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For many small to mid-sized tour and activity operators, deciding whether to pass booking fees to customers can feel like walking a tightrope. On the one hand, you want to protect your bottom line. On the other, you want to keep your guests happy and your booking experiences seamless.
Booking fees for tour operators, whether they come from credit card charges or booking systems, can add up quickly. But should those costs be shared with customers, or absorbed into your pricing? In this article, we’ll walk through the pros and cons of absorbing vs. passing on booking fees, current industry trends, tour business profitability tips, and how online booking systems like Rezgo give you the flexibility to make the best choice for your tour business.
What are booking fees and where do they come from?
Booking fees are the additional charges that arise when a customer books a tour or activity online. These aren’t random or hidden costs. Rather, they exist to cover the services and technology that make secure, convenient online transactions possible.
Tour operator service fees often include credit card processing fees (usually between 2-3% of the transaction), fees from your booking system, and charges for any third-party integrations or payment gateways you use.
What types of fees do tour operators commonly face?
Tour and activity businesses deal with a variety of both fixed and variable fees, but credit card fees for tour operators are one of the most common. Every time a guest pays online, your payment processor or bank deducts a small percentage of the transaction, typically around 2-3%. While these fees might seem small individually, they add up quickly when you’re handling dozens or hundreds of bookings each month.
In addition to payment processing costs, you’re likely paying fees to your online booking system. Some platforms charge a flat monthly fee, while others, like Rezgo, operate on a per-booking model that only charges you when you make a sale. This performance-based structure helps keep your overhead predictable and aligned with your business growth.
If you use Online Travel Agencies (OTAs) such as Viator, GetYourGuide, or Booking.com to boost exposure, you’ll also be paying commission fees. These can range anywhere from 15 – 25% per booking, or higher. Finally, if you’ve added third-party tools like automated review requests, upselling software, or customer relationship management (CRM) tools, you might face separate subscription or usage fees for those services, too.
Understanding which of these expenses are essential and which are optional can help you decide where (and if) you need to recover costs through customer fees.
What are the pros of passing booking fees?
Passing booking fees onto customers offers several advantages for tour operators, particularly those looking to improve profit margins without raising their base prices.
Cost Recovery
One of the biggest benefits is cost recovery. By charging a booking fee, you offset transaction costs without needing to increase your advertised tour rates. This keeps your core pricing competitive while still covering your expenses.
Pricing Transparency
This approach also promotes pricing transparency. Rather than hiding the cost of technology and payment processing within your tour price, a line-item fee shows customers exactly what they’re paying for. Many tour guests appreciate this clarity, especially if the fee is explained as covering secure online bookings or credit card usage.
Pay-per-Booking
Another benefit is that the fee is only charged when a customer actually books, meaning you only pass on costs when you generate revenue. This way, you’re not building fees into your pricing unnecessarily or paying upfront for services not in use.
Rezgo’s booking system supports this model by giving you the tools to customize how fees are presented. You can choose when and how fees are shown, and update your pricing structure as your strategy evolves.
What are the cons of passing booking fees?
While passing on booking fees can help protect your profit margins, it’s not without risks.
Booking Abandonment
One potential downside is booking abandonment. If customers encounter unexpected fees late in the checkout process, they may second guess their purchase and exit before confirming the booking. This is especially true in price-sensitive markets or when competing businesses appear to offer “all-inclusive” pricing.
Trust Erosion
Another challenge is how these fees can impact your brand perception. Even small extra charges can be seen as nickel-and-diming, particularly if they aren’t clearly explained. This can erode trust and make your business appear less customer-focused, especially when compared to competitors who offer simpler pricing models.
Operational Complexity
From an operational standpoint, managing and justifying line-item fees may also introduce complexity. Your customer service team might field more questions about why certain charges appear. You may also need to spend extra time clearly communicating your pricing structure across your online platforms. And depending on which fees you plan to pass on, you might need to look into regulatory requirements.
How do fees impact customer perception and satisfaction?
For most customers, it’s not the existence of a fee that causes dissatisfaction; it’s how and when that fee is revealed. Studies in consumer behavior show that travelers are more likely to accept service or booking fees when they are disclosed upfront and when the value provided is obvious.
UC Berkeley’s Haas School of Business found that drip pricing – the practice of revealing fees later in the buying process – significantly reduces customer satisfaction and decreases purchase rates by up to 21%. Inversely, when prices were made transparent from the very start, consumers reported higher trust and were more likely to complete their transactions.
Customers tend to respond positively when online booking system fees are explained clearly. For example, as a cost associated with secure credit card processing or supporting a robust online booking experience. On the flip side, surprise fees at checkout can feel like a bait-and-switch, especially if they aren’t mentioned during earlier steps in the booking flow. This can result in frustration, reduced trust, and even negative reviews.
One way to reduce this friction is to bundle fees into your base tour price, creating a single all-inclusive rate. While this may slightly increase your listed price, it simplifies the customer experience and can lead to higher conversion rates, particularly among guests who value simplicity and convenience over itemized detail.
What are the industry trends around booking fees?
There is no industry wide consensus on how to handle booking fees, but some clear patterns have emerged. One major trend is that OTA commissions are almost never passed on to customers. This sets a strong consumer expectation that online prices include all costs, even if a portion goes to a third party.
Many small to mid-sized businesses choose to absorb booking platform fees, viewing them as a cost of doing business. Others, particularly those in niche markets or offering customized experiences, prefer to pass these fees on to customers, especially when platforms like Rezgo make it easy to do so transparently. Either way, your booking system should support your choice.
What are successful tour operators doing?
Successful tour operators often take different paths based on their goals, brand, and audience. For instance, larger operators or those in highly competitive markets may choose to absorb all fees to maintain a frictionless checkout experience and higher conversion rates. These businesses rely on volume to make up for thinner per-booking margins.
On the other hand, specialty operators that offer high-end, boutique, or niche experiences, often pass on fees as a way to communicate transparency and maintain healthier margins. In these cases, guests may expect a more itemized breakdown, especially if the experience feels personalized or premium.
Some operators take it a step further by testing both approaches. They experiment with passing on fees for a few months, monitor conversion rates and customer feedback, and compare performance to periods when all fees were bundled. The common factor across successful strategies is consistency, communication, and a willingness to adapt based on what works best for their audience.
Don’t want to pass on fees? Here are other ways to manage costs
If passing booking fees to your customers doesn’t feel right for your business, there are still many effective ways to promote customer-friendly pricing for tours while continuing to protect your margins.
For starters, encourage direct bookings through your website or social media. This can reduce booking costs by reducing your reliance on OTAs, therefore allowing you to keep a larger share of each sale.
You might also consider bundling fees into your tour price by adjusting it slightly. This way, you’re still covering your costs, but in a way that feels more seamless to your customers.
Operational efficiency is another lever. By streamlining check-in procedures, automating follow-ups, and reducing manual administrative work, you can save time and money on every booking. You might also benefit from negotiating lower credit card processing fees with your provider or comparing platforms to find the best rates.
Should I charge customers booking fees?
Some businesses thrive by passing fees on to their customers with full transparency, while others find success in bundling all costs into one price for a smooth, all-inclusive experience.
What matters most is understanding your true costs, knowing your audience, and choosing a pricing strategy that aligns with your values and brand promise. The key to success is not in choosing the perfect approach, but in communicating clearly and adapting as your business grows.
Looking for a booking platform that lets you stay in control of your pricing and fees? Connect with Rezgo today!
Written By | Lindsay Stroud
