How to Detect Exaggerated Tour Operator Savings Claims

Operators often tout their tours for the “savings” they provide rather than the features they offer. A current case in point: a release highlighting a tour that could “save” you about $2,500 per person compared with doing the same trip on your own. My calculations for the same trip, however, show that, at best, the tour cost can about match the cost of the same arrangements made individually.

In this case, the base price for a seven-night upscale tour to Rome, Amalfi, and Capri is $4,390 per person double occupancy, land only. That total cost covers seven nights in top five-star hotels; five dinners, three lunches, and daily breakfasts; sightseeing; transfers; first-class rail travel between Rome and Naples; bus and boat excursions; and most tips and service charges. The release claims that doing the trip independently would cost almost $7,000, per person, based on an itemized breakdown, so the tour “saves” you a little over $2,500 per person. {{{SmarterBuddy|align=left}}}As far as I can tell, however, some of the items in that breakdown are highly exaggerated. For example:

• If you arrange your own travel, says the release, you’d pay $3,830 per person, or $7,674 per couple, for accommodations at those top hotels. But I priced those same hotels separately at $2,771 per couple, total, with prices in Rome and Amalfi from Booking.com and prices in Capri from the hotel’s own site. Those prices include VAT and breakfast. Just the hotel difference of almost $5,000 wipes out the claimed “saving.”
• The breakdown also claims a couple would spend $460 for “transfers,” a bit stiff when you consider that a taxi from the airport downtown costs about $70 and most other taxi rides cost about $20. It claims you’d spend a total of $1,428 for the five dinners and three lunches that the tour includes, or about $90 per person per meal. To me, that’s high, even for expensive Italy. And the sightseeing tab of more than $400 a day also seems over the top—it’s certainly more than I’d pay even for professional guides.

This conclusion is similar to the results I’ve found almost every time I’ve deconstructed someone’s tour package. The claimed “savings” almost always result from a serious overestimation of the costs of independent travel—sometimes puffing prices, other times overvaluing some of the intangibles and services.

I’m sorry to see tour operators claiming “savings” as a reason to buy, when what really matters is the set of features unique to good package tours: full-time escorts, professional guides at the important stops, someone else to take care of your baggage throughout the trip, someone else to arrange all the necessary local and intercity transportation, and—occasionally—private entry to attractions at off-peak times. These features provide real “value added” in a good package, and they’re the reason that many travelers prefer group tours, even when they know that they could do the same or equivalent for less if they arranged everything themselves.

The fact is that lots of people don’t want the hassle and don’t want to spend the time required to arrange everything themselves. I know of several very frugal (I may even say “cheap”) travelers who happily and knowingly pay for the convenience and ease of tours. The specific tour I examined is certainly a good value for a top-of-the-line tour; why not leave it at that and forget the “savings?”

In today’s “no such thing as a free lunch” illustration, it’s clear that tour operators have to charge more for their tours than they pay out to the suppliers who provide the components of those tours. And although tour operators get their hotels and other arrangements at wholesale prices, these days ordinary consumers can come close to duplicating those wholesale prices—and consumers don’t have to pay themselves for overhead and make a profit.
My suggestion to operators is simple: Pitch your strong point—features—and leave the “savings” to savings accounts.

Your Turn

How do you determine whether or not a tour offers a good value? Do you find that operators exaggerate their claims? Share your thoughts by submitting a comment below!