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Travel companies disguise price hikes as taxes

The Washington Post

September 7, 2008

As every good tourist knows, when it comes to the cost of travel, there's the price and then there's the price. No one really believes that that flight to Europe will cost $299, regardless of what the ad says, or that a hotel stay will be $99, or a car will run just $15 a day. Why? Two words: taxes and fees. Lots of different fees.

But what do those terms really mean? We took a close look at some of our own recent travel bills with an eye toward discovering which additional charges were unavoidable, such as government-imposed taxes, and which were simply price hikes in disguise.

A consumer facility charge from Enterprise Rent-A-Car: $2.25 a day. Not a dealbreaker, perhaps, but what is it? Well, it's described partly as a daily rental fee for the car's parking space. Yes, the space the car isn't using for as long as you're paying to rent it. And yes, other rental-car companies assess such a fee as well.

Like the great American inventors of the past, corporate and governmental geniuses have, in recent years, shown considerable creativity in extracting additional cash from travelers' pockets: Think about the "resort fee" some hotels charge and New York City's "bed tax." Corporations cannot always control the taxes and fees heaped upon their services - have you looked at your cell-phone bill lately? - but other fees seem to be a way for airlines, hotels, cruise lines and rental-car companies to underwrite their own cost of doing business.

Grouse though they may, consumers well understand why airlines are adding fuel surcharges to airfares. And there's a grudging acceptance of post-9/11 security fees. But some of the charges you find on your final bill stem from the travel and hospitality industries' lack of "pricing power." That means that, in this atmosphere of cutthroat competition, companies don't dare raise their prices lest they be one Priceline search away from losing business.

What's a travel consumer to do? Be ever vigilant, questioning the $1 charge for the room safe, especially if you never used it. Be entertained by the idea that you're paying an extra $5 for the privilege of having U.S. Customs seize that salami. And in the end, be aware that the more they nickel-and-dime consumers, the more you will do the same back to them.

Anatomy of cruise fees

WHAT: A four-day Carnival cruise, departing Sept. 1, traveling round-trip from Miami, with stops in Key West, Fla., and Cozumel, Mexico.

BASE FARE: $180.

TAXES AND FEES: $50.49

Customs fee: $1.93

U.S. government fee: $42.56

Immigration tax: $3

International departure cruise-only tax: $3

PORT CHARGES: $148.50

Each port city charges a fee to cover such costs as security, electricity, water, etc. The port authority and the cruise line determine a rate that each passenger must pay. This figure is not based on the size of the ship or amount the passengers paid for their cabins, so everyone pays the same amount.

FUEL SURCHARGE: $36

The cruise industry began introducing fuel surcharges last year to defray rising oil costs. The amount varies with each cruise line; Carnival charges $9 a day.

TOTAL PRICE: $414.99