Building a travel itinerary quotation manually is not just about putting numbers or words together. More than that, it is a crucial part of the travel business which decides your profit margin plus impacts conversion as well.
Whether you are a DMC, tour operator, or travel agent, the methods used to calculate a package cost can directly impact whether you experience unexpected losses or profit. Therefore, having a structured process for pricing a tour package is crucial for your travel business. A process that is easy to complete, quick and error-free.
Let’s start with how DMCs & Tour operators cost a tour package.
Step 1- Evaluation and Data Collection
The 1st step in costing a tour package is to evaluate the destination according to the requirements of the client. This stage saves you from a pricing mistake, a mismatched offering in a package and last-minute chaos. Here is how to do it:
1. Understand the Area
According to the experiences the client wants to pursue, budget and desires of the client, evaluate the destination. For example, if you are costing for Dubai, list key-city attractions, distance between airports plus excursion (to be included), like desert safari or Abu Dhabi tour.
With this stage, you will get information about vehicle types required for the group, transport suppliers to reach out to, transfer timings, and the best available options.
2. Study Seasonality
Every destination has a high & low season, which impacts almost everything in your package, pricing and demand, such as:
- Fluctuating Hotel prices (due to higher bookings in wedding / peak season >> limited inventories)
- Availability of activities (some desert or mountain tours are seasonal)
- Flight fares & supplier rates increase during the festive period or holidays.
Tip: Always check upcoming festivals, & local events before finalising your costing.
3. List Down Popular Experiences
Have all details of the available experiences that travellers seek with ticketing information and booking requirements. For example, in Dubai, some popular inclusions are:
- Desert Safari with BBQ dinner
- Burj Khalifa visit
- Dhow Cruise Marina
- City tour with Palm Jumeirah & Museum of the Future (highly booked in advance)
This information will help you in costing the package more quickly.
4. Define Traveller Budget Fit
As a travel business, we all know that every destination can be packaged in multiple price brackets, such as Luxury, Mid-range, or Budget-friendly.
Now, as for basics before you start costing, identify the bracket the traveller can fit in. Sometimes the budget of a traveller fits into both mid-range and budget, which will affect your overall package.
Examples of multiple price brackets:
| Traveler Segment | Hotel Category | Average Per Person Budget | Ideal Trip Duration |
| Luxury | 5-star | $900–$1200 | 4–5 Nights |
| Mid-Range | 3–4 star | $550–$800 | 4–5 Nights |
| Budget | 2–3 star | $350–$500 | 3–4 Nights |
Knowing this helps you pick the right suppliers, vehicle class, & activity combinations that match expectations. Plus, you are able to set the right profit margins for the pricing of the tour package.
5. Collect Current Rates from Contractors & Suppliers
Once you are done mapping out all of the above steps, it’s time to reach out to the appropriate ground handlers, hoteliers, and transport contractors to get the latest rates.
These real-time numbers and information form the base of your costing sheet.
Tip: Always maintain a small rate library in Excel where updated rates can be stored for quick reference.
Step 2- Build Skeleton of the Itinerary
Now that you have all the required information and rates, start putting it together, beginning with the itinerary. In this step, you have to list down day-wise activities, transfer points, and accommodation changes.
Let’s take an example of a Dubai Tour Package: 3N/4D (2 pax)
Step 3- Add Accommodations and other components
Next up is hotel, meal plan, inclusions and exclusions according to the requirements of the client.
Note: You can add more hotel options of hotels to the list of different price brackets if they fall under the budget and requirements of the client.
Step 4- Add Transportation Costs
Notes
- All transfers in the current example are on a private basis (otherwise specified in detail).
- The type of vehicle can be adjusted based on luggage or passenger preference.
- Shared transfers (like city tours) are priced per person.
Step 5- Markup and Tax
Note: In the above example, the (Cost+tax) + (Markup + tax) method has been used.
Different business types use different strategies of pricing according to their business model. Some of the commonly used pricing models in the travel industry are:
- Cost+Markup+Tax pricing: When markup & tax are added to the total cost.
- (Cost+tax) + (Markup + tax): When the cost package already includes taxes, and after adding makeup, the tax is only calculated on the markup.
- Component-wise markup: When the percentage of markup added on each component (Hotel, activity & transportation) is different, e.g. 5% markup on hotel & 15% markup on transportation.
Step 6- Formatting the Tour Package
Once costing is done, format the tour package professionally. This stage is very important, but most of the travel businesses tend to skip it. Formatting adds value to your brand and creates a good impression on clients that lasts forever.
- Add header and footer: with your company details & logo
- Insert destination/ activities/hotel images for visual appeal
- Highlight inclusions & exclusions clearly so that the customer gets clear understanding what all is covered in the quotation
- Make sure your T&Cs, cancellation policies and payment policies are clear
- TIP: If possible, help customers with information about the destination, weather conditions, your history and contact details of the itinerary curator.
This part is also valuable because presentation often influences client confidence more than raw numbers.
Wait: Take a minute & think!
Now that you have learned the way of costing a tour package manually, aren’t you curious to find out whether this is the only way other DMCs and tour operators in the travel industry are working?
Let’s get some facts clear.
- By now, you or your team must have spent over two hours just to create one tour package and calculate its costing properly.
- This usually means handling multiple Excel sheets, going back and forth in chats or emails to get correct rates, and manually typing every detail of the package.
- The real challenge is that rates for specific dates and service types are rarely easy to find. They are often hidden inside long contracts, seasonal rate sheets, or old PDFs, and your team has to search through all of them just to get the right information.
But what if I tell you that this 2-hour-long process can be done in 60 seconds?
Unbelievable right! But not impossible with Sembark’s travel itinerary builder; daily 920+ DMCs complete this lengthy process in a minute. How?
Get SEMBARK’s 60 Seconds Quotation Builder
Sembark Travel CRM Software has automated the process of creating a quotation with auto tour costing. With the help of Sembark, you can cut down on 95% of your manual effort & time that goes into creating & costing one tour package. Instead of manual hard work, get yourself:
- Instant Select Itineraries via Drop-Down: Just click, select & fill the itinerary in Sembark, no typing required. Easily pick destinations, hotels, cab, flights and activities with a few clicks. Easily fill inclusions, hotels, transport, & Flights with drop-down.
- Auto-Tour Costing: The system itself calculates and picks the cost from the backend (according to the rate sheet you upload at the time of onboarding). Eliminating any chance of error.
- Component-Wise Markup & Tax: Customise your makeup and tax strategy according to the need, with 3 pricing strategies available in Sembark.
- Easy Share- Email, WhatsApp, PDF, and Doc File according to your requirement in one click from the system.
Click here to watch the full video.
What will you choose: 2 hours or 60 Seconds?
Every second you delay replying to a customer is a second your competitor gets a chance to win them away.
With rising competition in the travel industry, whether you’re a DMC, Outbound Tour Operator, or Inbound Tour Operator, your tour package is the crucial element that makes or breaks the deal.
It’s time to work smart, not hard.
Make the smart choice before it’s too late: Choose SEMBARK: An Award-Winning Travel CRM and experience lightning-fast, professional tour package costing.
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