Categories
Business Travel

Pay Attention to Your Receipts: Hotel Costs are Increasing

Hotel ancillary fees are on the rise, following in the same path that airline ancillary fees have taken these last few years.

As I reviewed my hotel receipt from a recent business trip to Orlando, I couldn’t believe the additional charges that were billed in addition to the nightly rate:

  • Convenience Charges
  • Resort Fees
  • Refrigerator Charge
  • Coffee Supplies
  • Cleaning Fees

These types of additional fees are, on average, costing travelers an increase of 25% over the nightly rates. As business travel spend continues to rise, it would behoove all travelers to carefully review and audit your receipts to be aware of and, in some cases, avoid these added hotel costs.

Categories
Business Travel Travel Industry

New Airline Ancillary Fees

Airlines continue to implement new ancillary fees and increase charges on existing fees. It’s important for companies to update their expense policy to address these costs and equally important for travelers to be aware of what their company will, or will not, reimburse.

IdeaWorks Company recently released a study of airline ancillary fees which has sparked a couple of interesting articles worth reviewing:

  1. Ancillary Fees Up but Companies Less Likely to Reimburse, Fox Business
  2. What Airline Fees Are Coming Next?, USA Today
Categories
Business Travel Travel Industry

Ancillary Travel Fees

ancillary feesThe growth of ancillary fees in all categories of travel, especially air travel, has captured the attention of the traveling public as well as policy makers.

Since these fees broadly affect both business and leisure travelers they have received attention in industry publications, business journals, and popular media. Congressional testimony and calls for additional legislation and agency rule-making have ensured that the debate over fees has implications for public policy questions as well as for business operations.

Although airline fees have been the focus of much of the public discussion, the issue is broader than just airlines. The hotel and car rental industries have also seen changes in their pricing structures that have incorporated add-on services and ancillary fees.

For example, I recently received an email from a customer who was frustrated by the fact that the taxes and fees for his car rental exceeded the combined daily rate for a four-day rental–a shocking discovery most of us have experienced throughout our travels.

Categories
Travel News

Passenger Safety or Airline Revenue?

Is it passenger safety or airline revenue that is prompting airlines to more closely scrutinize the size of carry-on luggage that is being used by travelers? On some of my more recent flights I had noticed that many travelers were toting larger carry-on luggage with some of it ending up on the plane, but some of it checked at the gate for no additional fee. I questioned how these travelers made it as far as they did, with obviously oversized carry-on bags, and wondered if it would be just a matter of time before the airlines started charging for bags checked at the gates.
Though I appreciate the efforts of the airlines charging other passengers for luggage that technically should have been checked, I also tend to question their reasons why. Spokespersons for the airlines are indicating that it is passenger safety that they are concerned about, but could it be just another source of revenue?
FAA regulations allow carry-on luggage as large as 22x14x9 inches and passengers will have to get use to using the bag bins airlines provide at the gates to check the size of the carry-ons. Airline employees and even TSA inspectors are keeping a closer eye on the size of bags that travelers are trying to take through security lines and are informing passengers that they need to be checked prior to gate arrival.
The airlines may struggle in the beginning to make this process fair to all passengers, but regardless of the motive, whether passenger safety or airline revenue, it’s going to be harder and harder to avoid the fees charged for bags.
For additional information regarding the ancillary fees being charged by airlines and the revenue generated from these fees, there was an interesting article in USA Today written by David Grossman The paradox of baggage fees: Higher charges, lower profits. or you can contact Christopherson Business Travel (866.327.7650).

Categories
Travel Management Travel News

Fees, Fees and more Airline Fees

In the beginning we may have been caught off guard by ancillary fees charged by some of the major airlines, Delta, United, Continental, American Airlines and others, but what is happening now? Are we learning to accept them, ignore them or just plain hate them?
According to a study by ProMedia Travel, many corporations are reporting that anywhere from 5% – 15% of their corporate travel budgets have been consumed by airline ancillary fees. What appears to have happened is that many airlines have ‘unbundled’ their fees, but have not lowered airfare. Consumers are okay with paying fees for items or services that add value to their travel experience, however, they are not okay with paying fees for what use to be included in the cost of their airline ticket such as baggage fees. Checking baggage is an essential part of travel and most people feel should be included in the price of the ticket, the quoted price by the airline, which it isn’t.
Several carriers, such as JetBlue and Southwest, are charging additional fees, but these fees are for services that add value while fares remain reasonable and a checked bag is included. This has allowed these airlines to generate revenue while at the same time keeping their customers happy. JetBlue does this by charging additional for seats with extra leg room and their TruBlue program has no blackout dates, you can use points to book any seat on the plane, points don’t expire and change and cancellation fees are reasonable. Though the boarding process with Southwest can be challenging at times, their philosophy is similar, they don’t charge change or cancellation fees and neither airline charges for the first checked bag, and they use this as a very effective advertising tool.  These airlines are actually turning million dollar profits while the major carriers are reporting multi million dollar losses.  When will the major airlines realize that there is something to be learned from JetBlue and Southwest Airlines?
We don’t necessarily need to become a prisoner to ancillary fees. Travel managers can try using the increased cost of doing business with the airlines as a tool during contract negotiations. The Department of Transportation could make a ruling mandating that airlines display what every passenger considers to be part of a reasonable airline ticket, and then allowing us to ‘opt out’ of items like a first check bag.