1. 1
Unit 10
Marketing Tour Business
TRAVEL AND TOUR OPERATIONS

2. 2
Unit objectives:
• Explain how to strategically price the tour.
• Define taxes and fees, and explain how they affect
travel suppliers and consumers.
• Explain ways to target a market based on price points
and level of service.
• Explain key marketing strategies e.g. Marketing mix
and Market segmentation.
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3. 3
Topics
• Tourism marketing components
• Target market
• Marketing concepts (4Ps and People)
• Types of expense
• Taxes and Fees
• Supply and Demand
TRAVEL AND TOUR OPERATIONS

4. 4
Tourism Marketing Components
• Buyer
• Product
• Producer
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5. 5
Target Market
Target market based on price points and level
of service:
• The lap of Luxury
• The mass Affluent
• A Hostel world
TRAVEL AND TOUR OPERATIONS

6. 6
Target Market
• The lap of luxury
Luxury travel generally means more space,
whether in a private jet, a commercial airliner,
or a hotel room.
Name-brand recognitions is often a significant
part of defining luxury.
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7. 7
Target Market
• The mass influent
The mass affluent markets are consumers who
ready to travel. New market opportunities are
available to travel and tourism providers
willing to create products and services for the
large, new, affluent middle class.
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8. 8
Target Market
• A hostel world
A hostel is an inn that provides the budget tourist
a minimal sheltered place to sleep for a
minimal price.
Luxury travel is out of the question for many
people’s budgets. A large market exists for
travel products and services offered at the
lowest possible rate.
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9. 9
Marketing Concepts
• Products: such as vacation package
• Price: the final price must be within the range the
target customer is able and willing to pay
• Promotion: use to make the target customer aware of
the product
• Place
• People: in the tourism industry, people, i.e. staff, are
important particularly in terms of their skills of
customer care
25 Feb 2009 TRAVEL AND TOUR OPERATIONS

10. 10
Type of expense
• Fix expense
• Variable expense
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11. 11
Taxes and Fees
Taxes and fees that added to the price of travel
products and services, as follows;
• Cost add-Ons
Government at the local and/ or national levels
legally levy the taxes added to the cost of
travel and tourism services. The taxes may be
calculated as a percentage of the total retail
cost or may be assessed as a flat amount.
TRAVEL AND TOUR OPERATIONS

12. 12
Taxes and Fees
• Hidden Fees
Some hotels ‘nickel and dime’ their customers
by adding fees to there final bills for items that
customers generally assume to be included in
the room rate, such as, swimming pool fee or
early arrival fee.
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13. 13
Supply and Demand
Yield Management
• Travel and tourism business seek level out the
number of travelers using their services at any
one time and to maximize their yield, or
revenue per person. To accomplish these goals,
the businesses use a tool referred to as ‘Yield
Management’.
TRAVEL AND TOUR OPERATIONS

14. 14
Yield Management (cont’)
• Yield management allows the seller to control
inventory and maximize profits. The idea
solution is to find a balance between selling
more seats in advance at a lower price and
selling fewer seats immediately at a higher
price.
TRAVEL AND TOUR OPERATIONS

15. 15
Supply and Demand
Elasticity
• A change in price can dramatically affect the
demand for some travel products and services.
• One of the factors impacting the elasticity of a
product or service is the availability of
alternatives.
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