I remain unconvinced and still think the tours are very overpriced. Below I insert the "London for 7 Days" itinerary from the Rick Steves website. Before that I will give a detailed reasoning for my belief. I will base my calculations on 28 tour participants, all sharing rooms.

Having spent many years in hotels I have no doubt that these groups get preferred pricing on hotel rooms, probably not spending more than $250 per night inclusive of VAT. Since the pricing is double, I'm going to estimate 14 rooms. 14 rooms x 6 nights = 84 room nights x $250 = $21,000.

Also, I am willing to wager that they purchase London Passes for all tour group members that will get them admission into the Tower of London, Windsor Castle, Westminster Abbey, St. Pauls, etc. These go for 68 quid each for the guy on the street, and I have no idea if they get a discount on them (I would guess they would but will not assume) so let's estimate $100 x 28 tourists = $2800.

Breakfast is included each day so let's say $500 per day for that.
$500 x 6 days - $3000

Transport pass including trip to Windsor: $100 per person (estimated) x 28 people = $2800
The itinerary:

Day 1: Arrive in London
Look for a note posted in the hotel lobby telling you where and when to meet this afternoon. We'll get together around 3 p.m. to get acquainted, before setting off for an orientation walk and dinner together. Walking: light.
Dinner: $35 per person x 28 = ~$1000

Day 2: Westminster Abbey and the Tower
This morning we'll hop a boat and cruise past monuments, skyscrapers, and cathedrals on our way to the Tower of London, the city's historic "tower of power." We'll join a Yeoman Warder "Beefeater" for an entertaining tour and a peek at the impressive Crown Jewels. In the afternoon, we'll tour Britain's finest church, Westminster Abbey. Then we'll finish the day with a traditional fish-and-chips dinner. Walking: strenuous.
Dinner: $25 per person x 28 = $700

Day 3: Whitehall and the National Gallery
We'll take a historic stroll through the Westminster/Whitehall area, including stops to visit the Churchill Museum and Cabinet War Rooms and gaze at Big Ben. This afternoon, we'll dodge pigeons in Trafalgar Square and marvel at the masterpieces in the National Gallery before dispersing in the late afternoon for free time. This would be a perfect evening for the theater (book something in advance from the Colonies or pick up a ticket in London). Walking: moderate.
Everything this day is covered by the London Pass or is free.

Day 4: St. Paul's Cathedral and the City
This morning we will take a tour of St. Paul's Cathedral, the symbol of London and England's national church. Then we'll explore The City, the oldest part of London and now its financial heart. The afternoon is free for you to enjoy one of London's many museums (perhaps the Victoria & Albert Museum) or wander through one of its many parks. This is another good night for the theater. Walking: strenuous.
Everything this day is covered by the London Pass or is free.

Day 5: Historic Windsor Castle
This morning we'll hop on a train and head out of town to Windsor Castle, the largest and oldest occupied castle in the world. We'll spend the morning touring the Royal Family's castle and grounds. After free time in the quaint town of Windsor, the remainder of the afternoon is yours for sightseeing back in London. Walking: strenuous.
Train to Windor included in travel pass

Day 6: The British Museum and Library
This morning we'll dive into the treasures of the British Library, including the Magna Carta, Gutenberg's Bible — even Beatles lyrics! Then we're off to the British Museum, the chronicle of Western Civilization. The rest of the afternoon is free for more museums, Covent Garden, or other sightseeing. Tonight we'll meet for our "last supper" and raise a toast to London. Walking: strenuous.
Dinner: $45 per person x 28 = $1260

Day 7: Tour Over After Breakfast
Following breakfast, we'll say our final farewells and head for home or further adventures in Britain or on the Continent.

Adding up all of these expenses I come to a total of roughly $33,000.
The total paid by the travelers, at $1995 each, is $55,860.
That leaves approximately $22,860
The tour guide: I am going to be generous and assume he makes $2000 per tour, so that's $20,860 profit.

I will not go into overhead, administrative expenses, etc but I would bet again that they are a darn sight short of $20,800 per WEEK per TOUR.

Discounts for multiple tours? If I took a tour, got wise to the real costs and then did the math you'd have to give me a discount too if you wanted me to book again! Cancellation insurance? With a profit margin that large you can afford someone to drop off and they'll come back since you were so generous in letting them cancel before.

I have never taken a Rick Steves tour. I don't know anyone who has. I am sure they give great peace of mind to those who take them, and they are happy as larks and feel it's good value. Personally, I still think they're being ripped off.

Just MO, though.