People who travel outside the United States know that this isn't the way that travel has to be. In many other countries, the price you see on a menu, an itinerary, or a price sheet is the price you actually pay. There's no need to do math in your head... and no surprises when the final bill arrives. Taxes and fees are built into posted prices, so that everyone knows what their payment will be in the end.
That's not the way that pricing works in America, however. Taxes are computed at the register or check out, and over the years, many businesses have taken advantage of that to add on various private charges of their own, as well.
Mandatory resort fees started showing up on hotel bills about a decade ago, travel columnist and consumer advocate Christopher Elliott said. "When the FTC [Federal Trade Commission] declined to stop hotels from adding them to the final price, hotels saw that as a green light from the federal government," he said. "So we've seen them increase significantly in the last year or two."
Many Disney fans have appreciated the company not playing the resort-fee game, and they've been willing to pay higher up-front rates for Disney hotels in part to avoid the back-end surprise when checking out from other resorts. But if Disney starts adding resort fees, those attitudes might change.
"If I have to start paying resort fees to stay on property, it will no longer be a value to me," one reader wrote in our previous post on Disney resort fees. "I'll go off-site instead."
Ultimately, for most tourists, it's not about the money — it's about the deception. If we know the prices for competing rooms, flights, meals, and travel amenities, we can compare those prices against the relative quality of each to make our decisions about which purchases will provide the best value for our money. We sometimes pick the higher-priced option, too. Smart travelers know that the lowest price isn't always the better deal.
But when final prices are hidden by undisclosed or cleverly hidden taxes, fees, and surcharges, it's hard for us to make a fair decision. Worse for the travel industry, the knowledge that we don't know the final price for anything leads many of us to fear spending on extras during our vacation, just in case we get hit with bills that were higher than we expected. A @ThemePark Twitter follower from the United Kingdom concurred:
@ThemePark Agreed, would help tourist market as it does make visitors from UK hold back a little when spending for fear of the final price!
— Mark (@kidgarrett) March 10, 2016
One frequently-cited justification for the current system is that varying state and local tax rates across the country would make it impossible for national retailers to advertise a single price if that price had to include all applicable taxes and fees. But that's no excuse for why travel search engines can't sum up the charges for a specific hotel or flight when presenting us with a price to consider. Or why restaurant menus or in-store merchandise labels can't just tell us the final price for each item. (Let's not get started on the whole issue of tipping, except to say that we could write another post on that, too.)
Heck, in an era when more and more advertising — and more and more pricing — are tailored to individual consumers, how many businesses run national ad campaigns that cite a single price anymore, anyway?
By keeping some charges out of view, travel businesses are angering their customers... which might be encouraging those customers to spend less, not more, on travel. That's not good for businesses in the travel industry, and it's not good for consumers who just want to get a fair deal and have a great time on their vacations. I love the clarity of up-front pricing abroad and would love to see this practice come to America someday, too.
Tweet
http://disneydaybyday.com/wp-content/uploads/2015/08/Favorite-Food-Friday-Disney-Food-Cart-DisneyDayByDay.jpg
Actually, the real truth is there are customers who don't care what the price is, they'll pay (even if they can't really afford it). I don't know what's worse: the company that sees the carloads of guests as rolling piggy banks, or the guests willing to spend big because they think it's a "rite of passage" or can't live without it? The two are symbiotic, enable more outrageous spending opportunities, and cause an endless cycle of one-upmanship.
Shops have the option to include or add it to the price. People remember the price on the label and many just pick the lowest listed price. Not to mention people really remember the first digits so 1.95 sounds much better than 2 bucks. Doesn't have to make sense to be true.
Perception Trumps fact. But the perception is changing. But pricing won't change until People change how they act. Look at baggage fees. Southwest has none on normal load. Most airlines charge every bag. And then there's Spirit which charges fees for everything short of pay toilets. . Southwest has a loyal following, but so does Spirit. In the end, there's a market for both approaches. With some work, you come out ahead at one of the extremes.
I don't understand the argument of its too complicated to do it for each state and tax area, no it's not, the cash machines are programmed with the tax for each state, this can be easily reproduced on a pricing gun or barcode machine.
Keeping the price and the tax separate allows transparency in how much the tax is actually costing the consumer. It will be part of the reason as to why sales taxes are generally much lower in America than they are in Europe.
