Beware Surcharges!

The Seattle Times reported that tour companies are adding surcharges to the cost of their European offers. Well, not us!

Why? The Euro has increased so much in value against the US dollar that American customers are getting dinged to cover this differential. We saw the potential for this problem several years ago and changed our pricing to Euros. Not to mention that it helps all of our international clients use a common currency and translate into their own local currency. Of course, the cost of your trip will change daily as the value of the Euro changes relative to every world currency. It goes up and it goes down! How many of the dollar priced tour operators give a reduction when the Euro loses value? Take a wild guess!!

The problem of trying to imagine what the future costs of the Euro will be are many. The safest bet a tour company can make is to artificially factor currency costs. When trips are priced in fall for the next year, and brochures have to be printed with a fixed tour price, one can only guess at how the currency can change. If in September (or even earlier) the value of the dollar to Euro is 1.35 it could easily be 1.5 by March or April of the next year - as we have seen this year. That is unprecented but it is also the modern age of world currency markets and the daily roller coaster it has become. What is a tour operator to do? If they didn't guess at 1.5 or higher, they are cutting into their profit. Voila - the surcharge! Now, if by July rates are down around 1.4 and the guess was 1.5 will there be any cutting - nope! Because by September again it could be 1.5.

We eliminated all this with tour prices in the same currency as our cost basis. Profit is calculated and preserved. Our clients get the currency valuation on the day they pay which is in the market on that day. We don't have to make money or lose money on future bets for currency which incidentally causes inflated pricing for consumers in some cases.

L