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Be Sure to Figure ‘Travel Overhead’

Over the years, I’ve received quite a few inquiries that involve the question of what I call “travel overhead.” That’s the cost of just being in your destination area. It has arisen several times with specific regard to cutting the costs of visiting New York City by staying in the suburbs:

“Why don’t you recommend staying in New Jersey or on Long Island for visiting New York? You can find much lower hotel rates there.”

The short answer to that question is “rather than fight the hassle of commuting, most travelers would probably prefer a cheaper hotel right in the City.” But for some instances the issue is even broader.

This report was prompted by a press release from the folks at Marriott, promoting deals at hotels near Newark Airport that feature “Escape by Train” packages combining “great” room rates with one weekday or two weekend round-trip train tickets from [[Newark Liberty Airport – EWR | Newark Airport]] to Manhattan plus free shuttle to and from the airport. But you can often find similar trade-offs at major cities around the world.

Travel Overhead Defined

“Travel overhead” means the daily or hourly out-of-pocket cost of just being in a destination. A lot of travelers don’t seem to realize how much they pay just to be somewhere other than home. Here are two examples:

  • Trip 1: Two people visiting New York from San Antonio for four days, three nights. Let’s say the airfare is $300 each, they pay $250 a night (including taxes and extras) for a hotel room, and they spend $100 a day more for food than they would at home. The total cost is $1,750. Out of the four-day three-night period, they have 44 total, useful sightseeing/activity hours each. Their overhead cost of just being in New York is therefore just a tad under $20 an hour, each, or $40 an hour for the couple.
  • Trip 2: Two people visiting London from Chicago for a week, seven days, seven nights (plus one night on the overnight flight to London). Let’s say the airfare is $900 each (typical shoulder season), they pay $250 a night for a hotel room, and spend $100 a day more for food then they’d spend at home. The total cost is $4,250. On a seven-day stay, they each have 116 useful hours. Their overhead cost of just being in London is about $18 an hour each.

Of course, that rate can vary widely depending on traveling lifestyle, location, length of trip, and such. I’ve seen calculations as low as $10 an hour or as high as $100 an hour. But whatever the level, the basic idea is the same.

Suburban Room Rates Can Be Good

Certainly room rates in suburban locations can be a lot less than rates in a big city center—not just New York, but just about any big city. Rates at the Newark Marriott start at $132 a night, and, for a room of equal quality and features, you’d probably pay at least $250 a night in Manhattan and more likely $300. You find the same sort of deals a few miles out on Long Island or near the Meadowlands complex.

You see that same pattern in many other big cities, too. I’ve found it in the Boston and Chicago areas, for example, and also in London and Paris. Moreover, suburban hotels tend to be more modern and have larger rooms than those in city centers. There’s no question that your dollars (or euros, pounds, whatever) usually go a lot further outside the center of many big cities.

But the Schlepping …

The big problem with the “stay in the suburbs” pattern is not the cost of public transportation; it’s in the travel overhead. You don’t just face the time and cost of commuting to the center, but once you get to a downtown station, you still have to get to the attraction, restaurant, or museum you really want to see. So the time and cost of the commute are in addition to whatever local transportation you’d normally use.

In the case of the Newark promotion, even with a “free” train ticket, the trip from hotel to airport to Penn Station (and reverse) probably takes up an hour each way. The travel overhead of $40 an hour, per couple, means that the total $80 round-trip overhead charge certainly narrows the suburban advantage. Absent the rail ticket promotion, the suburban stay would add another $60 per round-trip.

Another disadvantage: Staying in the suburbs means you must either remain in town the entire day and into evening—with no chance to go back to your room to rest or take it easy for an hour or two between, say, the museum and going to dinner—or making two or more suburban round-trips.

Many years ago, my wife and I tested the suburban stay idea in London. We found a good rate at a nice hotel in Richmond, just outside London, with frequent Underground service. Richmond had the added advantage of enough good restaurants that we didn’t have to stay in central London all day, through dinner, or make a separate round-trip to the center. Our verdict: never again. We spent far too much time riding the Underground to justify the difference in hotel rates.

Not Just Suburban Accommodations

The idea of travel overhead enters into decisions other than where to stay. On a trip to London a few years ago, a friend told me proudly that he had found a bank where the exchange rate gave an extra 2 pounds for a $200 travelers check, compared with a bank near his hotel. But to get that extra 2 pounds (then worth about $2.80), he made a 30-minute round-trip on a bus. With a travel overhead of some $20 an hour, that trek to a distant bank wasn’t a very good use of his time.

Travel overhead also applies in some decisions about whether to take public transportation or a cab. Often, a cab trip that cuts a half hour off public transit time is well worth the extra cost. Conversely, during rush hour, coping with the public transportation crunch may be a much better choice than being gridlocked in a taxi, no matter how comfortable.

I don’t suggest that you subject every little decision to a cost analysis. But I do suggest you include the travel overhead whenever you face a significant time versus money choice in your travels.

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