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Costing Principles: Aurora Jane A. Pasia Alexandra Nicole C. Papio

The document discusses the principles of costing for package tours. It explains that costing determines sales scale and profit margins during peak and lean seasons. Cost is defined as the total expenditures to acquire goods and services from hotels, transportation providers, and other suppliers. The costing process involves determining costs for transportation, hotels, meals, guides, and other miscellaneous expenses. Pricing for clients is determined by adding a markup, usually 7-15%, to the total cost to earn a profit.

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559 views14 pages

Costing Principles: Aurora Jane A. Pasia Alexandra Nicole C. Papio

The document discusses the principles of costing for package tours. It explains that costing determines sales scale and profit margins during peak and lean seasons. Cost is defined as the total expenditures to acquire goods and services from hotels, transportation providers, and other suppliers. The costing process involves determining costs for transportation, hotels, meals, guides, and other miscellaneous expenses. Pricing for clients is determined by adding a markup, usually 7-15%, to the total cost to earn a profit.

Uploaded by

rhyzene
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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COSTING

PRINCIPLES
Aurora Jane A. Pasia
Alexandra Nicole C. Papio
“Accounting
“Accounting is
is
the
the Language
Language ofof
Business”
Business”

-Warren
-Warren
Buffett
Buffett
COSTING PRINCIPLES
 Costing the package tour is an important exercise
that determines the scale of sale and margin of profit
in a peak and lean season. The actual cost of buying
the services is incurred to acquire the goods and
services for production and consumption.
 Cost is defined as the total expenditures for
acquiring the various components of services from
the hotel, resort, transporter, for the tailor-made or
ready-made packages.
 Cost is something that each tour operating company
makes a survey of the available supplies in the
market and the capability of the suppliers.
COSTING PROCESS IN TOURISM

Itinerary

Airlines Seats/ Railway Seats

Hotel & Meals

Ground Arrangements
HOTEL
 Different types of
hotel
 Types of rooms
 Tariff plans
 Extra bed charges
 Taxes
 Meals
HOTEL
 Availability of rooms
 Exact no. of peoples
 Chain of hotels- Oberoi, Taj etc.
 Regular Contact and Good
Relationship
 Extra Bed: INR 1800 DB + INR 300
= INR 2100
 INR: 2100/3
MEALS
 Continental Plans (CP) =
Room + Breakfast.
 Modified American Plan
(MAP) = Room + Breakfast
or any one Meal.
 American Plan (AP) = Room
+ All Meals.
 European Plan (EP) = Only
Room – No meals.
 A La Carte = According to
the menu, pay their own bills
 Most travel agents don’t
include Lunch because of
sight seeing.
AIRLINES & RAILWAY
 Travel Agents should have
the knowledge of airfares
for different sectors as
required for itinerary or it
can be supplement.
 TA should be familiar with
train names, routes,
schedules and fares.
 Indian railways allow 90
days prior ticketing.
 Also Tatkal Seva is
available.
ROAD TRANSPORT
 Pick-up and Drop Facility
from Airport / Railway Station
to Hotel, Visiting places of
attractions or Sight Seeing.
 Travel Agents should contact
local transport operator for
calculating the cost of
vehicle for entire tour.
 Drivers charges, Parking
charges, toll taxes etc.
 Km travel/day. Extra charge
for extra Km.
 Ac/ Non Ac vehicles.
 Cruise
 Cruise packages for three to
five days.
 Cost varies for different
categories or rooms, cabin,
on board facilities etc.
 Local Guides Charges

 English speaking or foreign


language speaker.
 Explain monuments or other
sight seeing.
 Thus costing includes total
Guides charge divide per
person.
MISCELLANEOUS
 Entrance fees – Museum, Historical
forts, Palaces, Churches and similar
charges.
 Cultural show in the evening
 Porterage
 Desert safari
 Toll taxes
PRICING
 Mark-up
 In order to earn profits the travel
agents and travel tour operators add a
mark up to the total cost before
quoting the price to the client.
Generally 7-15% commission.
 Gross rate
 Supplier gives the Travel Agent which
includes the commission generally
10%.
THANK YOU AND
GOD BLESS

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