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Is a group tour the best solution in this situation?

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This July, eight of us (ages 17-77) plan to travel for 10 days in Portugal and/or Spain. The group ranges from adventure seekers to sedate seniors and from foodies to vegetarians. We're a multi-generational group who has travelled successfully together before within the US and in Latin America. However, this European adventure seems too challenging to tackle, especially since we'd like to stick to a budget.

I've been researching all sorts of options from River Cruises (too pricey at about $4,000 per person and potentially too low-key for the active set) to looking at apartments and villas in in various cities and cobbling together day tours and guides/drivers.

However, it seems to me that I should just stop fighting it and look into a moderate tour. I don't like the idea of being constantly shifted from one hotel to another and of not being able to absorb atmosphere and just meander. Sigh

What would you do?

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