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Ubiquitous Surcharges Fuel Outrage |
In the air, on land and at sea, there's no escape from taxes
Starting this week, many passengers hunting for the lowest airfare may not realize that
the price they actually pay will be up to $20 higher round trip - thanks to
airline-imposed fuel surcharges that don't show up in initial rate quotes provided by
travel agents and Internet reservations systems.
"What's next? A food surcharge? Maintenance surcharge? How about a fee to clean the
airplane between flights?" complained Houston traveler Bolie Williams in a recent
e-mail posting to a fuel surcharge bulletin board on CNN's travel site. "Just price
the ticket and let me fly. This is like selling cars for a given price but then adding
mandatory dealer options. . . . They're just raising the ticket price in such a way that
they can convince themselves it's OK to advertise prices $20 under what they actually
are."
But the new charges, which major airlines added to most domestic tickets effective Tuesday
in response to escalating fuel costs, are just the latest example of ways in which
apparent travel bargains can lose their punch when all taxes and fees are included in the
final tab. And they're a potent reminder of why travelers need to scour the fine print
beyond those tantalizing newspaper ads or Web page come-ons.
Government-imposed taxes account for much of that fine print. In 1998, the most recent
year for which comparative statistics are available, hotel taxes in the nation's top 50
destinations averaged 12 %, from a low of 9% in Las Vegas, Reno and Portland, Ore., to a
high of 17% in Houston, says Rick Webster of the Travel Industry Association of America.
That's chump change compared with airline taxes, which can approach 40% of the ticket cost
on international flights. A recent example: a Web-only fare promoted at $209 round trip
from Washington, D.C., to Mexico City. The final price, including such compulsory extras
as an immigration inspection fee, U.S. animal and plant health inspection service user
fee, and a new $15 Mexican arrival tax, worked out to $287.84 - 38% more than the initial
quote.
Rental car taxes, including fees imposed by destinations trying to finance new stadiums
and convention centers, also can add significantly to the basic rental price. Since Jan.
1, for example, San Antonio car renters have been paying an additional 5% tax to help
finance an arena for the NBA's Spurs - a move that raised the total tax to 15%.
But critics contend that some of those extras simply reflect the costs of doing business -
and by not including them in their initial prices, travel companies are deceiving
unwitting consumers.
Three years ago, lawsuits in several states prompted most cruise lines to incorporate port
charges - a mix of taxes, fees and other cruise line costs for port facilities and
services - in their advertised prices, rather than break them out separately. Compliance
isn't universal, however: Renaissance Cruises' recent eye-popping deal of $799 per person for a Mediterranean cruise, like
other Renaissance offerings, doesn't include port charges and other taxes of an additional
$249 per person.
Sticker shock remains a factor in many car rental transactions as well, thanks to low
basic rates inflated by such extras as airport concession fees, off-airport access charges
and collision damage waivers, which many drivers don't need because their own insurance
covers rental car use.
A car rental task force of the National Association of Attorneys General will meet in
Austin, Texas, in April to study current advertising practices to determine how clearly
the extra fees are disclosed during the reservation process. And a Budget Rent a Car
customer is seeking class-action status for a lawsuit against the state of Florida,
arguing that the 6% or 7% sales tax applied to the $2 daily surcharge for his recent
Orlando rental amounts to a tax on a tax.
"We're seeing an epidemic of add-ons," laments Laurie Berger, editor of
Consumer Reports Travel Letter, in part because the Internet's explosive growth has forced travel
suppliers to "discount their products more frequently than in the past. . . . Fees
and surcharges are a great way to close the gap."
The airlines' new fuel surcharges, say some passengers and consumer advocates, are a case
in point.
Federal law states that only governmental fees may be excluded from airline price quotes.
But would-be travelers and travel agents searching computer reservations systems for the
lowest published fare won't see the surcharges (which are not included in the quotes or
listed separately in the displays), says airfare expert Terry Trippler of. Complicating matters: Some airlines aren't
imposing the fuel surcharge, while Southwest Airlines simply increased its base fares by
$4 to $8 round trip to cover the cost.
Warns Trippler: "Comparing apples to apples is going to be very hard to do until this
all shakes out."
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