The 11 Most Egregious Travel-Consumer Issues

The 11 Most Egregious Travel-Consumer Issues

From deceptive pricing to excessive fees to too-tight seating, travel-industry newsman Ed Perkins lists the 11 most egregious travel-consumer concerns, plus each issue’s resolution status.

1. Deceptive Hotel Price Advertising

Problem: Hotels in many popular vacation destinations regularly misrepresent their true prices. They carve out part of the true price, make it a mandatory “fee” with a plausible label such as “resort” or “facility” fee along with a list of services the fee supposedly covers, deduct the fee from the true price, post the remaining phony low-ball price as the “rate,” and add the fee back in later somewhere in the buying process. This is a scam that severely distorts the price-comparison process by as much as $50 a day.

Current Status: Nominally, the Federal Trade Commission (FTC) is responsible for policing deceptive advertising. The FTC sent out a letter urging hotel chains to disclose the fees, and most complied with token disclosures, but you still see lots of big-type price advertisements that do not include the full cost of a room. And, unfortunately, the practice remains and is spreading to city hotels. TravelersUnited has been urging the FTC to take more positive action, but unfortunately the FTC punted, claiming it could not actually enforce honest hotel advertisement unless given specific authority by Congress. Accordingly, because deceptive hotel pricing violates most states’ truth-in-advertising laws, TravelersUnited refocused its efforts on state attorneys general.

Outlook: Cautiously optimistic. Congress is extremely unlikely to give the FTC the authority it says it needs, so the main hope lies with the states. In the past, states have taken action against similar pricing scams, so the outlook is hopeful.

2. Excessive Ticket-Change Fees

Problem: Fees of up to $750 to exchange a canceled ticket are outrageous, and a severe pain point for air travelers. Often, when consumers have to cancel or postpone a trip, they do it because of some unexpected disruption in their lives. Just changing plans can add cost, and a huge fee to cancel and retain some dollar value of an air ticket amounts to airlines’ piling on travelers already under financial and emotional stress.

Current Status: The Department of Transportation (DOT) does not have statutory authority to regulate change fees on domestic tickets, but it does have authority to assure that international fares and fees are reasonable. Last year, FlyersRights filed a Petition for Rulemaking (Docket DOT-OST-2015-0031) requesting that the DOT enforce its authority to assure that international ticket-change fees are fair and reasonable, and TravelersUnited and the National Consumers League are also pushing the DOT to act. The Docket remains open, however, with no response yet from the DOT.

Outlook: Tough call. The applicable law says the DOT should act, but whether it will is anyone’s guess.

3. Nondisparagement Clauses

Problem: Some vacation-rental agreements and other accommodations contracts include clauses that forbid renters from submitting negative reviews to TripAdvisor, Yelp, or similar sites. These clauses give the property owner/manager the right to demand that a traveler remove a negative review and to assess a fee if travelers do not do so. Contracts containing non-disparagement clauses are clearly “contracts of adhesion,” where one party, in this case a consumer, does not have the opportunity to negotiate terms. If a property owner actually does take legal action, many courts throw out their complaints. Consumer positions, however, are uncertain.

Current Status: This is something of a “sleeper” issue, generating very little publicity, but it’s one consumers might actually win. California has already enacted a bill prohibiting state businesses from forcing consumers into contracts with non-disparagement clauses, and Congress is currently considering the Consumer Review Freedom Act that the Senate has already passed unanimously.

Outlook: Optimistic.

4. Consistent Airfare Displays

Problem: Consumers have a tough time comparing different lines’ fares on an apples-to-apples basis across different search platforms because of complex and inconsistent pricing: differing fees for optional services, bundling some fees into fare “brands,” varying fees for different consumers, and such. Third-party search systems are unable to locate, tabulate, and compare these many variations on a consistent basis.

Current Status: A major muddle. Many consumer advocates, along with the DOT, have been concerned with the problem and a consensus solution seems to have emerged. The DOT is working on a rule requiring that airlines display baggage and seat-reservation fees along with base fare displays. Major consumer groups support the DOT. Of course, the airlines oppose any suggestion that the current airfare search system is broken: “Just book through our own websites,” is their mantra, “Trust us, we have the best fares, and forget about comparing prices.” Yeah, sure.

Outlook: Optimistic. Even though they publicly oppose the idea, airlines are supposedly already working with the travel booking system, Global Distribution Systems, on implementation.

