in stone.
Most group travel planners fall somewhere between the cheapest option and the most expensive. If your travelers express a high concern about expenses, then try various cost-cutting methods to see which ones work the best for your members.
What’s the Damage?
Even cookie-cutters tour will vary greatly in price depending on the location. A trip to New Zealand will almost certainly come with a greater sticker shock than a trip to Ireland because of the unavoidable transportation costs.
Groups leaders handle this in a variety of different ways. Some only travel to places that fall under a certain price point. Others will sell a set amount of bargain travel options mixed with more costly exotic trips. This way they reach members with a range of travel budgets. These decisions often reflect the results from member surveys revealing the destinations they most want to see. Travelers that refuse to pay for a trip to Great Britain might shell out a fortune to walk on the Great Wall of China if that experience ranks high on their bucket lists.
If you’re smart, you’ll never be finished calculating prices. Tour prices need to be constantly reevaluated. Compare the tour costs at organizations with similar tours to see if your rate is still competitive.
Even if you have the ideal tour with a well-calculated price, you might still have trouble finding members willing to commit. Price promotions and discounts can create a sense of urgency for travelers on the fence to go ahead and sign up.
Test out early-bird deals, bring-a-friend discounts or special rates for repeat customers. These sales encourage travel planners to grab their credit cards so they don’t miss out on your next exciting tour.
