Written by: Jonathan Lee
I recently met Maria, an avid Adventure Traveler, who had just returned from an adrenaline fueled 10-day adventure trip to Belize. Belize is on my list of top places to travel and I was very interested in learning more about her adventure and how she planned her trip. Maria booked the Belize Multisport Package through REI Adventures. For those not familiar with REI, it’s a network of over 100 sporting goods stores throughout the U.S. with an excellent reputation for selling outdoor gear and sports equipment. The company also offers organized trips through its travel company, REI Adventures. Maria booked her trip through REI because she trusted its brand name, and its website looked amazing with vivid photos, lots of traveler reviews and a high quality edited video about the trip. After she booked the tour through REI she discovered that it was actually another company, Island Expeditions, which operated the trip. REI marketed the trip on their website but outsourced the trip operations to Island Expeditions, a Canadian travel company.
Once Marina arrived in Belize she observed that while Island Expeditions ran the tour operations, only one guide from the company actually joined the group, all the other guides for the excursions were locals from Belize. This made perfect sense, as the locals know their country best. During her adventures, Maria observed that each of the excursions as part of her package which included sea kayaking, snorkeling, and caving could also have been booked locally for around $100/day.
The trip booked through REI cost $2500 for a 10-day trek averaging out to around $250/day. Maria paid over a 150% premium booking with REI instead of directly with a local tour operator.
Maria’s experience is not unique. The travel activities / experiences market is full of intermediaries and there are often multiple handoffs between the company a traveler books their adventure with and the tour operator that is ultimately running the tour. With some research, Maria likely could have found local tour operators in Belize who are at the end of the travel supply chain to book her trip with and save over $1000.
This is why you should always book your tours with a local tour operator.
- Significant monetary savings – Save up to 150%+ to what it would cost if you booked through a U.S. based company
- Transparency – Know who you are going with and which company is ultimately taking you on your tour. The U.S. tour operators will subcontract your tour out to a local agency but often is not transparent about who the local company is. In many cases, you don’t find out until you arrive.
- Support the local economy – Because the traditional travel market is extremely fragmented, it’s extremely difficult for local tour operators to market themselves internationally and they rely on wholesales or agencies which results in the tour operators cutting their prices to rock bottom levels to be able to compete for the business. This does not benefit them or the end traveler since a significant portion of the markup is captured by the U.S. based travel company. By booking directly with a local tour company you allow them to charge a reasonable price that is still significantly lower than what you would pay. In the end it’s a win-win situation for both the traveler and the local tour company.
Why would anyone not book their tours locally?
- Requires time and research – Since these companies are local to their country, they are located thousands of miles away and often have limited internet presence. Travelers will typically spend hours researching online and reading through reviews on sites such as Tripadvisor to find reputable tour operators.
- Communication – Getting all your questions answered before booking a trip can sometimes be challenging as a result of differing time zones and long distance costs if you want to talk with someone locally on the phone. Language can also be a large barrier to communication depending on where you are traveling.
- Payment – Depending on the sophistication of the banking infrastructure in your travel destination it can be difficult and expensive to pay the local tour operator for their services. For higher priced tours, companies often ask that you wire transfer them money which incur wire transfer fees. Alternatively, some companies accept cash and ask that you pay them in cash when you arrive. Some companies do allow credit card payments but will usually charge a fee of 3-7%.
The benefits of booking locally outweigh the disadvantages. There are always exceptions of course. There are a few instances when you should not book with a local tour operator. Travelers going to extremely new markets with un-tested and un-regulated tour operators such as Burma would greatly benefit from booking their tours with a developed country tour operator for security and peace of mind. In almost all other cases it always makes more sense to book with a local tour operator directly.