By Taz Bareham — 8 Sep 2014
You should never have just one set price all year round for your tour or activity. There are several pricing strategies to choose from depending on the situation, timing and nature of your activity instead of simply having a fixed price.
It’s the law of supply and demand. Think about how you can maximise your profit by adjusting your price depending on how in-demand your tours are.
Here are some pricing strategies you can use.
Odds are, you already have this in place. It’s the most basic pricing strategy being used by tour operators. But are you really using it enough? Do you only have a high vs a low season?
Have a look at your numbers over the past few years and consider whether it makes sense to have 3 or more seasons in your pricing.
It’s common to have different levels of customer demand throughout different days of the week. Why not make your busy days more expensive, or make your quiet days less expensive?
That way you can boost your profit because people who are available on your quiet days will take advantage of the cheaper price, meaning you have more space on your busy days. Your overall sales numbers will jump.
If you have limited resources, this is the best way to maximise your profit when you’re in extremely high demand. Don’t think twice – have a huge price difference based on time of day.
For example, if you rent out kayaks at a resort, during high season your 8am rental price could be $15/hr while it jumps to $40/hr between 10am to 4pm.
Go beyond your peak season rate when you have exceptionally high demand (for example, public holidays like Christmas) or when you have exceptionally high operating costs.
People expect your prices to be higher during these times.
Finally, cheaper last minute pricing is a good way to incrementally drive up your revenue. However, you need a way to quickly tell the world about it, otherwise the discount hunters won’t be able to find your deal!
Without a successful method to advertise your last minute prices, you will end up giving your discount to walk-in customers who would’ve paid full price.