Are travel waste charges about to go away?
Junk fees are those pesky “chicks” like mandatory resort fees. Hotels quietly add them to your bill after an initial price to cover items such as pool towels and “free” phone calls. Airline seat assignment fees are aimed at nervous dads like me who feel they have to pay an extra $50 per seat so they don’t get separated from their kids on a flight.
You could be forgiven for thinking these pesky payments were headed for the emergency exit if you watched the State of the Union address earlier this month. President Joe Biden promised to “take on” unwanted fees, such as hotel resort fees and family seating fees.
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“I know how unfair it feels when a company overcharges you and bails you out,” he said. “Not any more.”
“There’s no question that government has a role to play,” said Bill McGee, a senior fellow for aviation and travel at the American Economic Freedom Project.
But will waste charges end? To answer that question, you need to understand how important these fees are to the travel industry and how previous efforts to ban junk fares have fared. Commuters are ready for a change – I know I am – but is political rhetoric all it takes to get the job done?
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What would happen if waste charges disappeared?
Garbage fees are the lifeblood of the travel industry. Annual revenue from airline ancillary fees rose 56% last year to $103 billion worldwide by 2021. (Many ancillary fees are considered junk fees.) Airlines put these surcharges on ticket purchases for covered things like seat assignment or a carry-on bag. These are items that were included in your ticket price.
If airlines drop the fees, it would cut deeply into their profits.
What about hotel resort fees?
In 2018, US hotels collected $3 billion in these fees. They account for about 3% of revenue among hotels that charge them. These charges were also included in the price of a room.
If hotels cut fees, it would also cut into their profits.
Bottom line: A ban on garbage charges would hit the industry hard. Some companies that have built their entire business model around fares, such as “ultra” low-cost airlines, may find it difficult to survive.
The travel industry will fight this
To get an idea of what might happen next, you have to go back to the previous junk tariff fights.
“Hotels lie about their room rates when they don’t include surcharges,” said Charlie Leocha, president of Travelers United, which has fought resort fees for years. (As a crossover consumer journalist, I co-founded Travelers United a decade ago.)
There have been lawsuits by guests against the hotels and an action by a state attorney general.
The hotels hired the best lawyers to fight back. Surprisingly, no law specifically prohibits these charges from being added to a hotel bill. And in any case, the hotels won.
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The action of a state attorney general was anticlimactic. In late 2021, Pennsylvania’s attorney general announced a settlement with Marriott International over resort fees. Marriott agreed to “prominently disclose” the total price of a hotel stay, including the room charge and all other mandatory charges, on the front page of its reservation website.
The hotel chain has negotiated several extensions. At the time of this writing, it has yet to fully honor the agreement.
I would call that a hollow victory.
Travelers are ready for a change
Travelers are done with junk fares.
“There’s a reason they’re called junk fees,” said Barry Maher, a frequent traveler and professional speaker. “And I’d like to see the administration outlaw them. Especially when they’re either undetected or detected in ways designed to make sure you don’t notice.”
Guests aren’t just angry with travel companies for charging these extras. They are offended.
“Litter fees are so annoying because they are ultimately based on fraud,” said Thomas Plante, who teaches psychology at Santa Clara University. “If they want to reveal what the fees will be up front or make it clear what’s included in their overall price, that’s fine. But to take you in a price direction only to be surprised when the price real to find out later is not right. It’s an ethical issue, in my opinion.”
The story continues below.
Garbage charges won’t die until we change the way we think
Waste charges are sliding. Even if Washington passes new laws banning certain fees, the travel industry will renew its push against the rule.
Gerri Heather wrote to me from Maui this week, where she had been trying to reserve a poolside cabana at her resort. The hotel already had a high rate of $200 per day, but this year decided to introduce a “convenience” fee of $27 per day.
“The fee covers tips to cabana staff for cabana service, which is pretty limited at best, and the online reservation fee,” said Heather, a retired nurse from Mesa, Ariz.
Mandatory tips? A “convenience” fee for online booking? Come on. Why not raise the cost of a cabana to $227 a day?
The answer: Because no one in their right mind would pay $227 for a cabana. But if you lower the price, you might get some buyers.
If travelers stop shopping for travel based on just one criterion—a low price—and consider the total cost of a flight or resort stay, it could change the way travel is priced. But until they do, the fees will continue. Because they work.
Prediction: Waste charges will change if…
It will be difficult to get rid of all the junk fees. Even if the Biden administration ends hotel resort fees and some seat assignment fees, travel companies will find a way to make up for lost revenue.
Peter Vlitas, executive vice president of partner relations for Internova Travel Group, fears the legislation would force airlines and hotels to raise fares. “If they stopped the fees, they would shift the cost into the price of the ticket or the room,” he said.
Like an old car you find in a junkyard, the travel industry will probably undertake a careful restoration of its fares, bringing them into line with the law, but angering their customers even more.
To eliminate all waste charges, travelers must change their behavior to consider the total price of their trip. And we would need a more comprehensive law – one that requires that the price you quote is the price you pay. This is something the current administration has yet to propose.
I doubt they ever will.
Christopher Elliott is an author, consumer advocate and journalist. He founded Elliott Advocacy, a nonprofit organization that helps solve consumer problems. It publishes Elliott Confidential, a travel newsletter, and Elliott Report, a customer service news site. If you need help with a consumer issue, you can contact him here or email him at email@example.com.
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