Package Tour Cost Components Quiz

Cost-Based Pricing, Competition-Based Pricing, Consumer-Based Pricing

The extra amount which the company can maintain on each sale

The rate at which a supplier quotes for products/services that it delivers

<p>Affordability and the quantity of purchase, along with the socio-economic backgrounds of customers</p> Signup and view all the answers

<p>Costing a package tour is important because it determines the scale of sale and margin of profit in both peak and lean seasons. It helps tour operators analyze and reduce costs, set competitive prices, and offer profit margins and discounts to customers.</p> Signup and view all the answers

<p>Cost in tour costing refers to the total expenditures incurred in acquiring the various components of services for the tailor-made or ready-made tour packages. It includes expenses for services from hotels, resorts, transporters, and other suppliers.</p> Signup and view all the answers

<p>In a cut-throat competitive market environment, reducing costs is necessary for tour operators to set competitive prices and increase the salability of tour packages. It allows them to maintain profit margins and offer discounts to customers.</p> Signup and view all the answers

<p>Fixed costs in a package tour include advertising, pamphlets, brochures, salary, interest on loan and advances, hiring buses and guides or interpreters.</p> Signup and view all the answers

<p>Overhead and marketing costs are included as part of both the variable and fixed costs in package tours.</p> Signup and view all the answers

<p>Tour operators usually add a 10-15% markup to an individual tour package.</p> Signup and view all the answers

<p>Direct costs include administrative costs such as salary, training, official tours, telephone and internet bills, rent, electricity, and employee amenities. Indirect costs include advertising, sales promotion, and publicity.</p> Signup and view all the answers

<p>Cost in the tour operation business refers to the monetary value of resources used for the acquisition of assets and production of outputs.</p> Signup and view all the answers

<p>Tour operators determine the cost of package tours by considering the tastes and preferences of customers and implementing business strategies to increase sales of tour packages.</p> Signup and view all the answers

<p>Break-even analysis in tour costing is the evaluation of alternative pricing levels where the total revenue generated from the sale of package tours is equal to the total cost incurred for acquiring the services.</p> Signup and view all the answers

<p>The two types of cost in the tour operation business are variable costs, which vary based on production variations, and fixed costs, which do not change in the short run but vary in the long run.</p> Signup and view all the answers

<p>The cost components of a package tour are determined based on factors such as research and product development, travel cost, accommodation, transfer, food and beverage, sightseeing and activity, marketing and sales promotion, administrative and investment costs, and miscellaneous costs.</p> Signup and view all the answers

<p>Cost is important in marketing and promotion for package tours because it directly affects the pricing of the tour packages. The cost of the tour components determines the final price offered to customers, and competitive pricing plays a crucial role in attracting customers and generating sales.</p> Signup and view all the answers

<p>Implicit costs in a package tour refer to the non-monetary costs, such as time and effort, associated with the tour components. Explicit costs, on the other hand, are the monetary costs incurred in booking accommodations, transportation, activities, and other tour services.</p> Signup and view all the answers

<p>The components of tour costs include research and product development, travel cost, accommodation, transfer, food and beverage, sightseeing and activity, marketing and sales promotion, administrative and investment costs, and miscellaneous costs. The percentage of cost shared by each component may vary depending on factors such as destination, duration, and customer preferences.</p> Signup and view all the answers

<p>The different types of pricing strategies used in the tour operation business are rack rate pricing, seasonal pricing, last minute pricing, per person pricing, and per unit pricing.</p> Signup and view all the answers

<p>The purpose of last minute pricing in the tour operation business is to offer discounts from the daily quoted prices in order to close bookings.</p> Signup and view all the answers

<p>Per unit pricing typically includes room, transfer, and sightseeing costs, and sometimes breakfast as per the European Plan (EP).</p> Signup and view all the answers