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Travel Agencies Cling to Hidden Fees Because Fraud Works


Travel Agencies Cling to Hidden Fees Because Fraud Works

There’s a simple reason why annoying fees are prevalent in travel. They work. Customers are spending more money. And in some cases, policy and the tax code encourage them.

John Arnold shares what happened at StubHub when they tested an elimination of hidden fees for some customers: those who were shown transparent all-inclusive pricing spent less money.

Customers subject to back-end fees spent 21% more money and were 14% more likely to make a purchase. Stubhub, which began a transition to fully transparent pricing in 2014 in response to numerous customer complaints about hidden fees, reversed this policy and reinstated them after this A/B test.

The U.S. federal government and several states have opposed hotel stay fees, and in addition to state lawsuits, there are also private lawsuits. It looks like we’re starting to see progress with all-inclusive pricing. Even Airbnb offers this as a toggle option.

However, we have seen little progress with online travel agencies like Expedia, which in my opinion is one of the worst travel companies. for other reasons. And until online travel agency sites list all-inclusive rates, hotel websites will appear to charge more money for the same rooms. It is a problem.

Airline fees are already fairly well disclosed (although more extensive, encouraged by the tax code). The Transportation Department is considering fee disclosure rules that could actually help airlines at the expense of consumers.

No one seems to pay attention to the most fraudulent charges: car rentals. It’s really tempting for cities to tax city dwellers!

Here are some of the fees car rental companies charge:

  • Recovery fees from the Tourism Commission: Why should a tourist pay a tax, perhaps 3.5%, to… encourage tourism? They are already tourists, and taxing tourism literally does the opposite!
  • Dealer Recovery Fee: Your rental car company has to pay the airport to operate there, and you pay extra for the right to sell yourself (isn’t that what the price of the car is for?).
  • Customer transport costs: the free rental car shuttle is not actually free and you pay for it whether you use the shuttle or not.
  • Parking recovery fees: when you are I don’t rent the car and they don’t rent it to anyone else, you have to park it and parking is expensive. It’s literally a fee that covers the time you’re not renting from them.
  • Premium location fees: This covers the rent from the car rental company. Usually this comes from a company’s general revenue. But since the rental service at the airport is convenient (even if it is not the case if it is an off-airport rental center). that convenient), they call it a “premium slot” and add a fee for it. But it’s really a rental fee.
  • Energy supplement: this may cover utilities (in addition to the property rent, there may be an electric bill, although this is likely included in their rent), refueling rental cars (but you must either return it full, or pay for gas!), or fuel. for the shuttle (but you already pay a fee for that). Some hotels have tried adding energy supplements, but the chains have found this too fraudulent and are cracking down on the practice when it grows. However, there is nothing too fraudulent for a car rental company.
  • Vehicle license recovery fees: If you rent the car, doesn’t it need to be registered? Why are you paying for this as a separate service? “Yes, I would like to rent the car but it does not need to be registered. Okay thanks.” If required by law, this is included in the price. It is not an extra charge.
  • Air conditioning recovery costs: A car manufacturer pays an excise tax on air conditioners. In theory, the car manufacturer therefore charges the rental company more for the vehicle. And the rental company charges you extra because the price of the car is higher. Of course, more expensive cars also tend to mean higher rental rates. Double dip!
  • Seasonal tire costs: This one seems unique in Quebec, where winter tires are mandatory in winter and rental companies charge for them year-round (because both tires must be installed and removed as well as stored).

Unwanted fees often add 50-100% to the cost of a car rental. The good news is that many of these are specific to airport car rentals, and especially do-it-yourself rentals. recover at the airport. So if you leave the airport to rent, you save these fees.





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