China isn’t the cheapest country in the world, but packaged tours there are astonishing bargains

If you are looking for anything beyond an absolute backpacking trip, and you are a value-conscious traveler, you should really subscribe to Arthur Frommer’s blog. Not only is he practically the king of value-minded vacations (for Americans), but his is one of the very few “deals” blogs that is written for the traveler rather than based on potential commissions from clicks and bookings.

His blog, especially when paired with the weekly travel podcast that he conducts along with his daughter Pauline, really zeros in on the hot trends and amazing deals around the world. Last week he reported about two large tour companies that are in a cut-throat competition to sell their packaged tours to China, and the winner is anyone who’s considering taking one this coming winter.

The deals on offer

On this site I like to discuss the economics of world travel, partly as a way to find the best destinations with exchange-rates in mind, and there are some interesting aspects to that which I will mention below. But first, here are the current deals Mr. Frommer wrote about:

China Spree – 8 days (6 nights) Beijing air/land package starting at US$799 (plus $79 in taxes), including round-trip airfare from San Francisco, 6 nights in 4-star hotels in Beijing, and a number of group tours (Great Wall, Forbidden City, etc). There are many more combinations and possibilities, but this is the cheapest of all of them.

China Focus – 8 days (6 nights) starting at US$875 including taxes for round-trip airfare from San Francisco, 6 nights in 5-star hotels in Beijing, guided group tours, breakfast every day and many lunches included.

In both cases, there is a US$170 fee for obtaining a Chinese visa, but that’s true no matter how you visit.

How good a deal is this?

  • Cheapest November round-trip flight SFO to Beijing = US$905 (or US$969 nonstop)
  • 4-star Beijing hotel room in November = US$50 per room per night and up
  • 5-star Beijing hotel room in November = US$70 per room per night and up

Once you add in the meals and the tours and such, it would honestly cost you about double to get all the same things on your own. Starting with just the cost of airfare, the entire packages are slightly cheaper than individual flights, so even if you booked into cheaper hotels you’d still be paying much more than these deals.

The economics of travel to Asia

One thing that Arthur Frommer mentions frequently, including in this article is that, “As long as China maintains its current, unrealistic exchange rate for its currency, China will remain the world’s least expensive nation to visit.” This is only partly true at best, and quite misleading at worst.

If one is only considering a package tour from the United States there are actually a few Latin American countries that are cheaper, mostly due to shorter flights. These China packages are amazing value, but any other kind of travel to China isn’t nearly as cheap.

The notion that the Chinese currency is dramatically undervalued is also very debatable. When looking for the cheapest desinations in Asia, our Backpacker Index list actually has Beijing and Shanghai among the most expensive cities in the region. The cheapest city on our list is Hanoi, Vietnam, which has costs of similar things at far less than half the price of Beijing. If the Chinese Yuan is undervalued, then the currencies of Thailand, Vietnam, Laos, Cambodia and many others are undervalued as well.

How does China have these amazing deals?

These package tour prices reach jaw-dropping lows during winters simply due to the volume and competition, which are the two things that seem to make the entire Chinese economy such a force. If one small travel agency can sell 100 or 200 spots per day on these trips then they can cut great deals on airlines and hotels to get wholesale prices on everything. And the fact that there are two major companies doing this means that consumers win (as long as the companies don’t collude).

On the other hand, an 8-day tour of Vietnam that includes hotels, transportation, meals, and daily tours will start at around US$799 NOT including your flight to Vietnam. It’s definitely a cheaper country once you are there, but if an agency can only fill one bus per week with travelers then the deals won’t be nearly as good.

And finally, I recently discussed the fact that the cheapest country in the world is India, which I stand by. Once you get outside of the larger cities there you’ll not only be happier, but the prices of almost everything tend to be shockingly low. A private hotel room for US$2 is possible, and spending as little as US$10 per night can get you quite a nice room in many cities there. Meals and transportation are also extremely cheap, though India’s position on the other side of the globe from the Americas means a flight may cost quite a bit, so it’s best suited to longer, slower visits.

Photo by kelvin.schafli on Flickr

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  1. Roy says:

    China was cheap in the past until RMB appreciation started a few years ago. But it is still a nice place for a vacation compared to India and in terms of comfort. The offer from China Focus is really a deal in my eyes although it’s a not a nice time to visit since it will be cold thn.