It’s official: “unbundling” has taken over the travel industry.
Airlines alone earned $27.1 billion in ancillary fees in 2012, compared to just $2.45 billion in 2008. The ballooned figure represents more than 38 percent of a carrier’s revenue, according to IdeaWorksCompany, a consultant specializing in ancillary revenue.
“Once largely limited to low-fare airlines, ancillary revenue has now become a financial necessity for airlines all over the globe,” the report’s author, Jay Sorenson, wrote.
It doesn’t stop with air travel, though.
Unpopular policies like resort fees, airline ticket change fees and car rental fees have all become standard in recent years.
“They’re not there to serve your needs,” Grant Cardone, author of the book If You’re Not First, You’re Last, told USA Today. “Customers usually don’t even know a policy exists until they have a problem that can’t be solved because of a policy.”
Now, even cruises are charging extra for certain on-board restaurants, which essentially goes squarely against an “all-inclusive” package.
It’s a shift that makes perfect sense in a boardroom, instituting a new policy and seeing how much can be profited, but customers can’t stand the new rules, and companies’ reputations have suffered as a result.
Remember a time before Spirit Airlines went fee-crazy? Caesars Palace before resort fees? Cruise lines before they started charging for everything under the sun?
As consumers, we should be able to reverse the trend by leveraging our economic clout. But, when four dominant airlines control more than 85 percent of domestic flights, two cruise lines control more than 70 percent of worldwide boarded passengers, and lodging markets like Hawaii and Las Vegas mandate resort fees, it makes it difficult to fight the good fight.
A boycott alone is rarely enough to make a significant difference, but social media shame and threats of regulation can make a company that forces you to pay a new fee or has a customer-unfriendly policy change its ways.
Unhappy? Try these tactics from consumer advocate Christopher Elliot:
You can reach a large audience almost instantly thanks to Twitter, Facebook and Google+, and public pressure can bear more weight than the absence of your dollars. Tip: you’ll likely get faster feedback from an airline’s Twitter account than their customer service line.
Spirit Airlines reversed its decision to refuse a refund on a non-refundable airfare for a patient with terminal cancer after the Facebook page “Boycott Spirit” garnered tens of thousands of likes.
Call the government
Congress, the Federal Trade Commission and the Transportation Department can exert regulatory pressure on companies with bad policies. If you never complain, they’ll never have a chance.
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