Fee Fight or Travel fees, those annoying, purposeless and freely pernicious add-ons for services normally wrapped into the booking process, may be close to getting ban as common practice but the new administration could set those protections back – way back.
Fee Fight and Fee Fight
The past decade has witnessed a significant surge in the complexity of travel fees employed by airlines, hotels, and vacation rentals to boost their revenue. However, weary travelers and their representatives in politics are now voicing their discontent. Lauren Wolfe, counsel at Travelers United and founder of KillResortFees.com, a traveler advocacy group, emphasizes that consumers have long been frustrated with the deceptive pricing tactics known as drip pricing. This practice involves adding fees throughout the checkout process rather than disclosing them upfront.
The proposed Junk Fee Prevention Act by the Biden administration aims still to address airline seat selection and resort fees. While it still needs to pass through a divided Congress the otherwise bipartisan opposition to junk fees makes it a unique issue that could garner support. A bi-partisan bill called The Hotel Fees Transparency Act (introduced by Senators Amy Klobuchar – D-Minn. and Jerry Moran – R-Kan.) and designed to achieve pricing transparency, passed the Senate Committee on Commerce, Science, & Transportation in July.
Travel Fee Purge Faces Uphill Battle in Next Congress
The bill of Fee Fight is comparable to a U.S. House of Representatives item passed earlier this year, the No Hidden FEES Act. It now awaits a full Senate vote, which would bring it one step closer to becoming law and require hotels, short-term rentals, and online travel purveyors to display the total price, including all mandatory fees, upfront.
“In an unexpected twist, the American Hotel & Lodging Association (AHLA) has thrown its weight behind the bill. The hotel lobby group had opposed legislation around travel fees or “junk fees” previously, now preferring transparency throughout the booking process.
Wolfe highlights that it is politicians who receive financial support from the hotel lobby that defend these fees, indicating that change may only come through government intervention. She notes the hotel industry is unlikely to alter its fee structure voluntarily and may require Congress to enforce new regulations. Airlines, on the other hand, have more federal-level regulation and could face new rules from the Biden administration. However, these rules have not been implemented yet.
Static of Travel Fee Purge
In a recent announcement, the Biden-Harris Administration introduced a final rule aimed at protecting airline passengers from unexpected fees when purchasing a ticket. The rule mandates that airlines and ticket agents disclose upfront the fees associated with checked bags, carry-on bags, and reservation changes or cancellations. This measure is expected to save consumers over $500 million annually by eliminating hidden airline fees.
Outgoing Transportation Secretary, Pete Buttigieg, emphasizes that airlines should compete on service and not on surprise fees. The Department of Transportation’s (DOT) new rule aims to hold airlines accountable and provide transparency to customers.
The question now arises: what changes lie ahead for these fees, and how will they impact travelers? To understand the current scenario, it is essential to examine how the industry arrived at this point. The prevalence of the “à la carte” model, where low initial prices are accompanied by additional charges, became commonplace with the rise of internet search tools. Travelers, in search of the cheapest options, gravitated towards budget airlines like Spirit and Frontier, which offered low base fares with add-on fees. Traditional airlines initially ignored this threat, but eventually had to compete with the low-cost carriers.
Why Fee Fight?
According to a report by IdeaWorksCompany, ancillary revenue from fees and other add-ons increased from 6% of total global airline revenue in 2013 to 15% in 2022. A similar trend emerged in the hotel industry, where resort and amenity fees, once confined to popular vacation destinations like Orlando and Las Vegas, have now spread to locations with fewer resorts. Shockingly, even upscale hotels like Marriott in Boston have an 85% chance of charging a resort fee, as revealed by Wolfe’s data. She further notes her surprise when a recent hotel stay in Tulsa did not include such a fee.
Responding to the growing discontent, the industry has made some preemptive moves in the face of potential reforms. Airbnb, known for its criticized cleaning fees, now provides the option to display full prices, including taxes and fees, in search results. Airlines have also begun easing seat selection fees, which have been a source of confusion and expense for travelers, particularly families. United Airlines recently introduced features allowing children under 12 to sit next to an adult without extra charges. Frontier Airlines, a low-cost carrier, followed suit by launching a similar feature for children under 14.
Extra fees have become a significant revenue stream for airlines, with revenue from baggage fees alone increasing by over 30% between 2018 and 2022, according to DOT’s Bureau of Transportation Statistics. The complexity of these fees has only added to the confusion for passengers, necessitating action by the department.
How To Choose?
