What Biden’s ‘Junk Fee’ Crusade Could Mean for Travelers

US presidents don’t usually dig into the details of airline seat selection, but that’s exactly what President Joe Biden did during his State of the Union address earlier this year. spending nearly two minutes of the speech denouncing “junk fees”.

“We will prohibit airlines from charging a family $50 round trip just to be able to sit together,” Biden said during his speech. “Baggage fees are bad enough. Airlines cannot treat your child as baggage.

The past decade has seen an explosion in the sophistication with which airlines, hotels and vacation rentals earn extra revenue from extra charge. Yet travelers and the politicians who represent them may have had enough.

“Consumers have had enough of this for a while,” says Lauren Wolfe, an attorney for travel advocacy group Travelers United and founder of the website KillResortFees.com. “Americans shouldn’t have to deal with misleading prices,” Wolfe added, referring to the practice of fees being added throughout the checkout process rather than disclosed upfront.

Now the question is what changes could be made to these fees and what these changes will mean for travelers.

How we got here

The “a la carte” model of offering low upfront prices with fees for add-ons has become common in the age of internet search. Customers using online search tools to book travel were looking for the cheapest option, prompting low-cost airlines such as Spirit and Frontier to offer low base fares with more expensive surcharges.

“You have low-cost carriers competing with each other by offering lower fares, and traditional airlines are trying to ignore that threat for as long as possible,” says Jay Sorensen, president of IdeaWorksCompany, a consulting firm in air Transport. “At some point the dam bursts and they have to compete with low-cost carriers.”

According to a report by IdeaWorksCompany, ancillary revenue – the industry term for revenue from royalties and other add-ons – has risen from 6% of total global airline revenue in 2013 to 15% in 2022.

A similar trend has manifested itself in hotel resort and amenity fees, which began in vacation destinations like Orlando and Las Vegas but spread to destinations with few resorts.

“If you want to stay at an above-average Marriott hotel in Boston, there’s an 85% chance you’ll get a resort fee,” Wolfe says, citing data she collected. “I was surprised my recent hotel in Tulsa didn’t charge for one.”

Changes already underway

Although Biden’s proposed reforms did not pass Congress, the industry began to respond preemptively, removing and clarifying some problematic fees.

Airlines have also relaxed seat selection fee, which have caused confusion and expense for travelers, especially families. United Airlines recently introduced new features allowing children under 12 to sit next to an adult at no additional cost. And low-cost carrier Frontier Airlines has launched a similar feature for children under 14.

Yet, argues Sorensen, it may be too little too late to avoid government intervention.

“The airlines did the wrong thing in that regard, in that they should have welcomed the families earlier. What was happening at the airport was chaos,” he says, citing how some families wishing to s sitting together tried to switch seats with other customers at the gate or on the plane.

And after

Biden proposed the Junk Fee Prevention Act, which would affect airline seat selection and resort fees. The act has to go through a divided Congress, but that might not be as difficult as it seems.

“Unwanted fees are universally hated. It’s a uniquely bipartisan issue,” says Wolfe. “The people who defend junk fees in hotels are the politicians who get paid by the hotel lobby.”

Wolfe thinks the hospitality industry won’t change its surcharge structure until Congress forces it to. The Biden administration could apply new rules to airlines, which are more federally regulated, but it has yet to do so.

“I think the Department of Transportation dragged its feet on the issue,” Sorensen said. “They’ve had the regulatory authority to deal with this for years and haven’t.”

It may come down to the efforts of industry lobbyists against the political will of weary voters.

“It’s not going to stop until someone tells them to stop,” Wolfe said.

This article was written by NerdWallet and was originally published by The Associated Press.

Leave a Reply

Your email address will not be published. Required fields are marked *