As the summer travel outlook improves, added fees are making a comeback
Ready or not, travel fees are poised to make a comeback this summer.
Some of them were inevitable. For example, last month most major airlines began reinstating penalty charges for some ticket changes. Yeah, I know — what took them so long?
Other fees may come as a surprise. If you’re visiting the Caribbean island of St. Maarten, for example, you will have to pay a $30 fee for its Visitors Protection Plan. It covers medical expenses and a medical evacuation — whether you need them or not.
Airlines, hotels and travel agencies, mindful that customers hated extra charges, wisely suspended many of them because of the pandemic. But they never stopped thinking about them or the much-needed revenue they provided. Now that people are starting to travel again, the industry is ready to bring back the fees — and then some.
The fees fall into two broad categories: the new ones imposed by countries on international visitors and the fees (new or reinstated) charged by companies such as airlines, travel agencies and vacation rental firms.
Government fees such as the one charged by St. Maarten for visitor protection are relatively new and not covered by insurance. Sanne Wesselman, a marketing consultant who lives on a catamaran in the Caribbean, stumbled upon the St. Maarten fee on a recent visit to the island. Wesselman, who wrote about the experience in her travel blog, says the more she thought about the fee, the more sense it made.
“It keeps me from having to pay high medical bills in case I do contract covid here,” she says. “And it helps St. Maarten in its fight against the coronavirus.”
Mohak Nahta, the CEO of Atlas, an app that helps travelers complete visa applications, says other countries have new mandatory health fees. One of the best-known — because it affected so many U.S. travelers this spring — is the $50 to $70 charged to visitors for the Bahamas health visa. The visa covers basic medical expenses on the islands.
Like Wesselman, Nahta thinks such fees are fair. “At least it lets people go into the Bahamas,” he says.
But what happens when the pandemic ends? Travel insurance experts predict that countries will institute a strict medical insurance requirement to offset the cost of providing medical care to tourists. Or they will keep a medical visa requirement, if they have one, even though the pandemic has ended. That’s how it goes with travel fees. They’re easy to add but hard to remove.
When it comes to travel companies, the fee frenzy is just starting. They eased up on fees during the pandemic because there were so few travelers. But other industries set an example that the travel industry is now following.
A Washington Post investigation this year found that U.S. businesses were charging coronavirus-related fees ranging from a hair salon’s $5 disinfection charge to $1,200 for cleaning in a senior-living center. Worse, businesses didn’t always disclose the fees.
More vacation rental companies have added security charges during the pandemic, according to Autohost, a company that provides guest-screening services for such companies. More hosts have complained about raucous parties and damage to their property during the pandemic. Security deposits on larger properties can run as high as $5,000, roughly double what they were before the pandemic. Damage waivers range from $25 to $50.
“These fees cover higher security costs,” says Roy Firestein, CEO and co-founder of Autohost.
The reasons seem sound. Autohost says the pandemic has caused an increase in high-risk bookings, including rentals to guests who throw destructive parties, use fake IDs and stolen credit cards, or use the space for criminal activity. So operators have installed noise sensors and cameras — and hired guest-screening services.
Guests could argue that security costs should always be included in the base price.
Travel agents are adjusting their fees, too. In the past, they relied almost exclusively on commissions from service providers to earn their living. However, since the covid-19 pandemic, many agencies are evolving to a “business consulting” model by incorporating fees for their professional services, time and knowledge.
TierOne Travel, based in Calgary, Alberta, is among those travel agencies that have seen commission revenue drop during the pandemic. In response, its travel advisers have doubled down on charges to travelers: booking fees, which range from $20 to $250, and change and cancellation fees of $40 to $100.
“These fees vary depending on the individual agent and the type of travel being booked, such as domestic flights, international flights, cruises and travel packages,” says Shelley Ewing, TierOne’s CEO.
Ewing says most customers are willing to pay the extras.
“They feel that the services and expertise their travel agent provides are worth the peace of mind,” she says. “Especially with the ever-changing travel rules and restrictions implemented since the pandemic, which their travel consultant can greatly help to mitigate.”
With airlines reinstating fees, some agents will probably be encouraged to keep their new ones. Historically, once customers accept a surcharge, it becomes an industry standard. The aggressive growth of hotel resort fees is a case in point.
There are exceptions. The Breakers, an independent luxury hotel in Palm Beach, Fla., stubbornly refused to charge resort fees before the pandemic. It continued to resist such fees in 2020 and remains fee-free.
“We would never use the premise of economic recovery opportunistically,” says Bonnie Reuben, a resort spokeswoman. “We do not feel justified in adding on charges to offset a post-pandemic loss of revenue, and we never did in the past during down-market periods.”
Of course, principles come at a price. Rooms at the Breakers start at $465 per night.
So this year, as you make your travel plans, don’t forget to ask about extra fees. When you get a price quote for a vacation rental or a hotel, find out if everything is included. Ask your travel adviser about any extras for cancellations or changes. And remember my words: Long after the pandemic is gone, many of these fees will still be with us.
Read more from Travel: Read past Navigator columns here