How to calculate per-tour and per-person costs

To run a profitable tour business in the UK, you must identify every 'variable cost' that occurs every time you run a trip—from the petrol in your van to the entry tickets for your guests. Knowing these numbers allows you to find your break-even point, which is the minimum amount you need to charge just to cover your expenses without making a loss.

1. Identify your 'Per-Tour' costs

These are costs that stay the same regardless of whether you have one person or ten people on the tour. If the tour runs, you pay these amounts. Common examples include:

• Guide Wages: Even if you are the guide, you should factor in a fair hourly rate for your time.
• Fuel and Transport: Estimate the mileage for the route and use current UK petrol or diesel prices. Don't forget to include parking fees or tolls (like the London Congestion Charge if applicable).
• Vehicle Wear and Tear: A small amount set aside for maintenance and tyres.

2. Identify your 'Per-Person' costs

These costs increase with every extra guest you sign up. If nobody turns up, you don't pay these. They typically include:

• Entry Fees: The cost of tickets to museums, castles, or attractions.
• Food and Drink: Any bottled water, snacks, or inclusive pub lunches.
• Insurance Premiums: Some public liability policies charge a small 'per-head' fee.
• Booking Commissions: If you sell through platforms like Viator, TripAdvisor, or GetYourGuide, they often take a commission (usually 20-25%) per ticket sold.

3. Use the calculation formula

To find out how much it costs you to host a single guest, use this simple table to organise your thoughts:

The Formula: (Total Per-Tour Costs ÷ Capacity) + Per-Person Costs = Your Base Cost.

Example: If it costs £100 in fuel and wages to run a van (Per-Tour), and you have 10 seats, that is £10 per seat. If the entry ticket and lunch (Per-Person) cost £20, your total base cost is £30 per person. To make a profit, you must charge more than £30.

4. Account for the 'Empty Seat' factor

In the UK tourism market, it is rare to be fully booked every single day. When calculating your costs, do not assume a full vehicle. Calculate your break-even point based on a 50% or 60% occupancy rate. This ensures that even on a quiet Tuesday, the guests who did book are covering the costs of the petrol and the guide.

Summary Tip

Always keep a spreadsheet of these costs and review them every six months. In the UK, petrol prices and attraction entry fees can fluctuate significantly, and failing to update your 'per-person' cost could mean your profit margins disappear without you realising it.