I'm not suggesting you take an escorted tour on a bus with 30 other people. You can do that, if you want to be led around to the most touristy places, and you're afraid of venturing out on your own. If that's how you like to travel, then by all means, but you won't have too much freedom to explore on your own. Many of these companies are going to take you to spots that give them a commission for bringing travelers there.
If you like to explore more independently and make your own schedule, I would advise buying a vacation package from a company that groups together airfare, hotel and rental car or train transportation. This allows you to focus on what you're going to see and do. Let's face it, you are not going to be spending all day in your hotel room. You are going to be out and about seeing the sights, eating in cafes and wandering museums and shops.
Of course, you want a clean place to sleep in a good neighborhood, but you don't really need to waste your time researching where those hotels are. The same goes for the airfare. In reality, you are probably not going to find the best deals by shopping around on your own. Tour wholesalers buy in bulk, and they have better negotiated rates with airlines and hotels than you could ever find. In most cases, you are not going to beat their deals.
If you are going to Europe to visit family or have been to the country before, you might want a more relaxed visit. If you want to spend more time in your hotel and want to be in a particular area, you may be better off booking everything independently. This is particularly true if you are using your airline mileage for free flights. But if you're paying your way and you want to see a particular place at an affordable price, a tour wholesaler or vacation packager is definitely the way to go.
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