Sneaky Add-Ons Fleecing the Road Warrior

July 16, 2007 — -- It really is a jungle out there, and we who travel for a living are pretty savvy about staying at the top of the food chain. Whether protecting your own little company or watching your employer's budget, you arm yourself with your laptop and a host of travel sites to help you zero in on the best bargains.

Stalking the lowest rates through the tall grass of competing airlines, car companies and myriad hotel chains, you slowly close in for the kill, pulling the trigger at last on that great rate as your credit card number rockets through cyberspace to seal the deal.

Congratulations, you've just been had — again. That $45-per-day rental car is going to cost you $110 per day, and that airline ticket to get to Fernortin Falls is actually $45 more than you were told, and the city fathers of Fernortin Falls have discovered that they can tax the marrow out of your hotel room and add on an additional 20 percent just for the privilege of sleeping in their city.

Yes, it's true: Irritating add-ons and additional taxes have been around for decades. But the practice of adding on add-ons and trying to hide them is accelerating out of control, and the companies you trust to show you the true price of their products and services are increasingly engaged in a conscious attempt to hide or understate that final price, for fear you'll take your business elsewhere or decide not to rent or buy in the first place.

There's a word for that in American jurisprudence, by the way. It's called "fraud."

Editing Out the Add-Ons

What travel sites, rental-car companies and hotels often fail to make clear — that's the most charitable explanation, by the way — is the increasing percentage and type of add-on charges you'll pay with the final bill for the services they're hawking. The additional items are pawned off with obscure titles such as "airport taxes" or "concession charges," and in many cases (especially overseas) they can double or even triple your final bill.

For example this month in Amsterdam: An advertised 26-euro-per-day car rental sounds great, until you add the 47 euros charged for the privilege of renting at the airport in addition to the 19 percent local tax.

This trend has become a worldwide stampede, and to some extent it's a variation of the long-disdained advertising scam called "bait-and-switch," in which potential buyers are enticed with a low price only to be pressured or misled into paying a higher price for a different product.

Actually, the airline industry is the lesser offender in this drive to shove all extra charges to add-on status. To be exact, the average round-trip airline ticket in the United States these days carries around a $45 tax burden. The federal ticket tax is 7.5 percent of the base fare, the federal segment tax is $3.20, the so-called passenger facility charges can be up to $4.50 and the federal security service fee for the Transportation Security Administration is currently $2.50.

Because the base fares for the airlines have dropped almost 40 percent since the early '90s (due to the airlines progressively pricing their product below cost), and with the added taxes after Sept. 11, the overall percentage of your airline ticket price going to taxes has been climbing.

But when airlines, Internet sites or airline tour packagers fail to include these extra charges in their advertised price for a flight, they are acting to gain an advantage against the more honest companies who state the entire price up front. When that happens, the purpose is obvious: They hope you'll see their lower price, forget to figure the taxes and buy their product on the erroneous assumption that it's cheaper. To a lesser extent, the practice of advertising round-trip flights but stating only one-way fares is equally misleading and dripping with fraudulent intent.

Grabbing Out-of-Towners' Wallets

Hotels have a bit of an excuse as well in that many of their add-on charges are from local and state tax authorities greedily trying to rebuild their communities with the cash extracted involuntarily from out-of-town visitors. It's an area of taxation in which few are honest, though there is one notable exception.

A few decades ago Oregon decided to be extraordinarily upfront about this business of wanting visitors' money with an official state tourism campaign that roughly translated to: Keep our state green, bring money — then go home. But in most cases, the grab at the out-of-towners' wallets is clandestine, with virtually no notice to the inbound traveler before checkout.

It is the rental-car companies and the "agents" who sell their services through the Internet who deserve the greatest condemnation. The descriptions of add-on charges for rental cars across the United States and Canada are becoming more and more creative, raising questions about their legitimacy in many instances.

When it's a direct tax on the rental customer forced by a state or city, the blame is the same as hotel-room or tourism taxes. California, for instance, imposes a "California tourism fee," presumably for rebuilding those roads that only tourists will use.

When asked, airport-based rental-car employees are quick to blame their airports for charges labeled "Concession Fee Recovery." But in truth, while the rental companies struggle to pass on virtually every tax imposed on them, the descriptions of the various charges that make their way onto the final invoices often leave customers wondering just who is getting that money: License Fee, Motor Vehicle Lease Tax Fee, Customer Facility charge, License and Tax Reimbursement, Airport Facilities Fee, Air Conditioning Recovery Fee (what?), and one bill I experienced personally last year that simply added 10 percent labeled as "Fee."

Are these fees legitimate? Who knows. This is the same industry that decades ago was caught charging large amounts for collision and liability "insurance" it never bought.

Of course, rental-car companies are free to charge anything they want for their service. But the point is this: If you're going to charge us, tell us clearly in advance what ALL those charges will be or pay them yourself.

And why is this important in the grand scheme of airline travel? Because airlines in particular (as well as most travel-related businesses in general) are in mortal battle for survival in an insane world where pricing the product below cost seems to be OK (despite continuous bankruptcies). Selling sandwiches aboard flights is one thing, but if we let any related industry prove that out-of-control, sneaky add-on charges will work, we'll see an explosion in the airline industry as well.

"Sir, that $45 add-on is to pay for our costs in providing the emergency oxygen mask above your seat. Now, if you don't WANT it …"