The value and use of individual pricing policy within the tour operator industry

Travelling abroad and to far-away countries used to be an adventurous undertaking with many uncertainties that scared of many travellers alike. This changed over the past years and tourism has become a much easier endeavour. While this change is positive for individual travellers as it leads to more possibility to book holidays without intermediates, it does form a limitation for the tour operators as travellers are less reliant on the tour operator industry. Due to these trends within the industry, tour operators need to adjust and find ways to stay relevant and attractive for customers.

While this trend does happen for many travellers, there are others which are still reliant on tour operators. This leads to the main point of the blog, people put other values to the same product. An experienced traveller will set the value lower for a packaged tour than a traveller that finds booking and finding a holiday a difficult endeavour. The question is, do you offer the same prices for both travellers or do you differentiate on price for different customers? That question is the basic principle of individual pricing policy.

Price differentiation has been a common used strategy already in which the pricing changes with certain variables such as tours being more expensive during the holidays but this change is the same for all customers and not focussed on an individualised approach. By going a step further than pricing and focussing on the individual demands of a customer, packages can potentially be sold for more money than anticipated. Individual pricing policy can come in many different forms such higher or lower pricing for certain segments but can also be utilized more diverse such as discounts and compensation for long term clients or potential customers to increase loyalty and commitment to the brand.

While this policy does potentially lead to increase commitment of customers and extra revenue & sales, it does have its risks as well which need to be accounted for. Packaged tours are often the same product for all customers involved and can lead to dissatisfaction of the customers realise a price difference, this needs to be handled diligently as to avoid displeased customers. This is the same case for offering low pricing to new customers, which seems like a great concept on the first hand but has its risks such as loyal customers being dissatisfied with disadvantages for actually being loyal.

Thus, tour operators need to tread this pricing policy with care; it carries it risks but if executed properly, will lead to an increased revenue and potentially increased customer loyalty & commitment. One of the first steps in individual pricing is to ensure a proper database and consumer profile so that the customer is well understood and pricing can be adjusted accordingly.

All in all, individual pricing is a great practice for the tour operator industry as consumers value the product differently and thus individual pricing can be beneficial as long as it is executed accordingly.


Bearne, S. (2016, February 26). How technology has transformed the travel industry. From Theguardian:

Butler, R. (1980). THE CONCEPT OF A TOURIST AREA CYCLE OF EVOLUTION:. Canadian Geographer, 5-12.

Chaffey, D. (2017, March 1). Mobile Marketing Statistics compilation. From Smart Insights:

Peelen, E., & Beltman, R. (2013). CRM definitions. In Customer Relationship Management (p. 13). Harlow: Pearson.




Leave a reaction

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.