Chatting with people from other countries sharing tours with you can be revealing.
One of the perennial surprises befalling American travelers abroad is the belated discovery, often through talking with other tour participants, that they may be paying more for their land arrangements than their foreign friends.
Moreover, travelers believe that if they bought these packages in the host country, or even in other nations, they might be able to buy them for less than the price in the United States.
Until last year, Club Med, which has locations around the world, provided a good example of situations where American travelers might have been able to get a lower local rate in a foreign country.
No more, according to Jacques Ganin, president of the U.S. sales division of Club Med.
"Normally, as a result of a policy begun in 1986, you should now be booked at the U.S. rate even if you make your reservation in a foreign country," Ganin says. "You should, for example, pay the same for a week at Ixtapa in Mexico whether you book in Los Angeles or Mexico City."
Exceptions to Rule
Ganin said, however, that exceptions to this Club Med rule can be found. "There are always people who manage to get around this policy, but the local rate is not supposed to be available any longer for travelers."
The only way that Club Med enforces this policy is by checking reservations, he said.
"The reservation made by a travel agent in Mexico for an American would go through our sales office in Mexico City," Ganin says, "and the agent would have to provide the name and address of the traveler.
"The address would indicate that the traveler was American, unless the travel agent is lying, and the traveler would have to pay the U.S. rate or we would refuse the booking."
An American buying a Club Med vacation in Tijuana for other parts of the world would still have to pay in dollars, not pesos, Ganin says. "You could pay for Ixtapa in pesos, but not in pesos for locations outside Mexico."
While the same may not be true of all comparable situations, two questions come to mind: Are such differentials in pricing between countries and markets reasonable? And how does one go about booking at possibly lower rates in foreign countries?
To start, such pricing by markets is discriminatory but there are valid reasons to support it. You have to take into account the costs of marketing in different countries, which can vary greatly, as well as the value of the dollar in relation to other currencies.
Prices, for example, often are higher in the United States than elsewhere to support the greater cost of marketing here. And marketing takes in a good deal of territory, including local sales offices, with the overhead for these outlets and salaries for the staffs reflected in the product prices.
The amount of advertising and promotion (brochures and other literature) allocated to a specific market is another consideration. The company and its products may be better known in some countries and need less promotion. This is obviously the situation for Club Med in France, where the company has its headquarters, though pricing in the Western Hemisphere is set by the company's New York-based subsidiary.
How much buying power exists in a country is another pricing element. If travelers have more discretionary money to spend, rates may be higher to reflect this affluence. On the other hand, companies may extend lower rates in some markets to balance any weakness in relation to the dollar.
In this vein, it's possible that a U.S. hotel room could cost less (or more, depending on the dollar's strength) in Europe, ostensibly for a European traveler, than the same room would cost if booked for a traveler in the United States. Local market conditions prevail.
The ease with which one can make reservations is a factor. Toll-free telephone numbers may be available in one market and not another. Acceptance of credit cards, which means extra costs for the company, also affects prices.
Club Med and other companies receive many of their bookings through travel agents in the United States. This means paying commissions to these agents. In other nations, travelers may book directly more often, thus saving money.
Since the rates may be different in various countries for some programs, it is worthwhile finding out if you can take advantage of a local price.
One method is by simply waiting until you are in the country. You run the risk of not having a reservation and finding that no space is available. Moreover, you also have to allocate time for this process, which can necessitate an unplanned overnight stay.
Another point to check out is whether you can match or better any add-on air fare (to the land arrangements) that the selling organization may offer.