If a travel destination is cheaper, will an organized tour to that destination cost proportionally less?

Probably not.

A couple months back I got an e-mail from an older woman saying, “I understand what you are saying about the destination making the biggest difference out of anything in your travel budget, but why does that not show up in tour prices? It seems like booking a tour to India or Peru is going to cost me just as much as booking one to Greece or Spain.”

In many cases, she’s right. I was reminded of this when I got a glossy catalog in the mail the other day from Geographic Expeditions. They’re a fine company and are definitely going to take care of your every waking need during a tour and will ensure that you’re staying in top-notch hotels. Still, this catalog was on their family adventures and my eyes popped out when I saw some of the prices. A 13-day Vietnam tour listed prices starting at a level that would cost a family of four 25 thousand U.S. dollars. And no, that’s not counting airfare. From $7,330 for adults, from $5,775 for children. Divide that $26,210 by 13 days and it’s a cost of more than $2,000 per day.

How does that compare to what you will spend in Vietnam on your own? Well, we spent $150 per day for a family of three and that didn’t require much sacrificing. We stayed in decent hotels, ate at good restaurants all meals, took a first-class overnight train, and hired a lot of taxis. Even if we had traveled to a wider area and taken organized tours of Sapa and Ha Long Bay, it would have required some serious effort to spend more than $500 a day. After all, the best hotel in Hanoi is often less than $250 and then it drops down fast after that. (See the earlier post on travel prices in Vietnam.)

I honestly don’t think I could spend $2,000 a day in Vietnam without buying a motorbike each day or two and mixing gold leaf into my spring rolls.

Where the Travel Tour Price Money Goes

Any upscale tour company will tell you that what you pay goes toward the best vehicles, the best guides, special access tours, yada yada yada, and that’s all true. But half of it is also going to the tour company. Think of it as a consulting fee, paying for their expertise and time. They often then outsource to the local inbound operator that does the real work on the ground. So if you follow that logic further, yes you can usually hire the very best local tour company for half what you would pay the one at home. Pay your own way and arrange a guide yourself and you can cut it in half again. Much of what you spend with a big brand name tour company is going toward marketing and administration.

There’s nothing wrong with any of this and it’s a smart business model that has worked well for a very long time. People with loads of money and not much time will gladly pay a premium price for a luxury adventure tour to get all the details taken care of for them by someone in their home country and to be assured of a flawless (or close to it) experience after they arrive. Someone will be seeing to their every need and there’s a voice to complain to back home if something goes wrong.

That kind of hand-holding evens out the price, which brings us back to the original question. If you book an organized tour in a cheap country, will it cost less than one in an expensive country? It should, and with a cheaper company like Adventure Life, G Adventures, or Intrepid it will make some difference because they are staying at simpler hotels and pass on more of the savings. Usually though, there’s little correlation between actual ground costs and tour costs with a major adventure outfitter or luxury tour company. Even with Intrepid, a two-week tour in India starts at $128 per day. One two-week tour in Australia starts at $239 per day. This despite the fact that India is one of The World’s Cheapest Destinations and Australia is currently one of the world’s most expensive. If you look at a big company like Abercrombie & Kent, Spain costs the same ($500 to $600 a day per person) as mainland Ecuador. Book it all yourself and Ecuador can cost 1/4 or less what Spain does.

To get the real savings, you have to be paying the bills yourself, no middleman. So get a copy of The World’s Cheapest Destinations and start planning!

I once stayed at some crappy roadside motel in Nowheresville, Georgia. The towels were thin, the toiletries the cheapest you can buy, the carpet worn, the bathroom held together by many tubes of caulk.

The room rate listed on the back of the entrance door? $399 per night.

Of course nobody in the history of that motel has ever paid more than 1/4 of the listed price for that room. It’s a total joke.

