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Sources of Income of tour operator

1. Variable mark-up - based on contracted rates from suppliers: the tour operator makes or adds his own mark-up, which should not be higher than the rate of his suppliers.

2. Use of cost savers and concessions: Example: 15+1=16 free of charge. A maximum of 4 concessions is allowed. For a group of 64 persons, suppliers pay for 60 only and the 4 is income for the tour operator.

3. Use of advance deposits and cancellation fee: money can be used for other services

4. By selling optional tours: selling services outside the tour package

5. Foreign exchange earning: tour operators can gain or lose on this facet, depending on the exchange rate.

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Commissions from selling to vendors

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Sources of earnings of a Tour Operator

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