Pricing a travel package correctly is both an art and a science. Price too high and you lose the client. Price too low and you lose money. This guide walks through the exact calculation every Indian travel agent should use.
Step 1: Calculate your base cost
Add up all vendor costs:
- Hotel (per night × nights)
- Flights (per person × pax)
- Transfers
- Activities and sightseeing
- Visa assistance fees
- Any other vendor costs
If costs are in foreign currency, convert to INR at the current rate. Always use a slightly conservative rate (add 1–2%) to protect against fluctuations.
Step 2: Apply your markup
Your markup covers your profit, overhead, and risk. Typical markups by segment:
| Segment | Typical markup |
|---|---|
| Luxury international | 18–25% |
| Domestic packages | 12–18% |
| Corporate/MICE | 10–15% |
| Budget packages | 8–12% |
Formula: Selling price = Base cost × (1 + markup%)
Step 3: Add GST
For most tour operator packages, GST is 5% on the selling price.
Formula: GST amount = Selling price × 5%
Note: At 5% GST, you cannot claim input tax credit. This is the standard trade-off for tour operators.
Step 4: Check for TCS (international packages only)
TCS (Tax Collected at Source) applies to overseas (international) tour packages.
TCS rate: 2% on the full package value
When TCS applies:
- International (overseas) package ✓
Step 5: Calculate per-person price
Divide the grand total by the number of travellers. For families with children, use a weighted calculation:
- Adults: full share
- Children (with bed): 75% of adult share
- Children (without bed): 50% of adult share
- Infants: 10% of adult share
Example calculation
Package: Dubai 5 nights, 2 adults, 1 child (8 years, with bed)
| Item | Amount |
|---|---|
| Hotel (5 nights × ₹8,000) | ₹40,000 |
| Flights (2 adults + 1 child) | ₹75,000 |
| Transfers | ₹8,000 |
| Activities | ₹12,000 |
| Base cost | ₹1,35,000 |
| Markup (20%) | ₹27,000 |
| Selling price | ₹1,62,000 |
| GST (5%) | ₹8,100 |
| TCS (2%, international) | ₹3,402 |
| Grand total | ₹1,73,502 |
| Per adult | ₹63,092 |
| Per child (75%) | ₹47,319 |
How TripDraft automates this
TripDraft's costing engine does all of this automatically. You enter:
- Line items with amounts and currencies
- Markup percentage
- GST slab (5/12/18%)
- Whether TCS applies
TripDraft calculates the grand total, per-adult price, per-child price, and generates the cost summary block for your PDF - with the agent margin hidden from the client.