Handout 4 Flashcards
is the process of determining the actual cost of a tour package by detailing its various components (accommodation, transportation, tours, meal plans, tour guide, and tour coordinator services)
Costing
on the other hand, is the process of determining the selling price after a mark-up (the value that tour
operators add to the price of their products or margins measure of profitability to the costs
Pricing
Before costing tour packages, tour operators identify first if air transportation must be involved.
Costing Ad Hoc and Regular Tour Packages
(domestic airfare combined with the international airfare to be quoted altogether)
inclusive tour package
(domestic airfare and international airfare are quoted separately)
land arrangements
(remain constant regardless of the number of participants)
fixed costs
(determined by the number of participants availing of a travel component.)
variable costs
are calculated based on the inclusive number of meals (hotel and restaurant) and packed meals, and entrance fees and non-and transfers transportation costs and transfers/transportation and lodging costs are excluded in FOC cost.)
Free-of-charge (FOC) costs
would only be applicable in calculating for tour guide services if a tour guide would have to stay overnight with the clients.
Rest Over Night (RON)
Transportation costs by scheduled air, sea, or land transportation are based on per pax fare. Therefore,
these remain constant regardless of the number ot pax.
Costing for Transportation Components
(within its break-even load factor of 50-60% of the total number of seats for passengers)
prorated cost
Transfers cost may be prorated, except, for a regular airport shuttle service, which would be fixed and is on a per pax basis.
Costing Transfer Services
mini packages that include transportation, tour guide services, entrance fees, entertainment activities, and sometimes snacks and meals.
Costing Sightseeing Tours
When hotel accommodations are included in the tour package, the rule is that two (2) pax must share a room (twin-sharing.)
Costing for Accommodations
The cost of a tour escort's transportation, accommodation, and meals are prorated among the paying participants. As a rule, the suppliers' concessions are always applied to the tour escort, or the first FOC entitlement is given to him/her. These costs do not include the salary paid by his/her employer.
Costing Tour Escort Services
is a list of products and services of a tour operator with corresponding prices. It is usually posted on the websites of tour operators that can be viewed by potential clients or tourists.
Rate sheet
transport clients from point "A" to point "B" within the destination and with no sightseeing or entertainment en route.
Transfer services
are day tour packages (with no overnight stays) that entail transportation to the attractions and the sites of interest in the locality, the services of a tour guide to provide pertinent commentaries, and walking visits or tours and/or entertainment.
Sightseeing tours
as they directly book with hotels
free and independent travelers (FIT)
would be treated as ad hoc tour arrangements
group inclusive tours (GIT)
When costing a rate sheet, the golden rule is to "negotiate for the best available contracted rate" from the suppliers. In other words, the most competitive rate without compromising the quality of the supplier's products and services.
Rate Sheet Costing