Tourists having a bit of a shock the first time they buy something is a small price to pay for the thousands of dollars American families save annually in not having to pay higher taxes.
You can make a reservation at a Holiday Inn outside the WDW Resort and then rent a car at the airport, drive to the hotel, drive into the WDW Resort everyday, fight traffic, pay for parking and then walk to the gate.
Or you can make a reservation within the WDW Resort INCLUDING any associated fees and then just relax while you utilize the WDW Resort transportation system, starting at the airport!
KNOWLEDGE AND CHOICE EMPOWER THE CONSUMER!
Dave, could not agree more, being from the UK it seems strange not to advertise the price you pay at the till, you go to buy some thing and think you have enough money only to find you have not, wonder how many times people go to pay who are outside these states and they realise they don't have enough and tell the sales assistant they no longer want the item, must add extra work time from that alone to justify not to advertise the price without the taxes, seems a really strange way of doing business to me.
With regard to taxes, including them or not is very much a political thing. One argument goes that, when taxes show up on most every receipt, people are more likely to notice when politicians hike the rate. That may not be true on your vacation when you're away from home, but it's certainly something many people pay attention to at home. Obviously, it's less convenient to have tax as an add-on, but the nature of politics often involves a tradeoff. What some would call "inconvenient" others would call "transparent."
I'm somewhat surprised you didn't point out rental cars, where the combination of taxes, concession recovery fees, and numerous other "below the line" charges can add 30-50% to the quoted price of a rental. I've always found that to be one of the more egregious situations, where government taxes are levied alongside vendor "fees" (like concession recovery) that should be built in.
Oddly, taxes are included in some transactions, like airfare - and again, many make a strong argument that those taxes should be broken out. Same with gasoline. People complain about the high prices of gas, but rarely realize that almost a third of the pump price is actually going to the government. The government is happy to let the "rich oil companies" take the blame, though, which is why taxes are never called out as line items. In fact, you include flights in your statement that there's "no excuse for why travel search engines can't sum up the charges," when in fact they all do so for airfare. Expedia and others have tried to do so for resort fees, and at least try to call attention to properties that charge resort fees, but the resorts typically fail to disclose those fees in their reservations systems, meaning the travel sites have no way of including those in the sum.
Making the hotel resort fees are an entirely different animal. If a resort fee is in fact a "bundle" of amenities THAT YOU CAN OPT TO PURCHASE, then you can obviously decide if it's valuable or not - and that's how many resort fees began, back in the day. Making them mandatory is just deceptive, and it's simply - as you point out - so that properties can advertise a low-low rate while still making a designated profit margin. At least with taxes, you have an expectation - US citizens know that taxes aren't included, and we've grown up with that, and the tax rate itself isn't a surprise to anyone who lives in an area.
I'll suggest that taxes are never "cleverly hidden," as you wrote. True, to someone from outside the US the add-on of taxes is unusual, but there are plenty of customs in those countries that would perplex a US citizen. We have different systems. Taxes *should* be up-front and predictable - in any event, they're rarely "deceptive" if you understand the basic system that pervades the entire US. Even "tax free" states - e.g., those lacking a standard sales tax - often have other retail taxes like on hotel rooms, rental cars, and so on. Those from outside the US might not comprehend why every state has its own system, but that's at the very foundation of our system of government.
I'll never argue that resort fees, however, are anything but a deceptive cash-grab unless they're optional. As a conveniently priced package of services or amenities, sure - as something that's added to my bill without my approval, and which include things from which Ic cannot opt out, they're deceptive. Whether I choose to visit someplace that charges resort fees is very much a case by case decision, but it's absolutely part of my decision making process.
The article seems a little biased toward someone from outside the US, and I think if you remove that bias you can make a clear distinction between situations. Taxes can be confusing no matter where you go, if you're not from there. Yes, different countries have different taxation systems. Nearly everything else about our governments differs, too. But things like resort fees are uniformly unfair, when they're used. It is a shame that the US system of "consumer protection" allows them to persist, when in many other countries they are, or would be, outlawed.
But my dislike for hotel resort fees does NOT equate to a wish that my government-mandated taxes be cleverly disguised as part of something's actual price, which is what you're actually advocating for.
This article has been archived and is no longer accepting comments.
