After years of being unable to travel, many people are eager to get away this summer. Travelers should beware of the traps that are advertised on the internet.
According to travel experts and studies, this is because, in order to recover their losses due to the pandemic outbreak, hotels and airlines are resorting to hidden fees and nickel and diming customers. These fees are referred to by regulators as 'junk fees'
Most likely, you have encountered junk fees on your travels. These extra fees can take many forms. They may include charges for amenities at resorts, checked baggage, or seat selection. These charges are added at the end of the transaction.
The travel industry has been using this strategy for years. According to studies, some fees such as those for baggage and seating selection on airplanes crept up over the course of the pandemic. Hotel resort fees have also become more common. These are usually a daily charge between $20 and $50 for services such as Wi-Fi or parking.
Consumer Reports estimates that hotel junk fees cost consumers about $3 billion per year. According to IdeaWorks Consulting, airlines' revenue from ancillary charges, such as carry-on baggage, seat assignments, and early boarding fees, will reach $102.8 billion by 2022. This is up 56 percent compared to the previous year.
The days of searching for travel deals quickly on search engines such as Google, Expedia, and others are over. It's possible to estimate the cost of a hotel or ticket, but it takes a lot of time to calculate the actual cost.
Henry Harteveldt is the president of Atmosphere Research in San Francisco, which provides travel analysis. He said that hotels and airlines don't want you to compare prices for flights or hotel stays because they do not like to be bought based on just price.
Regulators say that the practice of charging junk fees has become so commonplace, it must be changed soon. The Federal Trade Commission (FTC), which started an investigation into these fees last year said that it would announce rules in the next few months restricting businesses' ability to charge them.
It's our responsibility to be on the lookout for misleading pricing and avoid them whenever possible. Here are some ways to go about it.
What is a hotel's junk fee?
Say you want to book a room at the Grayson Hotel, by Hyatt. In an online search engine like Google or Expedia, the price of a hotel room may appear as $331 per night. The real price is $421 once you reach the checkout.
You will see that the taxes have been added. The $34 daily destination fee, which includes Wi-Fi access, gym membership and a 10% discount in the hotel restaurant is less expected. This is about 8 percent of the price of the hotel room.
These small charges can add up after a few days.
Chuck Bell, director of Consumer Reports and a long-time opponent of junk fees, said: "What we're seeing is nontransparent pricing that's deceptive." The travel provider does not want to reveal the full cost upfront so they conceal it.
Many online resources regularly track resort fees even though hotels do not make it easy to see them.
Resort Fee Checker allows you to search for hotels and see if they charge resort fees. If so, it will tell you how much. NerdWallet, an online personal finance website, did a study this year to determine the worst offenders in resort fees. The study revealed that Wyndham, Hyatt, and IHG were the companies charging the most, ranging from 3.8 to 6.5 per cent of the cost of a hotel room.
A third best practice is to compare prices on the hotel website directly, rather than through a third party agency such as Expedia or Priceline. This is because hotels sometimes charge different resort fees for those who book through third-party agencies. If you sign up for hotel loyalty programs they will often waive resort fees if you are a returning customer.
The airlines make the booking process even more difficult because they don't reveal additional fees until late in the process. You are shown the cost of selecting seats and checking a bag after you have selected a flight.
Harteveldt says that the best way to avoid paying excessive fees is to familiarize yourself with the business model of a particular brand. Budget airlines that offer the lowest fares are known to charge more for basic services like luggage and seat selection.
NerdWallet conducted an analysis in February that found that Alaska, Hawaiian Airlines and Frontier Airlines were the airlines that charged the highest prices for seat selection.
You can choose not to select a seating option and hope that the customer service representative in the terminal will be able help you. This is a risky option, and not recommended for families.
To travel on a tight budget, you will need to do more work. Add up all the costs for each vendor. You can only make a true comparison if you include all the fees.
We hope that in the future we won't have to do this. Doug Farrar said the F.T.C. was not interested in giving consumers advice about how to handle surprise fees, but rather wanted to force businesses to stop charging junk fees by regulating their practice.
He said: 'We are going to try and end it.' He added, however: "I don't believe you can avoid this strictly speaking." It's baked right into the process.
Some brands have changed their methods to get ahead of the regulatory crackdown. Marriott International announced that it has updated its rates recently to include resort fees for people who use its app or website to make bookings. Hyatt announced in a press release that it would be doing the same.
It doesn't necessarily mean that brands will stop charging fees. It will be helpful to know when a deal may not be as good as it appears. You can then book elsewhere.