Summing up the single supplement scenario

In the April 2009 issue, ITN readers, including some tour operators, weighed in on the subject of “tour companies and single supplements.” A variety of opinions and explanations were expressed.

My objective in this article is to try to tie up what seemed to me to be a few loose ends and provide some clarification based on my many years in the tour industry. My general intention is to explain why the single supplement exists and is usually necessary. The issue of single supplements is anything but straightforward.

No free lunch

All travelers understand that tour companies exist to do business and make a profit.

Most tour companies try to operate, philosophically, under a general doctrine of fairness in which, with tour groups, they attempt to have their per-person profit margins equal, regardless of whether passengers are traveling as singles or doubles.

However, because hotels worldwide virtually never provide to tour operators rooms for single passengers at only half of the cost of the double rooms (the cost of a single room is generally 75% to 100% that of a double), a single supplement results.

Hotels sell rooms, not beds. A hotel’s actual cost, in most cases, is reduced very little if only one person is occupying the room. For example, statistically most couples traveling together use only one bed, the same as a single.

If a hotel charges a tour operator $100 for a room regardless of whether it is occupied by one person or two, the tour operator will charge a couple $50 per person and will charge a single person $50 plus an additional supplement of $50. If a hotel charges a tour operator $100 for a room occupied by two people and $80 if it’s occupied by one person, then the single supplement cost is $30 ($50 + $30 = $80).

This cost differential multiplied by the number of hotel nights on the trip totals the actual single supplement cost to the tour operator, so this is usually the amount passed on to the single traveler in the form of a single supplement.

Roommate matching

Reason dictates that it is not the responsibility of the tour company to find a roommate for a traveler who cannot secure his or her own roommate. Nevertheless, today many, if not most, tour operators assist prospective tour members by means of a roommate-matching service, which can have some variations depending on the companies.

With some companies, if a roommate match is requested but does not occur, the single is required to pay the single supplement under the doctrine of fairness referred to above.

One practice that is increasing among tour companies is to waive the single supplement if a single requests a roommate but then the company is unable to find a suitable match. This is done by companies that can afford to do so either through volume or sufficient markup.

A very few charge no single supplement of any kind, however. How can they do this? The answer is they mark up the tour price for doubles high enough to allow for this practice. In fact, it means that those traveling as doubles are subsidizing the singles. For singles, this is a great benefit, not an entitlement, but it is hard to make a case that it is fair to the majority who are traveling as doubles.

Make no mistake that tour companies build this consideration into their markups/profits. When the single requesting a match does not get one, that single receives a bonus of a room of his/her own at no extra cost.

Some tour companies, when approaching a tour departure date, will grant a discount to a single who requests a roommate or sometimes will waive the fee altogether to fill out the group or allow the affected person to travel if he/she could not or would not do so otherwise. This is a case of the tour operator being generous to the single traveler and perhaps practical at the same time.

In my opinion, however, it is improper and unfair, if not unethical, for a tour operator to offer this last-minute waiver or discount option unless it is offered to all singles on the departure who requested a roommate but would rather have a room to himself or herself.

What if you requested a roommate and were matched, thereby avoiding the single supplement, and then someone else later made the same request, was unmatched and ended up with a room to himself, a situation you would have greatly preferred, yourself? Would you feel that is fair? Are you being penalized for possibly signing up too early?

The tour operator has to be very careful with this practice to insure all singles are treated equally. There is definitely some abuse with this issue in the tour industry.

Bottom line

Virtually all tour companies want the business of single travelers, and they usually do everything possible to assist single travelers financially because it is good business to do so. But the facts clearly reveal that single travelers often are the beneficiaries of these efforts and rarely the victims in today’s travel marketplace.

Single travelers also should realize that the companies that do not offer this option often are smaller or are small-profit-margin operators that cannot afford to do so. Other companies just may not be prepared to raise the tour price for doubles, something which makes the tour more difficult to sell.

My advice is to appreciate those companies that can and do offer these options and not blame those that do not. The “woe is me” financial argument on the part of the single traveler objecting to paying single supplements rarely stands up to scrutiny “under the microscope.”