Question 1

What is a good ROI for a guided tour business?

Accepted Answer

A 'good' ROI can vary, but a common goal for many tour operators is an ROI of 50% or higher. An ROI of 100% means you've doubled your investment. Anything positive is good, but a higher ROI indicates greater profitability and a more sustainable business model.

Question 2

How can I improve a tour's low ROI?

Accepted Answer

To improve a low ROI, you can either increase revenue or decrease costs. Consider strategies like:Dynamic Pricing: Charge more during peak seasons or for private tours.Upselling: Offer add-ons like photo packages, merchandise, or premium equipment.Cost Control: Negotiate better rates with suppliers, optimize guide scheduling, and reduce marketing spend on low-performing channels.Increase Group Size: If possible, adding one or two more guests to a tour can dramatically increase revenue with minimal added cost.

Question 3

Should I include my own salary as a 'Guide Cost' if I lead the tour myself?

Accepted Answer

Yes, you absolutely should. Pay yourself a fair market rate for your time. If you don't, you are not getting an accurate picture of your business's true profitability. The business should be able to sustain itself, including paying for all labor, even your own.

Question 4

What's the difference between profit margin and ROI?

Accepted Answer

Profit Margin ((Revenue - Cost) / Revenue) shows the percentage of revenue that is profit. ROI ((Revenue - Cost) / Cost) shows how much you earned relative to what you invested. Margin is great for understanding the profitability of each sale, while ROI is better for evaluating how effectively your capital is being used to generate profit.

Question 5

How do I account for annual costs like insurance or software subscriptions in a single tour's ROI?

Accepted Answer

For annual or fixed overhead costs, you should allocate a small fraction to each tour. One common method is to divide the total annual cost by the number of tours you expect to run in a year, and then add that small amount to the 'Other Costs' field for each tour calculation. This provides a more accurate view of profitability.

Guided Tour ROI Calculator

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Understanding Tour ROI

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