It depends on two things: how your rent scales and how much of the product you use. Buying is cheaper when the bill is flat and small and you use a good part of what you pay for. Building becomes cheaper when the bill climbs with every booking, seat or guest and you use a narrow slice of the product.
Look at how the rent scales
Booking software for tours and activities can be priced per booking, as a share of booking value, per staff login, or as a mix. A flat fee stays still as you grow. A per-booking fee grows exactly as fast as the business does, and a share-of-value fee grows again when you raise prices.
So the same software can be cheap for an operator running a few departures a week and expensive for one running full boats all summer. The product did not change. The way it is charged for did the work.
Compare over three years, not one month
A monthly rental looks small next to a build quote, so make the comparison over a period long enough for both to show their real shape. Three years works well.
Suppose you take 6,000 bookings a year and pay 2 dollars per booking plus a flat 100 dollars a month. That is 12,000 plus 1,200, so 13,200 dollars a year and 39,600 over three years if bookings stay level. If you expect bookings to grow, the rented figure grows with them. Those numbers are invented. Replace them with your own in our software bill calculator, a free calculator that does the three-year sum for per-unit and flat fees.
On the building side, add any upfront cost, the monthly running cost times thirty-six, and your own time during the switch.
Costs people forget when buying
- Price rises at renewal.
- Add-on modules you end up needing: waivers, resource scheduling, gift vouchers, extra reporting.
- Tier jumps when you add staff or locations.
- Workarounds, such as the spreadsheet that exists because the software cannot handle how you assign guides or vehicles.
- The cost of leaving, if your data is hard to export.
Costs people forget when building
- Maintenance. Software needs fixes and updates for as long as you run it. Ask who does that and what it costs.
- Hosting, domains, backups and monitoring.
- Your time explaining how the business works and testing the result.
- Dependence on whoever built it, unless you hold the code and the accounts.
- Things a vendor adds without being asked, like new payment methods, which you would now have to request.
When buying is clearly cheaper
If you are small and the bill is modest, rent. If you are new and your process is still changing month to month, rent, because building around a process that has not settled wastes money.
If the software's main value is the network it connects you to, such as the online travel agencies and resellers that send you bookings, that part cannot be built at all. Card processing is the same.
We build custom software at Hiro, and our advice in those situations is still to stay put. Where building does make sense, we quote after seeing the bill, charge one flat monthly price that covers hosting, fixes and changes, and keep the connections to resellers and card processing in place. See what tour and activity operators can rebuild, or read the fuller argument in our guide to build versus rent for business software.