Module 3:

Tour Packaging
and Costing
Ms. Maria Regina Zaguirre Cruz
College of Hospitality and Tourism Management

TOU312 – Tour and Travel Management

 Learning Objectives:
✓ Identify the different
components of a tour, the
different types of tour
packages,
✓ Costing of tour packages,
✓ Preparing quotations &
proposals

Tour Packaging and Costing

 3

Tour Packaging and Costing

We often see tour packages every time
we attend travel expos or in travel web
pages, but what are they?

Tour Packaging and Costing

Tour Packages are a combination of two or more
travel components that normally include at least
one (1) night in the destination country or city. It is
a pre-arrangement, prepaid trip that combines
two or more travel components like airfare, airport
transfer, accommodation, and other services.
Practically, to define the tour package concept is
complex one rather understands.
5

Tour Packaging and Costing

 TYPES OF TOUR
PACKAGES
❑ Based on Preparation

❑ Based on Meal Inclusions

❑ Based on Included

Components
6

Tour Packaging and Costing

 Based on Preparation
1) Regular Sightseeing
Tour Package that are put together without consideration for the
specific and special interest or requirements of a certain traveller
or groups of travellers.
Pre-packaged for the general traveller and always feature well
known attraction or activities that have a high demand.
Packages prepared already and are being offered by agencies.

2) Ad Hoc Sightseeing
They are tour packages that are tailor made to the requirements
and specification of a particular traveller or groups of travellers.
Tailor made Packages based on the preferences of the client.
7

Tour Packaging and Costing

Based on Meal Inclusions
1) Free and Easy Package – Breakfast plus accommodation and
most of the time with transfers.
2) Halfboard Package – Two meals, accommodation, transfers,
activities (with or without tour guide)
3) Fullboard Package – Complete three meals, accommodation,
transfers, activities (with or without tour guide)

Tour Packaging and Costing

Based on Included Components
1) Ground arrangements
includes transfer and sightseeing tours only
only those activities (with or without guide) involving vehicle
within the destination (Transfer and Tours)

2) Land arrangement package

includes transfers, sightseeing tours and hotel accommodation
with or without meals. Can be with tour guide.
ground arrangement plus accommodation and meals and can be
with or without tour guide.

Tour Packaging and Costing

Based on Included Components
3) Inclusive Tour / Full Package
includes transfers, sightseeing tours and hotel accommodation
with or without meal plus transportation by land, sea or air.
this is land arrangement package WITH AIRFARE or any
transportation by sea or land from the origin to the destination.

4) Inclusive Escorted Tour Package

includes all with an escorted tour guide
inclusive tour package with tour guide.

10

Tour Packaging and Costing

There are a lot of people mistakenly think tour packages
are the same. Non-tourism people usually think that
when you say Tour Package it is an Inclusive Tour
Package. But if you read the inclusions, you can see that
it may be just a land arrangement package.

11

Tour Packaging and Costing

Components of Tour Packages

➢Transportation by air,
sea, or land, to and
from the point of
origin to a destination.
(E.g. Manila – Bangkok
on Thai Airways (TG)

12

Tour Packaging and Costing

 Components of Tour
Packages
➢ Transfers refers to the
transportation to and from the
destination gateway such as an
airport, pier or bus station to the
place of lodging and vice versa.
(E.g. Airport – Hotel – Airport by
Car/Coach service)
❖ Transfer could be arranged
by two options:
✓ SIC (Seat-In-Coach) Basis
– you share the vehicle
with other people
✓ Private Basis 13

Tour Packaging and Costing

 Components of Tour
Packages
➢ Tours or sightseeing a combination of transportation within the
destination and sites of interest, tour guide services, entrance
fees, entertainment or activities, and sometimes snacks or
meals.
➢ Half day sightseeing tour – operated in morning or
afternoon which usually includes a snack.
➢ Full day sightseeing tour – eight to ten hours with lunch
➢ Evening tour – operated after six in the evening which
usually includes dinner.
➢ Optional tour – tour that are not included in the package
for which the clients pays extra. Usually offered to clients
on their free day or free and easy day. An opportunity to
earn more. 14

Tour Packaging and Costing

 Components of Tour
Packages
➢ Hotel or Resort Accommodation refers to the lodging
and meals within the lodging establishments

15

Tour Packaging and Costing

 Components of Tour
Packages
➢ Tour Escorts, an individual who
travels with the client from the
point of origin and back and acts
as the manager of the tour groups.
Also known as the Tour Leader.
Tour escort/tour leader is part of
the tourist group. They are not
locals nor employee of your travel
agency. Possibly, a tour escort can
also be an employee of your
partner travel agency abroad
accompanying their client to our
country. 16

Tour Packaging and Costing

 How do tour packages
vary?
The price of a tour package varies according to the following:

Duration – refers to the number of days and nights included

in the package. of course, if you stay in the destination
longer, the more you have to pay.

