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