In Quito every travel agency and hotel offers 'cheap' tours to the Galápagos Islands, but are these really cheaper than booking them ahead in your home country?
I guess at least you have more options locally.
First off, it's never going to be 'cheap', unfortunately. There are a few reasons for this.
(*these prices correct as of November 2010)
If you fly, there's no way around the fixed fare of USD$420 to fly return from Quito or Guayaquil. Then there's the $100 National Park entrance fee. And another $10 for taxes. So we'll ignore all that and just call that the 'base', and focus on the rest being cheaper...
A lot seem to focus on the cruise you'll "need" to do. That's not always the case.
From this site:
It's worth noting that according to Wikitravel:
Now, once you're in Quito or Guayaquil, there are two sides to consider with tours. One - the travel agents will often claim the best tours are gone months in advance. Certainly some will be, but I've NEVER hard of a person disappointed with their tour, no matter when they booked it.
However, I have heard of some FANTASTIC deals bought on the ground in Quito. When staying at the Secret Garden Hostel in Quito, the Carpedm tour company downstairs was very closely linked with the hostel, offering free city tours and salsa lessons and the like. In addition, they were able to advise people about Galapagos options.
I heard of people getting final berths on 5-star boats for the equivalent of paying 2 days for 7, others getting discounted meals, and they were all booked in Quito or Guayaquil.
So in conclusion, it's hard to say for certain whether things are cheaper on the ground, but from anecdotal opinions, my experience, and the very reason tour companies exist in these cities, is that it is possible to beat prices when on the ground. And of course, this will flex with seasonal trends - more likely to get bargains in low season.