It's about the fact that they don't have to plan a lesson. You tell them what points you want to cover or what you want them to explain or what roleplays you want to do (what to say at a restaurant, at a ticket office, etc), or whatever, and the two of you just "play it by ear". They aren't a good way of learning a language but they're a good way of revising or practicing it. They're useful if you just need some quick revision before an exam, or just before you leave for the country whose language you're learning.
It doesn't take any time for the teacher to prepare for an informal lesson, therefore it (usually) costs less.