WHAT IS THE REAL PRICE?
Service providers take customers for a ride by tacking on hidden fees to the advertised price. Here are some of the biggest culprits that are eating into your spending budgets.
TRAVEL
The travel and tourism industry is a minefield of hidden charges. “Price transparency is a key issue for the tourism industry,” admits Vishal Suri, CEO, tour operating, Kuoni India. According to a recent report, the airline ancillary revenues worldwide crossed $27 billion in 2012, a year-on-year surge of 19.6%. “The Indian government opened the ancillary revenue floodgates by blessing the adoption of a la carte pricing for an industry serving more than 1.2 billion people,” states the report.
What does this mean for domestic fliers? Think sundry charges, such as seat selection fees, food and beverage charges, additional charges for seats with more leg room, faster check-in fees, lounge fees, and the like. It’s acceptable, since you pay for what you want, but what explains the draconian baggage fees, convenience fees for online bookings, and transaction fees for offline ones?
In the good old days, a smile would let you squeeze some extra weight in your checkedin baggage. Now, even your cabin baggage gets weighed, and if it’s over 7.5 kg, you have to check it in. “We will see checked-in baggage fee introduced very soon,” predicts Karan Anand, head, relationships, Cox & Kings Ltd.
Then there’s a new CUTE fee of `50-100. This refers to Common Use Terminal Equipment, a software and network airport solution that facilitates the check-in process, and passengers now have to bear this cost.
The most annoying charge, perhaps, is the convenience fee, which typically ranges between `100 and `300, but is never included in the advertised price. While some service providers mention it in small print under the fare summary, others like Expedia, Cleartrip and MakeMyTrip wait till much later in the buying process to disclose it.
Such charges are only going to go up in the future. “We have not seen the full impact of the recent move towards unbundling of air fares,” cautions Anand. This is not a detrimental move, but the trouble is that it has not only increased the real cost of a flight, but also raised the risk of landing a lemon deal. Says Pawan Chandra, marketing head, TUI India: “Customers should research thoroughly before committing to any financial transaction.” Don’t compare advertised prices, but the final ticket price. Yes, you will end up spending a lot of time and effort, but you will save money in the bargain.
The travel and tourism industry is a minefield of hidden charges. “Price transparency is a key issue for the tourism industry,” admits Vishal Suri, CEO, tour operating, Kuoni India. According to a recent report, the airline ancillary revenues worldwide crossed $27 billion in 2012, a year-on-year surge of 19.6%. “The Indian government opened the ancillary revenue floodgates by blessing the adoption of a la carte pricing for an industry serving more than 1.2 billion people,” states the report.
What does this mean for domestic fliers? Think sundry charges, such as seat selection fees, food and beverage charges, additional charges for seats with more leg room, faster check-in fees, lounge fees, and the like. It’s acceptable, since you pay for what you want, but what explains the draconian baggage fees, convenience fees for online bookings, and transaction fees for offline ones?
In the good old days, a smile would let you squeeze some extra weight in your checkedin baggage. Now, even your cabin baggage gets weighed, and if it’s over 7.5 kg, you have to check it in. “We will see checked-in baggage fee introduced very soon,” predicts Karan Anand, head, relationships, Cox & Kings Ltd.
Then there’s a new CUTE fee of `50-100. This refers to Common Use Terminal Equipment, a software and network airport solution that facilitates the check-in process, and passengers now have to bear this cost.
The most annoying charge, perhaps, is the convenience fee, which typically ranges between `100 and `300, but is never included in the advertised price. While some service providers mention it in small print under the fare summary, others like Expedia, Cleartrip and MakeMyTrip wait till much later in the buying process to disclose it.
Such charges are only going to go up in the future. “We have not seen the full impact of the recent move towards unbundling of air fares,” cautions Anand. This is not a detrimental move, but the trouble is that it has not only increased the real cost of a flight, but also raised the risk of landing a lemon deal. Says Pawan Chandra, marketing head, TUI India: “Customers should research thoroughly before committing to any financial transaction.” Don’t compare advertised prices, but the final ticket price. Yes, you will end up spending a lot of time and effort, but you will save money in the bargain.
HOTELS
Sundry charges have crept into hotel tariffs in recent years. Some charges are legitimate, such as Wi-Fi usage, laundry and eatables from the mini-bars. However, the final bill in hotels around the world is seeing a host of pesky additions. According to the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, American hotels alone are expected to collect $2.1 billion ( 13,230 crore) from fees and extra charges in 2013.
Take the ‘resort fee’ charged at the time of checking out. You would think that when you stay in a resort, you are also paying for using facilities such as tennis courts, swimming pools, beach cabanas and gyms. You would have picked a budget hotel if all you wanted was a bed, right? But some resorts, particularly abroad, disagree. In an attempt to appear competitive, the advertised room rate typically does not cover this fee, which can hike your final hotel bill by up to 30%. Too bad that you are unlikely to get a waiver on the grounds that you did not use any of the covered facilities. “There are also high or peak season surcharges. These are quite ridiculous and not fair to the consumer,” says Suri. If the mini-bar in your room has a sensor installed, you need to be all the more careful. It will automatically bill you for any item you remove, even if only to see the brand name. You would not even know about it unless you studied the final bill carefully at the time of checking out.
Sundry charges have crept into hotel tariffs in recent years. Some charges are legitimate, such as Wi-Fi usage, laundry and eatables from the mini-bars. However, the final bill in hotels around the world is seeing a host of pesky additions. According to the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, American hotels alone are expected to collect $2.1 billion ( 13,230 crore) from fees and extra charges in 2013.
Take the ‘resort fee’ charged at the time of checking out. You would think that when you stay in a resort, you are also paying for using facilities such as tennis courts, swimming pools, beach cabanas and gyms. You would have picked a budget hotel if all you wanted was a bed, right? But some resorts, particularly abroad, disagree. In an attempt to appear competitive, the advertised room rate typically does not cover this fee, which can hike your final hotel bill by up to 30%. Too bad that you are unlikely to get a waiver on the grounds that you did not use any of the covered facilities. “There are also high or peak season surcharges. These are quite ridiculous and not fair to the consumer,” says Suri. If the mini-bar in your room has a sensor installed, you need to be all the more careful. It will automatically bill you for any item you remove, even if only to see the brand name. You would not even know about it unless you studied the final bill carefully at the time of checking out.
SUSHMITA
CHOUDHURY AGARWAL ETW130916
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