Ed Perkins on Travel: Crazy Fees

Rental companies have to pay a number of fees to keep business going.

Car rental signs. Dreamstimes/TCA

I can’t think of any business where suppliers add on so many different fees to the displayed price you have to pay. And despite the notoriety of hotel resort fees, I believe car rental companies are the worst.

Recent posts in the travel blogosphere report of a hotel’s adding a mandatory daily parking fee for all guests—even those who don’t use a car or park there. Another hotel even adds a mandatory “valet fee” whether or not you use the service or even have a car. These fees are not chump change—up to $25 a day plus tax, in one case.

What are car rental companies and hotels actually doing? They’re creating lists of some payments they have to make as the cost of doing business, identifying them, deducting the total amount from the true price, and displaying the resulting low-ball figure as the “price” in rate displays and comparisons posted to the public. Travelers United cites a list of such fees it has encountered.

• Tourism Commission Recovery Fee
• Concession Recovery Fee (yes, the airport gets a cut)
• Customer Transportation Fee (for that “free” shuttle)
• Parking Recovery Fee (they have to park those unrented cars somewhere}
• Premium Location Charge (airports, and in Europe, rail terminals)
• Energy Surcharge
• Vehicle License Recovery Fee
• Air Conditioning Recovery Fee
• Seasonal Tires Fee

Many, but not all, are legitimate payments the rental companies must make, and many are related to airport operations. But they’re all part of the cost of doing business as a rental car company, just as buying tomatoes is part of the cost of doing a grocery business, not a separate item warranting a “tomato fee.”

Why do they do it? They usually don’t talk about the practice, but it appears there are two reasons: (1) to deceive consumers about their true prices in initial price searches and (2) to cheat some suppliers paid at a percentage of the price.

Airlines would do it, too, and did for a while. But the Department of Transportation issued a rule requiring full-fare fee-inclusive posts. Unfortunately, no federal agency has the clout to issue similar rules in other industries. Enforcement is left to the glacially slow and comparatively toothless Federal Trade Commission and the states.

So it’s news that Travelers United, a leading private, independent consumer-advocate organization, is suing the Avis/Budget combine for deceptive advertising of “junk fees” under District of Columbia consumer protection regulations. Especially interesting is that the lawsuit asks not only for compensatory damages but also for punitive damages as well. A hefty hit in the treasury of a giant rental company could have a most favorable outcome for the entire problem.

Meanwhile, as a traveler, you have to go on renting cars. Can you avoid the scam? Sometimes you can. Renting off-airport usually avoids some fees, but you have the extra costs of getting between the off-airport lot and the terminal. And if an off-airport agency drops you off and picks you up at an airport terminal, it must generally pay the airport the same fees as on-airport rental desks in order to have authority to use its vans at the airport.

Although you can’t avoid paying all the fees—one way or another, some are baked into the system—you can avoid any deception. Just do your price searches on a metasearch system or online travel agency. Most offer an option or filter to display all-up prices—it may not be the default option, but it’s there.

Getting enough action to get rid of the junk fee scam nationwide is still problematic. There’s no guarantee that Travelers United will prevail in its lawsuit, or Avis/Budget may file an endless round of appeals. But similar moves are stirring in individual states as well as Washington, DC. Yes, there is hope.

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