How to Create Discount Pricing Strategy for Online Travel Agency

As a travel agency owner, you need to find different ways to attract new customers, keep hold of the old ones, and compete with others in the market. One way to do this is by creating a discount pricing strategy.

Discount pricing is one of the pricing strategies where you mark down the prices of your services. The main purpose of this strategy is to attract more customers and increase your overall sales.

Before setting a discount pricing strategy for your online travel business, you need a strong marketing strategy and financial analysis. In this article, we’ll walk you through the main components of pricing strategy that you need to understand first.

After that, we will demonstrate the process of creating discounts on your travel booking website using the two paid add-ons of the WP Travel Engine Plugin: Coupon Code and Group Discount. 

On top of that, you can get your questions answered with our detailed FAQs section. 

Now, let’s begin by going through the things to consider before setting up a pricing strategy for your online travel agency.

Things to Consider While Setting Up Pricing Strategy 

Before setting the pricing strategy for your online travel agency, you need to keep these things in mind:

  • First, ask yourself how unique your travel business is. If your travel business is unique, you will have more flexibility to decide your pricing. 
  • You should also determine what value-added services you offer to your customers inclusive of the experience.
  • Become clear on the target market and market positioning you would like to establish. 
  • Determine your operating costs and use them to calculate your break-even point. Make sure to find out what your minimum pricing needs to meet your profit goals. 
  • Be careful of your own financial position before setting up the pricing strategy to compete with other travel agencies in the market.

Important Components of Pricing Strategy

Your pricing strategy may include the following components:

Mark Up Pricing Strategy

Mark up pricing strategy requires you to set the prices for your holidays and tours to make sure that you make a profit on each sale. You should identify all the costs related to running your travel business, including the time spent on creating and promoting your holidays and tours.

Mark Down Pricing Strategy

A mark-down pricing strategy means you need to lower your prices in order to remain competitive. For instance, if the cost for your package is $200 per person, you might mark down your price to $150 per person to earn some profit on each booking. This is ideal during slower months as you can remain competitive in the travel market.

Rack Rate

As a travel agency owner, you need to have a rack rate. The rack rate is an official rate before any discounts are applied. Moreover, rack rates are the brochure prices printed in advance for the coming season.

For activity and attraction operators, their rack rate is likely to be charged all the time without any day-to-day discounting. However, accommodation operators, who are in the middle of the market, will be changing pricing almost every day for the month or two months ahead to fill gaps.

Seasonal Pricing

Seasonal pricing refers to different price levels throughout the year to cover low and high seasons. These are normally the same date periods each time, and they also apply for public holidays and local events where the dates vary each year.

Last-Minute Pricing

A last-minute pricing strategy is a common strategy for travel agencies to fill any last-minute gaps. It includes discounting prices according to take-up, which is promoted on last-minute booking websites.


Packages have become important for tourists to meet their holiday needs. It includes hotel, airfare, transfers, tours and activities, all for one inclusive price. Developing packages with complementary tourism partners in your area is the best way to stimulate demand and add value without the need to provide discounts.


Discounting is often unavoidable in a competitive market like the tourism industry. However, you need to be wary about discounting your prices on a regular basis to stimulate demand. It can end up costing you the profit margin.

While creating a discount price strategy, consider adding different conditions to a discounted price. It could be like a minimum stay or a number of travelers in the booking. If you keep on providing discounts without any conditions, you may run the risk of devaluing your product.

Common Pricing Types

There are basically two different pricing types including:

  • Per Person Pricing: This is a set price for individual travelers. It is commonly used by activity and transport operators, accommodation providers, and campsites. The options could include an adult, child, and senior citizen price. 
  • Per Unit Pricing: This is a set price for one unit of the product. For example, a price per night. Usually, this price is set for two people, so if the accommodation fits more than two people, it can include per person pricing with extra adult and extra child rates.

Different Ways to Discount a Price

You can provide discounts to your travel clients in many ways. The following are some of the popular discounts that you can offer:

1. Loyalty Member Discounts:

You can offer a loyalty program in your travel business to show your customers that you appreciate their loyalty. It encourages customers to book more trips from your travel agency. 

After your customers book a certain number of trips, you can add them as loyalty program members and offer them discounts. You can choose to give discounts on any holidays and packages on your travel website.

Loyalty member discounts can even urge a customer to purchase more expensive travel packages.

