The Pricing Calculation Tool determines optimal pricing for your tourism experiences. By inputting costs, capacity, and desired profit, operators can confidently set prices that cover expenses and ensure profitability, leading to informed business decisions.
Accessing this feature
Go to Tools > Pricing Calculator
How to use it
Product or Service Details
When you first open the calculator, you see a field called "Product/Service Name." Give your offering a clear name, like "Morning Wildlife Cruise" or "Two-Day Outback Adventure." This helps you keep track of your calculations.
Add a note in the "Description (Optional)" field about what this particular pricing calculation is for – maybe it's for a new package, or a revised price for an existing one.
Inputting Costs
In the "Base Cost Per Person/Item" field, think about all the direct costs for each individual guest or each item you sell. This includes things like the cost of a meal, entrance fees to an attraction, a portion of fuel for a per-person tour, or supplies for a craft workshop. Enter that amount here.
In the "Other Fixed Costs Per Booking/Service" field, consider the costs that don't change no matter how many people book (within reason, of course!). This might be things like a flat booking platform fee, marketing costs for a specific campaign, insurance for a particular event, or a guide's daily rate if it's fixed regardless of group size. Enter that total here.
The "Operating Overheads (Monthly/Annual)" field helps you include your general business costs that aren't tied to a specific booking, but still need to be covered. Think rent, utilities, general admin wages, or website maintenance. You can enter your total monthly or annual overheads here, and the calculator will help distribute a portion to each booking.
Setting Profit Margin
In the "Desired Profit Margin (%)" field, enter a percentage to indicate how much profit you want to make on top of covering your costs. For example, if you want to make 25% profit on top of your costs, you'd type in `25`. This helps ensure your business isn't just surviving, but thriving!
Considering Group Size and Tax
In the "Minimum Group Size" field, enter the smallest number of people you'd typically run this tour or service for. Even if it's just one person, enter `1`.
In the "Maximum Group Size" field, enter the largest group you can comfortably accommodate. This helps the calculator understand your capacity.
In the "Tax Rate (%)" field, if you need to add Goods and Services Tax (GST) or another sales tax, enter the percentage here (e.g., `10` for 10% GST). The calculator will include this in your final price.
Adding Discounts
You'll see options to add a discount for larger groups. For example, you might say, "For groups of 10 or more, offer a 5% discount." This is a great way to encourage more bookings!
Calculating and Reviewing Pricing
Once you've filled in all the details, click the Calculate Price button.
The calculator will then display your recommended pricing, including:
Recommended Price Per Person: This is your suggested selling price.
Total Revenue: What you'd earn.
Total Costs: All your expenses combined.
Total Profit: Your earnings after all costs are covered.
It might even show you different pricing scenarios for various group sizes.
The calculator allows you to experiment with different scenarios until you find the perfect pricing strategy for your business.
Tips
Know Your Costs Inside Out: Before you start, list all your costs, including minor costs. This includes direct costs (like materials or specific permits) and indirect costs (like a portion of your marketing budget or website hosting). The more accurate your input, the more accurate your output.
Experiment: Try entering different profit margins, adjusting group sizes, or seeing what happens if you find a way to reduce a cost.
Consider Your Market: While the calculator gives you a great baseline, always keep your target guest and competitors in mind. What are similar experiences priced at? What value do your guests perceive in your offering?
Review Periodically: Your costs can change, and so can the market! Make it a habit to revisit your pricing calculations periodically – perhaps every six months or annually – to ensure they're still relevant and profitable.
Think About Value, Not Just Cost: While the calculator focuses on numbers, remember that your guests are buying an experience. Ensure your price reflects the value, quality, and unique aspects of your offering. Sometimes, a slightly higher price can even convey higher quality!
Need help?
For further assistance, contact us at [email protected]