Here’s a photo of the price at Element Miami Airport I stayed in a few days ago when I had some meetings nearby. It was a fine hotel I’d gladly stay in again, with a great suite layout and a kitchen. When I search various dates for it online, the rate is usually around $150 or so. Let’s give them the benefit of the doubt and say sometimes they’re able to charge double that amount. But here’s what’s on the door.

The original idea behind this practice was to keep hotel management or front desk clerks from gouging you. Cities or states required the “rack rate” be listed on the door as the maximum. If anyone paid more than what was listed, they could complain and get compensated.

Follow the logic of how hotel owners are going to respond and you know how we got into this silliness. If the hotel must list its maximum rate, the owner/manager is going to pull a ridiculously high number out of thin air and post it as a pipe dream. Nobody ever complains because nobody will ever pay anything close.

When I go on Trivago.com and search Miami hotel deals, I get 168 hotels to choose from in Miami proper (apart from the beach). That’s what keeps prices in check: competition. When people can go on that site and see prices from nearly every booking site out there, do we really need this silly system anymore?

Much of the “traveler” vs. “tourist” division people have in their head really comes down to time and money. Do you have more time than money? You probably consider yourself a traveler and look down at those crazy tourists who blow so much money overspending on everything. If you don’t consider yourself a tourist but your budget is huge and you’re in a hurry, you’re going to be viewed as one, fair or not. But you may look at those shoestring backpackers as having no fun at all.

I’m not here to judge as I’ve been in both camps quite a lot. At times I’ve had all the time in the world. But last Saturday I drove to Orlando just for the day to take my birthday girl daughter and two of her friends to a water park. Like everyone else there, I was a tourist. No way around it. If there were any question about it, look what we paid to rent a locker—and we needed two of the big ones.

Since my wife, daughter, and I took advantage of cheap Southeast Asia this summer (see travel prices in Cambodia), we know a thing or two about what it costs a traveler with the time and means to get out of the USA or Europe. For that $20 we spent on two jammed-full lockers for five people, we could have eaten two good meals, taken 10 taxi rides, or gotten four one-hour massages. For what those lockers cost, one person can enter one of the great wonders of the world: Angkor Wat.

For what a beer costs at this park ($6.35 for a 16-ounce Yuengling—I passed), I could have gotten legless in Siem Reap with 12 drafts and a tip or six bottles. For what I spent on parking alone, you could get an air-conditioned hotel room with a private bath in Vietnam. See the post linked at the bottom for details, but when we went to a smaller water park in Mexico, parking was free and a locker was a dollar.

If you’ve been around the world, you’re used to traveler prices. If you only go on vacation for a week or two once a year, you’re used to tourist prices. That’s why most of your relatives think travel has to be expensive. It can be—especially if you’re headed to one of the 10 most popular foreign destinations for Americans—but not if you’re taking your time exploring The World’s Cheapest Destinations.

It’s not that one camp is smart and one is stupid though. They’re two different worlds that sometimes intersect in the town square. Many in one camp could never dream of being in the other, but both can be just as happy because the don’t even want to be on the other side.

Despite the hit to my wallet, I had a blast at that water park.

But…here’s what a simpler one costs in Merida, Mexico.

In the big scheme of things to complain about, I’ll admit that dumb and annoying travel advertisements don’t rank very high on the scale. But after looking at these two ads for months across multiple publications, I’ve realized that they represent a black hole of stupidity, millions of dollars turned over to some ad agency with a good Powerpoint presentation instead of being spent in ways that could really bring in more visitors to a destination. They represent what’s so wrong with how destinations market themselves. Instead of courting evangelists, conversing with fans, and highlighting what makes this specific place truly special and worth visiting for a certain type of tourist, they go for the big dumb media splash in hopes of getting noticed by some fraction of the masses.

Exhibit A, this truly horrible magazine ad from South Africa Tourism. It’s the kind of thing that makes people scratch their heads and then ask, “What the f*&% were they thinking with THAT one?”