2. Seasonal Discounts:

You can offer seasonal discounts on different trips and holiday packages during the low seasons. People prefer not to travel much during the rainy season and extreme winter season. During this time, you can offer them a considerable discount to land in some sales and keep your travel business running.

3. Promotional Discounts:

If you want to drive more customers to your travel website and increase your travel sales, consider offering promotional discounts. Promotional discounts are those which you offer for a limited time. 

You can offer promotional discounts during holidays and other big events.

4. Volume Discounts:

Using this volume discount pricing strategy, you can offer customers a discount when they book packages from you in bulk. For example, if a user buys a travel service from you back to back for a considerable amount, you can offer a discount on a certain package or in the overall travel packages.

Steps to Create Discount Pricing Strategy Using Plugin

Here, we will show you the ways to create a discount pricing strategy on your travel website using the Group Discount add-ons of the WP Travel Engine plugin. Group Discount extension lets you offer a group discount based on the number of travelers when they book a trip. You can set a discount rate and range for travelers of different age groups. 

You can follow the video or the steps below to create a discount code using Group Discount Add-ons:

To begin the process, you should first install and activate the WP Travel Engine plugin on your travel website. Here is how you can do it:

First, you should download the zip file of the WP Travel Engine plugin. You can get the plugin zip file using the link below:

Now, go to your WordPress dashboard and redirect to Plugins -> Add New from the left sidebar. 

Add A New Plugin

Once you move to the next screen, click the Upload Plugin button to continue. 

upload new plugin

After that, click the Choose File button to select the zip file of the WP Travel Engine plugin that you downloaded earlier. 

Once you choose the file, click on the Install Now button to install the travel plugin on your WordPress. 

install WP Travel Engine plugin

After the plugin gets installed, click Activate Plugin to complete the process.  After activation, you can see the WP Travel Engine plugin at the left sidebar of your WordPress dashboard.

Now, go through these steps to include this extension to your travel booking website for creating a discount:

Head over to the WP Travel Engine plugin from the left sidebar of your WordPress dashboard and click Extensions to find the Group Discount extension for your website. 

go to WP travel Engine extensions

After that, click Get the Extension right below the Group Discount add-on. 

Once you click, you get redirected to the extension download page, from where you can get the Group Discount extension. 

Purchase Group Discount addon

Once you download the Group Discount extension, upload the extension folder to your /wp-content/plugins/ directory.

After that, activate WP Travel Engine – Group Discount from the Plugins menu within WordPress. 

activate Group discount extension

Once you activate the add-on, go to the WP Travel Engine > Plugin License from the left sidebar to activate its license. After adding the license key, click the Save Changes button to continue. 

activate Group Discount license key

Now, you can manage the settings for Group Discount via WP Travel Engine > Settings > Extension > Group Discount.

Group Discount setting

Here, enable the Group Discount option and then click the Save & Continue button to save the settings.

enable group discount extension

You can take a look at the Group Discount option by redirecting to Trips > Add New > Pricing and Dates > Packages > Edit > Pricing Categories.

Frequently Asked Questions (FAQs)

How can I choose my seasonal pricing strategy?

As an online travel agency, you can set a basic rate and then add seasonal rates for their customers. For instance, if a customer chooses a basic rate per night, then they can choose the seasonal rates during whichever date they want. 

You can add as many seasonal rates as you want. However, it is important that your seasonal rates cover at least the next 12 months. Else, your customers might book ahead at a cheaper rate and leave you out of pocket.

Is there any risk of a discount pricing strategy for the travel business?

Offering discounts can inherit some risks at times. By overdoing it, you may undervalue your own products and services. 

Some heavy discounts cause the customer to believe that there is something wrong with the product or service. Similarly, regular discounting can lower the perceived value and the overall quality of your business. You may end up without much profit from your travel business. 

As a result, it is recommended to plan your discount pricing strategy by keeping your profit margin under check.

Our Verdict:

Offering discounts can help you to scale your travel business and keep hold of your loyal customers. With a proper discount pricing strategy, you can see a frequent flow of customers towards your travel agency which increases your travel sales and scales your travel business. 

We hope that this thorough write-up on how to create a discount pricing strategy for an online travel agency helps you to plan your next business pricing strategy. Besides, our how-to guide on using travel plugin add-ons to create discounts on your travel packages gives you a more clear idea. 

If you have any additional advice or alternative views, feel free to share them with us in the comments section below. 

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