Destination – a package may be for a single destination or

for multiple destination. a tour package may contain one
destination or combination of two or more destinations.
(e.g. Manila – Cebu – Tagbilaran – Manila)

17

Tour Packaging and Costing

 How do tour packages
vary?
• Category of Accommodation – the category of the
accommodation establishments may vary from a five-star
deluxe hotel (DLX), to four-star first class (FST), to a three-
star standard (STD) price will differ on the type of
accommodation you include in the package. The better or
the more luxurious your accommodation is, the more
expensive it gets.

18

Tour Packaging and Costing

 How do tour packages
vary?
• Meal Plan – refers to the number of meals per day included in
the package, whether served in the place of lodging or outside
the restaurant. Of course, you want to have more meals in your
package, the more you have to pay for it. Some clients prefer to
have less meals so that they can control their expenses and the
type of food they eat. Otherwise, the travel agency decides on
what food or which restaurant the client will eat during the tour.
➢ Full board basis – if all meals are included
➢ Half board basis – also known “Demi Pension” or “Modified
American Plan” only breakfast and lunch or dinner is
included
➢ European Plan – no meals are included in the package.
19

Tour Packaging and Costing

 How do tour packages
vary?
• Mode and Class of Transportation – refers to the mode of
transportation refers to air, sea or land travel and type of
equipment. Class of service is the quality of the
transportation equipment, facility, and amenities offered to
the passengers. Better transportation means more amenities
and more expensive.
Air Travel – class of service such as First, Business and
Economy class

Sea Travel – type of cabin: suite, first class, business, tourist

and economy

Land Travel – Air-conditioned or Ordinary service. 20

Tour Packaging and Costing

 21

Tour Packaging and Costing

 Contracting Rates
Negotiations with the identified supplier for the most
competitive rates, concessions and term & conditions
available to tour operator.

22

Tour Packaging and Costing

Confidential Tariff
• Sometimes referred to as Contracted Rates.
• Price list that contains wholesale prices of suppliers, usually
accommodation, distributed in confidence to tour operators or
travel management companies.

 Example of
Contracted Rates from
a hotel

23

Tour Packaging and Costing

 Types of Rates
❖Published Rates – Rates that are visible to the public
❖Contracted Rates – Discounted rates given by tour
suppliers to their partner travel agencies / tour operators,
usually from accommodations. Contracted rates given by
the supplier may differ from one travel agency to another.
❖Ad Hoc Rates / Special Rates – rates that are usually much
lower than the contracted rates, given when you have
group bookings, special arrangements, or the supplier
have promotional rates or deals during a certain period of
time.

24

Tour Packaging and Costing

 PATTO Rates
• These are land transportation rates of vehicles travelling
from Manila to different parts of Luzon.
• These are published rates or maximum selling rates to
customers.
• Travel agencies get discount from the PATTO Rates table.

Notes:
✓ PATTO – Philippine Association of Tourist Transport
Operators
✓ Overnight means 2 days 1 night
✓ Use the rate of the farthest destination.
✓ A copy of PATTO Rates is attached in this module.
25

Tour Packaging and Costing

 Vehicle Capacity
Car - maximum 2-3 pax

Van - maximum 8-9 pax

(depends on type of van)

Mini Bus (Coaster) - maximum 19-20 pax

Bus - maximum 45-49 pax

(for regular-sized buses)
26

Tour Packaging and Costing

➢ Sample
PATTO Rates

27

Tour Packaging and Costing

 How to use the PATTO
Rates?
The rates seen in the table are the rental rates based on the
time limit the vehicle will be used. For example, whole day
Metro Manila bus rental costs Php14,177.
If you want to know the day tour rate to Nagcarlan, Laguna
using a car, check under Laguna then look for Nagcarlan, the
rate Php 9,710

But these mentioned rates are still subject to supplier’s

discount for the travel agent. Usually, transport companies
give around 10-20% discount from the PATTO Rates. This
discounted rate will be the one used for the tour costing.