Although I’m tempted, I don’t want to sully this ad with any funny thought balloons or arrows pointing to the silly parts, so just check out the following list. 1) They’re about to get mauled. 2) The guide has a gun. Is he really going to shoot an elephant in Kruger National Park? 3) One of the women is wearing shorts in the middle of a patch of razor grass. 4) Really, you think this is going to be a fun position to be in when you go waltzing through the savannah—and you think your tour company will really allow it? No and no. 5) What’s that “exuberance of the locals” line all about? The exuberant elephants or some mystery unseen humans hiding in the grass?

Exhibit B is not as dangerous, but is doubly dumb. I’ve now seen this is six magazine issues, which tells me they’ve spent a double-buttload of money on it. But what does it mean?

For anyone who has actually been to Scottsdale, Arizona, this ad is laugh-out-loud funny. Scottsdale is a city of strip malls with gargantuan asphalt parking lots, shopping malls that are big enough to be seen from space, and convention resorts surrounding carefully manicured golf courses. It’s about as close to cowboys and cowgirls as a boots store in Tokyo. The only thing you’re likely to lasso there is the iPhone of a soccer mom who is texting while driving her Hummer. Or a retired grandma who’s moving too slowly on her ScooterStore transportation device—in one of those shopping malls. (Are the diamonds in the ad a reference to the fact they have Kay Jewelers outlets?)

I’m sure there are natural cacti somewhere outside of Phoenix and Scottsdale, but I was last there for three days and didn’t see a one. No diamonds in the sky either—the light pollution along the six-lane roads killed anything that may have been overhead.

There’s a demographic that actually likes all this and will get excited about it, especially if they can use their Marriott loyalty points to come play some golf. So show them what you’re really about. Be honest. Don’t try to trick the rest of us into the idea that you’re like Flagstaff or Santa Fe. That deception is ridiculously expensive and it never works.

Figure out what makes you unique and communicate that to us in an genuine way.

(And when it comes to handing money to that ad agency, you might want to start looking at some research reports concerning how people are making their actual vacation decisions. I hear there’s this newfangled thing called the Internet…)

Related silliness: Careful with those Tourism Slogans!

Ahhh, the joy of Prague in the high season

If you want to travel better for less, the simple solution is usually to avoid painting yourself into a corner with your plans.

I get interviewed a lot by the media as a value travel expert, usually looking for tips and tricks on how to travel better for less money, how to squeeze more out of a limited budget.

One of my goals with the Make Your Travel Dollars Worth a Fortune book was to show infrequent travelers how to travel better using some basic strategies. One key one is understanding that the more variables you leave open, the greater your savings are going to be.

For anything from a 3-day vacation to a year-long trip around the world, here are the factors that always impact the price:

1) Where you go

2) When you go

3) How you get there

4) Where you stay

5) How you eat, drink, and get around after arrival

Most of the time when people ask me for advice, they’ve already locked down three of these five variables, so there’s not much left to work with. “I’m going to Florence and Venice for a week this summer. Can you help me find a good deal?”

Ummm, no. If you must go to x country in y period, leaving z day and stay in a certain kind of lodging, what’s left? You’re now just fiddling with the margins: where to eat, what to see, and whether to take the metro or a taxi.

Or someone writes on a message board that they don’t think their trip around the world will cost very much because “we’re going to stay in hostels the whole time.” Good for you, but that’s only one factor—and has a much smaller impact than where you go to start with. If you’re trying to hit five continents in six months and the itinerary includes Western Europe and Japan, you’re going to spend a fortune even if you sleep on strangers’ sofas every night.

Keep all five of these variables open, however, and you can travel very well indeed. Choose your destination after you’ve looked at flight deals and got a sense of what it’s going to cost you for local food and transportation. Take your time to find good hotel values by going beyond the big booking engines. Go during shoulder season instead of when everyone else is heading there. Be open-minded, be flexible, and you’ll look like a travel deals guru in no time.