Question 1

How often should I check and adjust my prices?

Accepted Answer

It depends on the tour and booking window. For popular tours with long booking windows, you might check weekly. As the tour date gets closer (e.g., within the last 1-2 weeks), you should monitor demand daily to make timely adjustments.

Question 2

Will dynamic pricing upset my customers?

Accepted Answer

Transparency is key. Customers are generally used to dynamic pricing for travel. Avoid drastic, frequent price swings. A common strategy is to have set 'pricing tiers' that are triggered by occupancy levels, which feels more structured than random changes.

Question 3

Should I ever price below my break-even cost?

Accepted Answer

Generally, no. However, there can be strategic exceptions. If a tour has high fixed costs (like a non-refundable bus rental), selling a few seats at a loss might be better than running the tour nearly empty, as each booking still contributes towards covering those fixed costs. Use this strategy sparingly.

Question 4

This calculator seems simple. What are the next steps for a more advanced strategy?

Accepted Answer

This is a great starting point. More advanced dynamic pricing models can incorporate other factors like competitor pricing, day of the week, seasonality, and historical booking patterns for the specific tour. These often require specialized software.

Question 5

How do I set the 'Base Price'?

Accepted Answer

Your base price should be your standard, profitable price under normal conditions. It should be calculated to cover all your fixed and variable costs and deliver a healthy profit margin at your target occupancy rate. Use a break-even analysis tool to help set this price.

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Understanding Dynamic Pricing

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