Re-evaluating Your Costs for Profitability
Today we are highlighting our second post on the Adventure Travel Trade Association’s recommendations from their recently published article “3 Tips to Emerge Stronger” from the COVID crisis, reducing costs.
Costing and pricing visitor experiences is both a science and an art. A time of financial crisis is a good opportunity to revisit your costing and pricing to consider adjustments that may be needed in response to changing market dynamics such an increased focus on hyper-local and regional travellers.
The saying goes, ‘the farther away, the more willing to pay’. Couple this together with the financial hardships many people are experiencing as a result of COVID, and a hyper-local focus for restarting tourism, guests are likely to be more price-sensitive and seeking greater value from their travel choices. This increases the urgency for tourism operators to evaluate their costs and potential price adjustments in 2020. But do you know where you could reduce costs and the impact it might have on your visitor experience and profitability?
Tourism Cafe has spent years developing and refining a costing tool, designed specifically for tourism operators to cost and price their visitor experiences. This tool, available in English and French, has been tested with thousands of operators over 20 years and used in our training courses to help businesses understand their input costs for visitor experiences to inform pricing decisions.
The tool allows users to input different costing scenarios with various visitor volumes, deliveries and amortization periods. It incorporates cost categories for initial experience/program development costs, fixed and variable delivery costs, selling costs, overhead, exchange rates and commission rates so businesses can evaluate and compare their break-even delivery costs and set their pricing accordingly.
If you are looking to evaluate your costing and pricing in response to the changing market conditions due to COVID, this is a great tool, modestly priced and available on our website at https://www.tourismcafe.org/costing-templates. (Image credit: growthforce.com)