Company A offers a seven-day tour of western national parks for $1,500 per person. Company B offers a seven-day tour that includes all of the same destinations but charges $3,000 per person. Which tour is the better deal?
If you’re an experienced travel planner, you know that the answer to this question may not be as obvious as it seems. The calculations that goes into setting prices depend on numerous factors, not the least of which are the taste and expectations of travelers. For some groups, a $3,000 trip packed with upscale touches and exclusive experiences will be more attractive than a $1,500 bargain tour.
If you want to figure out the best value in travel for your group, it’s helpful to understand these five major factors in tour pricing and to know what your customers expect in each area.
Hotel Rates
Overnight accommodations are usually the largest expense in a travel package and often play the biggest role in determining a tour’s price. Tours with the same attractions and inclusions can differ dramatically in price if the operators use hotels of different calibers. Expect to pay significantly higher prices on tours that use full service hotels, luxury properties or resorts, or hotels that are closer to city centers or points of interest. If you’re looking to save money, consider tours that use limited-service hotels or properties located in suburbs outside of major cities.
Transportation
Transportation costs, including airfares, motorcoach charters and other similar expenses, are inherent to any group trip and are often set by market forces outside of a tour operator’s control. Trips that involve flights are subject to the complexities of airline pricing. Some large tour companies have flight departments and contracts with airlines that provide them discounted fares, but most tour companies don’t have that pricing advantage. When comparing tour prices, it’s important to ask for details about what kind of flights, hotel transfers and incidental transportation are included and to make sure all of your travelers’ needs are considered.
Inclusions
The quality and quantity of meals, attractions and activities included in a tour dramatically impact its price. Some low-priced tours include only one or two meals a day and are more likely to feature buffets and other economy dining options; more expensive tours might include more meals at nicer restaurants. Attraction tickets, guided tours, interactive programs and other expenses can add to a trip’s price, too, so a tour full of included experiences will often cost more than tours with a lot of free time.
Timing
The timing of a trip can go a long way in determining its price. Many popular destinations have peak tourism seasons that correspond with favorable weather or family vacation schedules, and high demand drives prices up during those crowded seasons. Groups can often save money by traveling during shoulder season, just before or just after the main busy season. For international travel, exchange rates can also affect tour prices. The strength of the dollar has spurred some tour operators to lower their prices on international trips for 2016, so now is a good time for bargains on travel abroad.
Exclusivity
Some tour companies specialize in selling the same itineraries over and over or combining smaller groups into one busload for a single departure. Others operate only custom trips, which are built from the ground up for the needs of a specific group. The prefabricated, scheduled departures tend to be cheaper, as operators can get price breaks from vendors by guaranteeing certain volume at certain times. If your group enjoys exclusivity, or if you want a lot of special touches on your tour, custom trips might prove a better value, even though they’re likely to cost more.
