Understanding Tiered pricing in the Group tour market

Tiered pricing for group tours is an important element to understand when deciding on group rates. There are several types of group tour customers and the price per ticket should differ for each. Pricing is an important element of the tour company’s decision to include an attraction. Offering different rates for different types of customers is standard in the tourism industry. Group tours guests usually get a discount since there are multiple people coming at once. But not all group tour customers are the same. Tiered pricing means offering different rates to group tour customers.

Tour operators

These are people who are in the full-time business of selling group tour packages. They typically have websites, brochures, business cards and office staff. There is always a potential for repeat bookings. These are the clients that should receive the lowest rate possible. When they build a tour package price, they take all their costs (bus, hotel, attraction prices, etc.) and add a small percentage- usually less than 10%. In order for them to keep a package price competitive, they will ask you for a group rate.

Rates to offer

Group rate discounts vary from 10%- 50%. If you are starting out in this market, I would suggest a discount between 25-35%. It is also much easier working with tour operators. They know the date and time they want to come visit, and they have a better handle on the number of people they will be bringing. Keep in mind that a good tour operator can be responsible for bringing several hundred people through your door every year. They are worthy of your best discount!

Related posts

My Tourism Pro Talks with some of my favorite Tour operators serving the Domestic market:

Sandy Borowsky of Starr tours

Eric Gordon of Beyond Times Square

Julie Kozikowski of Destinations Unlimited

Group Leaders

These are people who are putting together a tour as a hobby, or as a way to travel. Group leaders don’t own buses, typically don’t have websites, and often use address labels attached to index cards as a business card. Group leaders often require more hand-holding, since this is a part-time activity for them. They are not sure of their number of guests until closer to the date of travel.

Rates to offer

Group tour leaders should receive a discount, but one that is much smaller than a tour operator discount. The extra time required of your staff to assist these groups should merit a 10-15% discount off your regular admission. Group leaders often represent social, educational, religious or fraternal groups. They also can call your attraction to check pricing, and then call a tour operator to compare pricing for the entire package. If they were to have the same discount as a professional tour operator, there would not be any room for the tour operator to make money when they quote the package.

Publishing rates on your website

It is common practice to not publish tiered pricing rates on your website or in a brochure. Tour operators need to be able to build a package with all the elements and they do not want their customers to have access to all their costs. When you speak with a tour operator, then you can tell them the pricing. If you are not sure if you are talking to a tour operator or a group leader, ask some questions that will help you decide who you are working with. One surefire question to ask is if they have a website. Group leaders rarely do; tour operators almost always have one.

Final thoughts

A group tour operator can be one of your best business allies. Make sure you take care of them by offering the best rates, returning calls promptly, and offering their guests a memorable experience. Want to learn more about succeeding in the group tour market? Order my ebook and I will be happy to answer any questions you have.