The final rule seeks to create a more competitive airline market by ensuring that consumers have access to clear and accurate information about the true costs of air travel. In addition to disclosing critical extra fees upfront, airlines and ticket agents must explain their baggage, change, and cancellation policies before ticket purchase. The rule also requires airlines to share fee information with relevant companies, ensuring transparency across various platforms.
While the Biden-Harris Administration’s record on consumer protection is commendable, with significant fines imposed on airlines and the return of billions of dollars to passengers, the ultimate impact of the recent rule remains to be seen. However, it represents a step towards greater transparency and fairness for travelers.
As the travel industry faces scrutiny over hidden fees, the demand for transparency and accountability grows stronger. Travelers and their representatives are pushing for change, and it remains to be seen how the industry will respond. In the meantime, consumers can do more than simple write checks every time a travel company demands them.
Standing up to Fee Fight
Here are some ways to toss the travel fees that do not require an act of Congress, according to Elliott Advocacy, a non-profit consumer help site for travelers.
Avoid luggage fees
Pack like a minimalist.This year, with almost every major U.S. airline jacking up their checked luggage fees, the response from passengers was predictable. “I’m packing minimally and efficiently,” says Daniel Rivera, who runs a property management company in East Rutherford, N.J. “I put everything in a single bag that I can stow under the seat in front of me.”
Skip the seat selection fees
Kevin Mercier, a project manager for an auto manufacturer in Paris, says he’s taken “extreme” measures to avoid seat selection fees. Not paying them means he ends up in a middle seat, but he’s fine with that. “I was willing to endure the cramped conditions and lack of privacy because the cost of selecting a preferred seat was substantial,” says Mercier.
Avoiding Hotel Resort Fees
Book somewhere else, if you must. Hotel resort fees are mandatory fees added to your hotel bill after the hotel quotes you a room rate, and sometimes much later. Christian Strange, an insurance agent from Virginia Beach, Va., says he won’t darken the door of a hotel that charges a “gotcha” resort fee. On a recent trip to Miami, he skipped the large chain hotel with a resort fee and stayed at a boutique hotel a few blocks from the beach. “The location still allowed me to enjoy the area — but at a fraction of the cost,” he says. He’s not alone. I hear from travelers all the time who say they’ll never stay at a hotel with a resort fee.
These strategies reflect a broader shift in traveler behavior, says Ramzy Ladah, an attorney and frequent air traveler from Las Vegas.
“People are fed up with being nickel-and-dimed, and they’re pushing back in the only ways they know how,” he says. “It’s about taking back control.”
Cheating Fee?
One of the most intriguing questions is whether travelers would lie or cheat to avoid a fee. What’s a cheat? For a few years, passengers could game Southwest Airlines’ “Early Bird” access to its seats. One traveler would pay extra to board early and then saved seats for the rest of the party. That infuriated some passengers. (Alas, Southwest closed that loophole and is now moving to assigned seating, so no more Early Bird cheat-cheats.)
If the Department of Transportation gets its way, airlines would soon be barred from charging fees to assign seats for kids 13 or under next to their parent or accompanying adult. And although passengers must give their birthdays when they buy an airline ticket, I’ve also met plenty of air travelers who have lied about their kids’ ages to bypass these fees.
Resort fees are also easy to avoid with a little insider knowledge. You can use a corporate booking code that allows you to avoid paying the fee. That’s right, corporate travel managers have negotiated these nuisance fees away — but only for their employees. And those with the booking code. (I’m not endorsing this strategy in any way.)
So will passengers bend a fact or two in order to avoid paying a bill? No doubt about it. And the reason is simple: People feel the fees are unfair, and often charged after a travel company quotes them a rate. It’s basically a lie. And they feel that if they’re being lied to, they have a license to lie right back.
But two wrongs don’t make a right. You’re better off avoiding these airlines and hotels than giving them your business.
Wherefore Travel Fees?
We’re not in a good place, observers say.
“The proliferation of fees has led to a more complex and less transparent booking process, where the initial price seen by the traveler can be misleading,” says Raymond Yorke, a spokesman for Redpoint Travel Protection. “This has fueled a rise in fee-avoidance behavior as travelers seek to control costs.”
Yorke says it also points to a broader issue within the travel industry where the emphasis on ancillary revenue has overshadowed customer satisfaction. In other words, travel companies care more about money than they do about you.
Unfortunately, since many travel companies dominate their markets, there’s no meaningful competition. (Again, that’s especially true for U.S. airlines.) So travelers may go to extremes to avoid fees. But in the end, if they want to travel, they’ll have to pay up.
Travel fee avoidance actions are more than a few money-saving tricks. They are a form of silent protest against an industry that’s lost its way. Travel should expand our horizons, not shrink our wallets.
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