The feds are targeting the wrong hidden travel fees
The Dept. of Transportation wants more info from airlines.
Newly proposed rules would require airlines and websites such as Expedia, Kayak and Travelocity to more fully disclose add-on fees for things such as checked baggage and more-comfortable seats. But if the feds really want to help travelers control costs, they should also target the array of fees layered on by state and local governments — most of them unadvertised — at nearly every juncture of the typical travel experience.
When I traveled to Los Angeles recently, I booked a rental car at a rate of $105 for three days. The final bill came to $144.21, or 37% more than the advertised price. And it wasn’t the rental agency gouging me. The added costs came from sales tax, a “concession recovery fee,” a “vehicle licensing recoup,” a “customer facility charge” and a mysterious item on my bill listed only as TAF.
Airline costs, by comparison, are usually much clearer. On the same trip, my advertised airfare from New York to L.A. was $383.62, which included $47.23 in taxes and fees. The final amount I ended up paying: $383.62. Had I chosen to check bags, the costs were listed on the receipt sent by the airline the day I booked the ticket.
Airline pricing, in fact, may be the most transparent part of any trip. Recent rules require carriers to include taxes and fees as part of advertised airfares. Most carriers disclose additional fees for checked baggage or other perks (if you can call them that), because it’s not worth the hassle to argue with angry passengers at the airport or, worse, on the plane. Travelers still need to be wary of hidden fees, but consumer-friendly sites help by listing all airline fees for those savvy enough to do a basic Web search.
Weaker protections
Consumer protections are weaker for hotel and car-rental costs — largely because taxes and fees on those businesses are assessed at the state and local level, not by the feds. On my L.A. trip, for instance, the nightly rate at my hotel was $217, or $652 for three nights. But the total bill came to $751.92, on account of a 14% “occupancy tax” and a 1.5% “business tax.” (Had the room been taxed at the regular sales tax rate, it would have been a mere 9%.)
Taxes and fees add about 20% to the cost of a typical airline ticket, according to Airlines for America, the industry's’ trade association. A 2013 study by the Global Business Travel Association found the average tax rate on lodging in 50 big cities is about 14%. On rental cars, it’s about 13%. On my L.A. trip, the hotel tax rate was close to the average but the rate on my car rental was far higher, perhaps because of additional local surcharges that pushed up the bill.