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Why International Travel Costs Vary

Many travelers have discovered, sometimes to their chagrin, that it's possible to sit next to people on flights (or cruise tables) and learn that they're paying more, or less, for the same flight/sailing than their seatmates. With airlines, of course, there are so many different fares and discounts that these disclosures, while unsettling, are no longer all that surprising.

But when it comes to tour packages in Europe, American travelers who compare costs for the same basic land arrangements for such elements as hotels and meals with nationals from other countries may still experience surprises.

The differences in costs are more than those created by the value of the dollar against the foreign currencies, though currency fluctuations also have an impact on pricing. Basically, such differences in prices per market are certainly discriminatory -- a cry that has often been made -- but not necessarily unfair. Prices are based on the cost of marketing the travel product in specific countries. As these assorted marketing/distribution costs differ from country to country, an American traveler could pay more or less for the same land package (irrespective of air fare getting to and from the destination) than travelers from other nations.

To illustrate, prices can be higher in the U.S. than elsewhere to support the greater cost of marketing here, including the presence of a local sales office. The overhead for this office and its staff is covered in prices. Another factor may be the amount of advertising conducted in a specific market for a specific product. In some markets, the product may be better known and require less promotion.

The buying power in a particular market is another aspect. Rates may be higher in a country where the consumer has more money to spend on travel. Companies may well offer lower rates in some markets to balance the weakness of the local currency against the dollar. It's quite possible, in this vein, that a U.S. hotel room could cost less if booked in Europe, ostensibly for an European traveler, than the same room would cost booked for a traveler in the U.S.

Other marketing considerations could include the cost of offering the public a toll free telephone number for ease of reservations, and acceptance of credit cards (which means extra costs for the company). In the U.S. a company may get many of its bookings through travel agents, which means paying agents commissions on those bookings. In other countries, consumers may book directly more often, not using travel agents to the same extent. Similarly, the quality and number of brochures/sales pieces needed to promote the product to consumers and to the local travel industry can vary greatly from country to country. In the U.S. the number of sales pieces, and their slickness (quality of paper, photos, etc.), and costs of distribution is higher than in many other nations.

Another possible factor is what marketing season is involved, such as high, low or shoulder. Both the dates and prices for these sales periods can differ around the world for the same product.

Generally, the costs are by market and not by nationality. An American traveler can often get the local rate in another market. But some products, often special transportation passes, may not be available to locals and only to foreigners who have to show their passports/air tickets, etc.

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