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Travel is expensive — and unless you’re careful, it’s easy to bust your budget. Hidden or unexpected fees can quickly add hundreds of dollars to the tab.
Airlines, hotels and rental car companies have switched to this nickel-and-diming business model to compete in a world where people shop online for travel products and make decisions based on price. By tacking on fees — sometimes mandatory, sometimes optional for upgraded service — these companies can advertise lower prices.
“These companies need to be price competitive in order to get you in the door; then it’s easy to add ancillary fees on top of that,” said professor Chris Anderson, director of the Center for Hospitality at Cornell University’s SC Johnson College of Business. “It works, it generates revenue and it’s been adopted by enough companies that the negative ramifications have been minimized.”
Consumer advocate Charlie Leocha, president and co-founder of Travelers United, says the proliferation of fees makes it “much more difficult to comparison shop” and enables airlines, hotels and rental car companies to “squeeze more money out of the consumer.”
Here are some common travel fees and ways to avoid — or at least budget — for them.
Mandatory hotel fees
Some hotels add a daily “resort fee” or “destination fee” to their room rate. Hotels claim this mandatory fee, which averages about $27 right now, covers a bundle of amenities such as the gym, pool, WiFi and newspaper — but you pay whether you want them or use them.
The highest resort fees are in Las Vegas and Hawaii. At some hotels in Hawaii, the daily resort fee is now $45-$48, according to a recent survey by Travel-Hawaii.com.
Travel expert Ed Perkins, who writes for SmarterTravel.com, calls this “a hidden fee” and he believes it’s designed to trick people.
“Because this fee is not included in the first price you see posted on the hotel chain’s website or on a travel site — such as TripAdvisor, Expedia or Trivago — the comparison process is really distorted,” Perkins told NBC News BETTER. “It’s a practice that allows a hotel to tell you that a $100 a night room only costs $70, so it’s a scam.”
The American Hotel & Lodging Association (AHLA) says only 7 percent of U.S. hotels charge a resort fee and those that do will disclose it well before the end of the booking process. “We support breaking out all fees so consumers can make the most informed decision when planning their vacations. Consumers tell us they prefer this transparency, too,” AHLA said in a statement.
But unless you’re careful to check for added fees, they can be easily missed. This reporter was surprised when checking in at a hotel in midtown Manhattan recently that there was a $25 a night destination fee. I hadn’t noticed that mandatory fee in the small print on my confirmation receipt and didn’t even think of looking for it because I was using rewards points for a free night.
The receptionist said many guests were complaining that they didn’t know about the fee and he agreed to remove it. He also advised me that “most of the other major hotels in the area” were also tacking on this fee.
Lesson learned: Check the fees before you book a hotel room. You may have to search for them, but they should be listed. If you feel you were misled, complain. You may be able to get the charge removed.
Basic economy air fare fees
The big three U.S. airlines are trying to compete with low-fare carriers, like Allegiant Air and Frontier, by offering “basic economy” fares on their domestic flights. American, Delta and United now have basic economy fares on some international flights.
Basic economy means something different at each airline:
- On Delta, you get one free carry-on that can go into the overhead bin.
- With American and United, you’re allowed one small personal item that fits under the seat in front of you, such as a shoulder bag, purse or laptop bag. Find yourself at the gate with a bag that’s too large and you’ll be charged a $25 service fee, plus the standard fee for checked luggage.
A recent article in Conde Nast Traveler breaks down the differences for basic economy at all the major U.S. airlines.
Charlie Leocha with Traveler’s United says many travelers don’t understand the limitations that come with basic economy. He believes the lack of standardization is causing a great deal of confusion.
“As we all know, American consumers don’t read all of the fine print. They don’t read all the big print either. They just look at the prices. They see a low price, they buy it and then they get into trouble when they get to the airport,” Leocha said.
The airline industry says it’s trying to offer fliers bargains, while making sure it spells out what each fare does or does not include.
“It would be tough to find an industry that’s more transparent, as all pricing is available at the click of a button,” Vaughn Jennings, vice president of communications at Airlines for America, said in a statement to NBC News BETTER. “Customers are benefiting from an unprecedented combination of affordability and choice as fares have declined for three consecutive years.”
Rental car fees
Rental car companies are notorious for added fees. Expect to pay $20-$30 a day, if someone 21-24 years old will be driving the car. You might also get hit with a surcharge for multiple drivers or if you plan to drop-off the car in another city. And don’t lose the key: That could cost you as much as $300.
Tolls are something else you might not consider. If the car has a “to go” pass on the windshield, that toll will be paid by the rental car company and added to your bill. You’ll also get hit with a daily “convenience fee” — typically $3.95 to $4.59 — for using that transponder.
- With the e-Toll program at Budget and Avis, once you use the transponder, you’ll be charged $3.95 a day for every day of the rental (up to a maximum of $19.75 per rental month), even on days when e-Toll is not used.
- Watch out if you rent from Dollar or Thrifty. They have a $15 per toll surcharge ($9.99 per occurrence in Florida), unless you buy their PlatePass All-Inclusive Service in locations where it’s available.
To avoid tolls and the added fees, use a mapping app that shows you how to avoid them. If you know a turnpike or expressway takes coins at the automated toll booths, bring along a lot of change.
Credit card foreign transaction fees
Headed outside the country? Check to see if your credit card charges a foreign transaction fee. If so, you may want to get another card before you head off.
The typical fee can be as high as 3 percent of the purchase price. That may not sound like a lot, but for a $3,500 hotel bill, that’s around $100.
Some top-rated credit cards don’t charge a foreign transaction fee, including the Chase Sapphire Reserve, Bank of America Travel Rewards Credit Card, Discover it Cash Back, and all Capital One cards.