If a travel destination is cheaper, will an organized tour to that destination cost proportionally less?
That depends on where you make the booking.
I once got an e-mail from a reader asking this: “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 Italy.”
In many cases, she’s right. I was reminded of this the last time I got a glossy catalog in the mail from a big international tour company. They’re a fine company and are definitely going to take care of your every waking need during a tour and they put their guests 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 $25,000 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 for a family.
How does that compare to what you will spend in Vietnam on your own? Well, we spent $150 per day for my family of three and that didn’t require much sacrificing. We stayed in decent air-conditioned 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.
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.
I’ve also seen tours to Nepal listed at $1,500 per day. Since it’s hard to find a hotel priced higher than $200 a night there, what’s the deal? Are they getting escorted around the mountains by helicopter?
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, etc. to give you the trip of a lifetime. But half what you pay may just be 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 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.
A typical mark-up when a big international company pays the small local tour company is 25%. Some may take 10% if they’re doing nothing but passing on customer names, or they may take 50% if they’re doing a lot of marketing or sending one of their own staffers. The arrangement can be anywhere in between.
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 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 more than $100 per day double. 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 about four times more expensive. If you look at a big company like Abercrombie & Kent, Spain costs the same ($500 a day per person) as Cambodia. Book it all yourself and Cambodia can cost a fraction of what Spain does.
Why Book an Organized Tour at All?
Like many independent travelers that started out as backpackers, I’m wired to be skeptical of organized group tours. The whole idea of being herded around from place to place doesn’t usually work for me. But having done it a few times in the Galapagos, Peru, and Nepal, I understand why some people love to travel that way. You don’t have to spend days or weeks researching and planning, for one thing. A group of you can each pull out a credit card and let someone else take care of the details. You have some built-in companions. Most importantly, if something goes wrong it’s somebody else’s job to take care of it. If you’re on a short vacation, all of that can be appealing.
Some adventure activities must be booked as a group activitity and it’s hard to arrange on your own. Think of remote white-water rafting, the Inca Trail, a small ship cruise, or jungle treks with a local guide. If you book a trip with an experienced company who has been doing this trip for years, there’s a good chance things will go well. They’ll have insurance. They’ll have capable guides. Safety measures will be in place.
There’s also the annoying truth that you could end up in better hotels with an organized tour. See the note on that at the bottom.
Booking Adventure Locally to Save Money
If you do decide to go on an adventure tour, for one day or three weeks, you don’t have to set it all up from home, with a company based in your home country. If you do, much of what you spend is just covering marketing and overhead. Many people with more money than time are fine with that and again, I don’t think they’re being dumb necessarily. They are willing to pay for the peace of mind and the home country staffers who will make arrangements.
If you are on a tight budget, however, and have plenty of time, go through a local company instead. Here are some examples of the difference:
– Annapurna Circuit tour with porter arranged in Kathmandu or Pokhara: around $50 each per day or less – less than $1,000.
– Same Annapurna Circuit tour booked with a well-known international tour company: $2,999 to $3,299
– Inca Trail tour with Peru Treks: $735 all-in for the four-day, three-night guided trip with a shared porter, Machu Picchu tickets, and a train ride.
– Same Inca Trail tour with a U.S.-based company: $2,100+.
– 9-day Belize adventure trip with Dangriga-based Island Expeditions: $2,199
– Same 9-day trip booked through an international tour company: $4,399
If you’re flush and it’s worth it to just write a check and be done with it, let ‘er rip. But if you have more time than money, do some digging around.
How to Find Local Tour Companies
So how do you find these locally based adventure tour companies? And how do you know which ones are dependable?
Finding them is not all that hard if you invest a little time. You can search around on Google or TripAdvisor to start and see how others have rated them. Locally you can ask around or you can put messages out on social media to get answers. Good guidebooks (yes, they’re still worth the money) can save you a lot of hunting around. The author usually knows which companies have a good reputation and will list approximate prices.
Understand that you can usually connect with the same local company that REI, Abercrombie & Kent, Tauk Tours, or Backcountry are using. The guide will just be wearing a different polo shirt. Those companies want the most dependable partner, of course, so if you can find out who that is, you’ll probably be in good hands. One way to find out is to just ask. “Who do you do trips for when customers don’t book directly?”
For short tours, you can usually book the trip through Viator or GetYourGuide. There will still often be a mark-up, but it will be 20%, which isn’t too hard to stomach, and that will save you some research time. Again, there’s a ratings system and a feedback loop. Companies that don’t treat their customers right won’t be allowed to stay on the platform.
The Middle Ground: Specialist Tour Agencies
It doesn’t have to be all or nothing, international or local. There are specialist tour companies that operate certain kinds of tours or are based in a certain area that do one thing really well. Seek out a specialist agency
These companies can be based in the U.S. (such as OARS for whitewater rafting and kayaking) or based in the region where they operate, but do all or most of their marketing in North America and Europe. Many times the best ones are listed in annual “destination specialist” round-ups in the major travel magazines. Local outdoor gear and luggage retailers often arrange tours as well, such as regional adventure tours set up by a local bike or ski shop.
The reason to book with one of these companies that they really know their stuff. If an organization does nothing but book bicycle tours in Europe, you know your tour is probably going to go off without a hitch. If a company is in Belize and does nothing but book Belize tours, you can assume they know the country inside and out. They will be using guides who know their stuff.
There are also tour companies that cater to budget travelers who can put up with more discomfort than general tourists in a hurry. So you will pay more, but not a massive amount more if you book through G Adventures or Intrepid, for example.
Plus, although these are professional, well-run operations, they do tend to reflect the local pricing environment better than than the general tour companies. So when BikeTours.com books you on a trip to Italy, it’ll cost more than a biking trip through the Balkans or one in rural Portugal. Do your homework and you could find the best of both worlds.
Sometimes that company does take care of them the whole time, by owning assets (vans, kayaks, small ships), having direct local employees, and a local business license. That was the case when I went on a bike tour with Lifecycle Adventures in Oregon.
What About Hotels?
This is where it gets tricky. It is not uncommon that you will pay far more booking a hotel room than the boisterous people down the hall from that tour group paid. Anything bought in bulk tends to result in a discount and that applies to hotel rooms as well. This is true for Cox & Kings at the top and true for G Adventures at the bottom. Since the big tour companies book so many rooms at once, you can actually upgrade your hotel experience by being on one of these tours. You don’t really know how much each place costs though: that’s all rolled into the total price. Usually for the tour operators there are tiers available, with the highest tier only staying at the best of the best properties along the way.
There’s also some comfort in not having to make a bunch of decisions every day that are going to tax your mental energy while you’re on vacation. You don’t have to choose a hotel for each spot or worry that it’s going to be an unhappy surprise. (Usually).
There’s no wrong or right answer on this adventure tour spectrum, but just be aware of what you are paying for an why. Every person inserted into the process is going to cost you. If the service is worth it, pay with a smile. If it’s not, you can probably do better on your own by buying direct.