28

Tour Packaging and Costing

 How to use the PATTO
Rates?
Let’s go back to the Nagcarlan example. How about if you
want to stay overnight? Simply multiply the rate by 1.5 to get
the overnight rate or 2 days 1 night rate.
If you want to stay longer, just add the Extra Day rate on top
of the overnight rate. For example, to get the 3 days 2 nights
rate, you check for the day tour rate in the PATTO Rates then
multiply it by 1.5 to get the 2 days 1 night rate then add the
extra day rate.

*For cities with Time Limit of ‘36 Hours’ it means the rate is
already considered as overnight rate. No need to multiply by
1.5 to get overnight rate.
29

Tour Packaging and Costing

 SPECIAL RULES:
EXEMPTION TO THE x1.5 FORMULA OF GETTING THE
OVERNIGHT RATE IN TRANSPORTATION

1) Overnight computation / overnight formula of transport

rate x 1.5 is not applicable to Manila Rates (first bracket
in the PATTO Rates)
➢ Example: 4 Days 3 Nights Manila Full Day Tour = use the
Whole day Rate of Manila times 4 days. Do not compute
as: Wholeday Manila x 1.5 plus extra day plus extra day to
get the 4D3N Manila Package.

2) Destination/s with 36 Hours Time Limit in the PATTO

Rates means Overnight. Therefore, overnight computation
of transport rate x 1.5 is not applicable to get the 2 days.
➢ Example: 4 Days 3 Nights Legazpi, Albay = since Legazpi 30
rate is good for 36 Hours or Overnight, you get the rate of
Legazpi plus extra day plus extra day to get the 4D3N
Tour Packaging and Costing
Legazpi Package.
 SPECIAL RULES:
DINNER RATE IN PATTO
➢ Use of Dinner Rate in PATTO Rates, if the dinner venue is in
Manila otherwise, no need to use the dinner rate.

EXAMPLES:
➢ Metro Manila Wholeday Tour with dinner in Metro Manila = use
transpo dinner rate
➢ Tagaytay Day Tour then go back to Metro Manila for dinner = use
transpo dinner rate
➢ Cabanatuan Day Tour then go back to Metro Manila for dinner =
use transpo dinner rate
➢ Tagaytay Overnight Tour but will have their dinner in Tagaytay
also = no need for transpo dinner rate
➢ 4 Days 3 Nights Ilocos Tour but will have 3 dinners in Ilocos = no
need for transpo dinner rate because they are not coming back
to Manila for dinner.
➢ 3 Days Baguio Tour even when they have dinner in their itinerary 31

= no need for transpo dinner rate because they are not coming
back to Manila
Tourfor dinner.
Packaging and Costing
 Airline Rates (in GDS)

This is an example of airline rates from a GDS. You get the total amount
at the bottom most of the list, in this case use EUR 1,913.31 for your
32
costing. This is a per person rate.

Tour Packaging and Costing

 33

Tour Packaging and Costing

Costing and Pricing
Calculating the costs
and determining the
desired profits of the
various activities or
services included in the
itinerary, depending on
the number of
projected travellers
availing of the tour
package.
34

Tour Packaging and Costing

 COSTING KEY COMPONENTS
➢ Land Transportation (shared cost)
➢ Air Transportation (individual cost)
➢ Sea Transportation (individual cost)
➢ Tour Guide (shared cost)
➢ Entrance Fees/Activities (individual cost)
➢ Meals (usually individual cost)
➢ Accommodation (depends on number of room
occupants; usually shared cost except if single room or
one person in a room) *Choose the lowest room
category possible in your costing unless the client
requested for a higher room category.
➢ Mark-up (individual cost)
35

Tour Packaging and Costing

❑ Shared Cost – the amount is divided by all participants of
the trip
❑ Individual Cost – the amount is solely for one person and
not to be divided among the group members.

