Are you looking to launch a guided tour, a cooking workshop, or any other tourism activity? Don't overlook the critical step of pricing. An activity priced just right will fly off the shelves, whereas one that is overpriced — however great it may be — simply won't sell. Here is our advice for setting the right price for your products and, in doing so, maximising your sales.
Establish the floor price for your offering
The most common mistake when trying to price a service or tourism activity is wanting to offer the lowest possible price — sometimes to the point of forgetting certain costs, such as transport or equipment. The very first thing you need to do is therefore define your floor price.The floor price is the minimum price that allows you to break even and avoid losing money. You must therefore draw up a clear list of every cost associated with your activity: travel expenses, required equipment, taxes… If you take clients to a paid venue as part of a guided tour, you will also need to include the cost of admission in your pricing.
Don't forget to factor in costs tied to your activity year-round, such as insurance and the time you spend on organisation and preparation. All of this has a cost, and it must be accounted for.
This step is obviously decisive for everything that follows! A correctly established floor price will be the foundation of your activity's long-term viability. Conversely, if you have set it too low and missed some costs, you will end up working at a loss — which is clearly not sustainable.
Don't forget taxes! If you are subject to VAT, you will need to define a floor price excluding tax and then add VAT to arrive at your public-facing price.
Factor in platform commissions
If you intend to sell your tours, activities, or workshops on platforms such as Get Your Guide or Viator, you absolutely must take commissions into account when setting your prices.A platform like Get Your Guide charges a commission of 30% on every sale. You therefore need to factor this in and absorb it fully or partially, depending on your strategy. In any case, do not make the mistake of listing on Get Your Guide or Viator at your floor price — the 30% commission will automatically put you in the red on every sale.
A useful tip: using the Explorates booking system will allow you to automatically account for reseller platform commissions in your prices. By setting the Get Your Guide commission to 30% via Explorates, all the activities and products you list on Get Your Guide will automatically be marked up by 30%. A simple, practical feature that guarantees you won't lose money!
You also have the flexibility to adjust the mark-up as you see fit. You can therefore reduce it during off-peak periods to offer a more competitive price on Get Your Guide, and increase it in high season if you only need Get Your Guide to maximise your fill rates.
Compare your offering with your competitors
Before you even list your activity for sale, check out your competitors and note everyone's prices. This will give you an excellent picture of the market. Take a 2-hour guided tour as an example: if all your competitors charge between €30 and €40, you have no chance of selling at €60 for an equivalent experience. Equally, there is no point undercutting the market with a tour at €15, which would likely be unprofitable for you anyway.Price also has a psychological dimension. If all your competitors offer the same guided tour at €45 and you come in at €9, customers will question the quality of your offering. The price must be credible.
You must therefore study the market and compare like for like — meaning the same duration, the same route or activity, and the same language. Look at what is included in each price and whether there are any mandatory extras. In the case of an art workshop, for instance, is the material included, or does everyone need to bring their own brushes and paints?
Analysing the competition is an essential step before setting your rate. Don't hesitate to repeat the exercise regularly, including mid-season, to check that you are still competitive in the market. The goal: stay competitive!
Bear in mind that customers also compare offerings before buying! Be prepared to give a clear, well-reasoned answer when a prospect asks you why your tour or workshop is €10 more expensive than a competitor's.
Define the right pricing structure
Have you established your floor price? Have you factored in activity platform commissions? Are you in line with the competition? You're not quite done yet! You now need to define your pricing structure based on audience and age groups.You will need to set a price for adults and a price for children. In the case of a guided tour, the standard practice observed worldwide is to offer a reduced price for children and even free entry for the very young, up to age 3 or even 5. In other cases — such as an airport transfer or a helicopter tour — adult and child prices are the same because a child occupies an adult seat.
You can also introduce a special rate for groups wishing to book your experience privately. In this case, the price takes the form of a flat fee that does not vary with the number of participants. However, you will obviously need to set a cap on your private rate by specifying the maximum number of people it covers.
A private rate is, in any case, an excellent way to tap into the corporate market, works councils, or the premium segment. You can also plan additional services for private clients — for example, charging for a hotel pick-up or adding the delivery of souvenir photos or a keepsake booklet.
Embrace dynamic pricing
Airlines were the first to embrace yield management and dynamic pricing. The principle: adjusting prices based on current fill rates and fill-rate forecasts. An airline will naturally charge more for Friday evening and Sunday evening flights, for example, while Saturday morning flights will be more affordable.Yield management and dynamic pricing have since spread widely across the tourism industry, from hotels to tickets for major visitor attractions. And you too can adopt this principle for your guided tours, creative workshops, or any other tourism offering.
This requires a booking system that allows you to schedule your rates across the upcoming season. Explorates does exactly this, enabling you to define an unlimited number of price tiers. Your Saturday guided tour or workshop can therefore be priced higher than your Tuesday morning session, when everyone is at work.
Using dynamic pricing will help you optimise both your margins and your fill rates. Conversely, you can of course decide to roll out a special rate for a particular date that isn't filling up as expected.
Whatever happens, be pragmatic about your pricing. If a price isn't working, don't persist — go back to the drawing board and try something different. Equally, if sales are coming in far too easily, your price may be too low… Pricing really is everything!
