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January 21, 2006
Throwing half of it away
From time to time, I get random emails from people asking how I find the funding for my various traveling. Thanks to the internet, it's now possible to travel just about anywhere on a tight budget. Somewhere, someone is offering a bargain.
Getting bargains in off-season is like shooting fish in a barrel. For example, the air portion of our Europe trip last week was $278 round trip, New York to London. I'm paying airfare of $340 to go to Paris in March. Neither of these deals is hard to find; just check American Airlines's website. One could do a week in Europe in January for less than $1000 per person without resorting to staying in student accomodation or hostels.
I was watching Jeopardy tonight and saw an ad for Perillo Tours with an "amazing offer." Their constituency is, apparently, wealthy old folks. So I checked the price of their 14-day bus tour through Rome. In the shoulder season, an October departure from Albany, Perillo will charge you $9546 per couple. That doesn't include lunch or dinner.
How overpriced is this? Well, the air portion is $804 per person on travelocity. That leaves $7938 for the land portion. A cheap motorcoach tour with guide costs $40/person/day to run. Even though Italian hotels are notoriously overpriced, with the tour guides' deals, a hotel costs no more than $200/room with breakfast. That leaves $4300 of tour operator profit on a $9546 tour. Add in the kickbacks tour operators get from restaurants and souvenir shop operators, and this tour is half profit for Perillo.
In other words, for the convenience of having someone book your hotels, airport taxi, and busses, you pay $4300 more than you would pay by organizing the trip on your own. Alternatively, a tour that costs you $9546 costs the tour operator perhaps $4800.
Perhaps this is why people think that travel is prohibitively expensive. When you throw away half your money to a tour operator, traveling gets very expensive very quickly. Some "amazing offer."
Posted by adrianjo at January 21, 2006 07:33 PM