Note:
• Transportation = you compute for the days
• Accommodation = you compute for the nights
• Overnight means 2 days 1 night
36

Tour Packaging and Costing

 TOUR COSTING
EXAMPLE
3 DAYS 2 NIGHTS BATAAN for 30 Pax

Day 1 – Bataan Las Casas Filipinas

Depart Manila 0800H Deluxe Room – 5,500
Arrive Bataan 1200H Superior Room – 8,500
Lunch at a local restaurant (Php 400/pax)Junior Suite – 12,000
Extra Person – 3,000
Dambana ng Kagitingan (Mt. Samat) – 100/pax
Dinner at a local restaurant (Php 450/pax)Circle Transport
Check-in at Las Casas Filipinas (Bagac, Bataan)
35% discount

English Guide
Day 2 – Las Casas Filipinas de Acuzar Php 2,500 per day
Breakfast at the hotel
Tour around Las Casas Filipinas de Acuzar
Lunch inside Las Casas (Budget: Php 700/pax)
Free time at leisure
Dinner inside Las Casas (Budget: Php 700/pax) 37

Tour Packaging and Costing

 TOUR COSTING
EXAMPLE
3 DAYS 2 NIGHTS BATAAN for 30
Pax

Day 3 – Bataan to Manila

Breakfast at the hotel
Check-out from the hotel
Lunch at a local restaurant (Php
500/pax)
Limbagang Pinpin Museum (Php
50/pax)
Question:
Back to Manila
Compute for per person
rate based on twin
sharing, fullboard package
with 10% Mark-up 38

Tour Packaging and Costing

Computation:
Transportation (shared cost)
• Php 33,596 (Bagac, Bataan rate) less 35% (discount from
Circle Transport) = Php 21,837.40 (day tour) x 1.5 = Php
32,756.10 (2D1N rate)
• Php 19,135 (extra day rate) less 35% (discount from Circle
Transport) = Php 12,437.75 (extra day rate)
• Php 32,756.10 (2D1N rate) + Php 12,437.75 (extra day rate)
= Php 45,193.85 (3D2N Bagac, Bataan rate) divided by 30
pax = Php 1,506.46 per pax

Tour Guide (shared cost)

• Php 2,500 (guide’s fee per day) x 3 days = Php 7,500 (guide’s
fee for 3 days) divided by 30 pax = Php 250 per pax 39

Tour Packaging and Costing

Computation:
Entrance Fees (individual cost)
• Mt. Samat (Php 100 per pax) + Limbagang Pinpin Museum
(Php 50 per pax) = Php 150 per pax

Meals (individual cost)

• Day 1 Lunch – Php 400 per pax
• Day 1 Dinner – Php 450 per pax
• Day 2 Lunch – Php 700 per pax
• Day 2 Dinner – Php 700 per pax
• Day 3 Lunch – Php 500 per pax
Total Meal Cost – Php 2,750 per pax

40

Tour Packaging and Costing

Computation:
Hotel Accommodation (shared cost)
• Las Casas Filipinas de Acuzar – Deluxe Room – Php 5,500 per
room per night
Since we need the twin sharing rate, it means per room there
are two occupants.
Php 5,500 per room per night x 2 nights = Php 11,000 per
room for 2 nights
Php 11,000 divided by 2 persons = Php 5,500 per pax

Once you got all the per person rates per component, add it all
up. Don’t forget to add your desired mark-up to the computed
tour cost. 41

Tour Packaging and Costing

Computation:
Transportation Php 1,506.46 per pax
Tour Guide Php 250
Entrance Fees Php 150
Meals Php 2,750
Hotel Php 5,500
Total Cost Php 10,156.46 (you may multiply this to 1.1
to get the answer)
Add Mark-up (10%) Php 1,015.65
Nett Price Php 11,172.11 selling rate per person

Once you are done with the costing, you are now ready to prepare
the quotation to be proposed and presented to the client.
42

Tour Packaging and Costing

 43

Tour Packaging and Costing

Quotations and Proposal
❖Involves the presentation of the
services to be provided in a clear
and direct fashion
❖Includes the price to be offered,
the inclusions, and the
exclusions.
❖Provide fair terms and conditions
for the prospective client to
accept.
❖Quotation is the product of the
costing made, while proposal
includes the quotation and its
corresponding conditions. 44

Tour Packaging and Costing

➢ Sample Proposal

45

Tour Packaging and Costing

➢ (continuation) Sample Proposal

If the price and the conditions are accepted by the client, process all
requests with suppliers and gain confirmation from them. 46

Tour Packaging and Costing

 Booking Order
Below is an example of a confirmed request with a
supplier using a booking order.

47

Tour Packaging and Costing

 Thank you!
Ms. Maria Regina Zaguirre Cruz
College of Hospitality and Tourism Management

Tour Packaging and Costing

 References:
• Claravall, Bienvenido
(2013). Travel Agency &
Operations in the
Philippines. Manila:
Accumicro I.T. Solutions.

Tour Packaging and Costing