5. Protections for Oversold Hotel, Cruise, and Rental-Car Consumers

Problem: Federal regulations require airlines to compensate air travelers if an airline has to bump them due to overbooking. Although hotels and rental-car companies sometimes cannot honor a traveler’s reservation, however, their customers currently have no comparable protections under either federal/state laws or official industry commitments. And cruise contracts allow cruise lines wide latitude to change itineraries and miss ports without giving passengers the right of immediate full refunds, and the contracts make it extremely difficult for consumers to take legal action. At least so far, the hotel, cruise, and rental-car industries have failed to develop their own effective consumer protection standards:

  • Neither the big hotel and rental-car chains nor their industry associations have even made vague promises.
  • The Cruise Lines International Association (CLIA) developed a cruise customer “bill of rights,” but it’s vaporware: It makes glowing promises but provides no accountability when a line fails to meet any of the promises, and does not close any of the wide-open loopholes in cruise contracts.

Current Status: As far as I can tell, no major players in the consumer movement are seriously considering this problem, much less pointing to solutions.

Outlook: Bleak.

6. Domestic Airline Competition

Problem: Many consumers are concerned about a cluster of issues centered around the current lack of real competition among the giant domestic airlines. Among them are substantial differences among airlines in treatment of, and lack adequate compensation for, travelers on canceled flights, along with inconsistencies and uncertainties in fees and services among airlines on code-shared flights.

Some consumer groups advocate a return to the regulation-era “Rule 240” requirement for an airline to transfer canceled or delayed passengers to another airline when the second line can get the traveler to his or her destination earlier than the original line. Also, consumers are concerned about possible collusive pricing and capacity behavior among the four giant lines that control 80 percent of domestic air travel, the survival of independent airlines, giant-line hoarding of “slots” at controlled airports, and the anticompetitive effects of domestic and international immunized alliances.

Current Status: At this point, consumer-interest organizations are addressing several of these issues, but so far with little traction. Airlines, of course, counter any new proposals as “excessive” regulation. “Let the marketplace decide,” they say, without acknowledging that the current airline marketplace is stacked against consumers.

Outlook: Doubtful. Consumer-interest organizations will coalescence around one or more of these issues or a combination of issues, with recommendations to come. Expect strong airline opposition.

7. U.S. Airline Protectionism

Problem: U.S. airlines are pressuring the State and Transportation departments to restrict supposedly “open skies” access to U.S. routes for some foreign lines. Specifically, they’re calling for (1) limitations on U.S. flights by the big three Gulf airlines, Emirates, Etihad, and Qatar, claiming these lines receive “unfair” subsidies from their governments, and (2) they’re pressuring the DOT to deny Norwegian’s request to use an Ireland-based subsidiary for flights to/from the U.S.

Current Status: Pending. The DOT is still sitting on Norwegian’s application, with no indications of when it might act. As a non-lawyer, my reading is that the U.S. has longstanding “open skies” agreements with the Gulf nations and Ireland, so that the domestic airline position basically calls for the U.S. to abrogate legal and treaty obligations. Consumer interests generally favor continuation of open skies policies and encourage both the service-based and price-based competition that foreign airlines provide, but the big U.S. lines have a lot more political clout than the four foreign lines, plus they have support from some U.S. airline labor interests.

Outlook: Murky.

8. Air Traffic Control Modernization

Problem: Despite the availability of technology and having spent a potful of money, the Federal Aviation Administration’s (FAA) progress in updating the nation’s air traffic control (ATC) system has been glacially slow, resulting in excessive delays, lengthened flight times, and higher fares. Critics blame the culture and management of the FAA, along with its dependence on annual budgets from Congress. They propose splitting the ATC function out of the FAA and into an autonomous publicly-owned operation such as TVA, funded by user fees rather than taxes and managed by a board that would include consumer representation.

Current Status: Proponents cite the need to take ATC funding out of the yearly budget politicking and occasional Congressional micro-managing, instead funding it entirely by user fees. They cite the success of the independent NavCanada. Opponents label the move “privatization,” even though it would not place the ATC in the hands of a private company. The most vocal opposition comes from politically powerful general aviation and business aviation interests, both of which fear that an independent public operator would favor airlines over other airspace users. On balance, consumer interests seem to favor the independent option, although support is far from unanimous. One stumbling block is the worry, far from remote, that if ATC funding does shift fully to user fees, the government will retain current ticket taxes for general revenue.

Outlook: Highly uncertain.

9. Frequent-Flyer Program Abuses

Problem: Airlines hold all the cards—including legal ownership of “your” miles—and are free to devalue programs, limit the number of seats available at the lowest mileage levels, add fees to award travel, and basically do whatever they want without consent of the frequent flyers in their programs and without any governmental oversight. Frequent-flyer membership is the most one-sided contract most people are likely to sign in their lifetimes. And currently, several big lines are actively devaluing programs.

Current Status: This is another issue about which most consumer-interest organizations agree, but the only active consumer effort is focused on peripheral disclosure and traveler-treatment issues rather than the fundamental problems of miles ownership and inadequate seat availability.

Outlook: Improvements unlikely any time soon.

10. Too-Tight Economy Seating

Problem: Typical coach/economy seats provide inadequate front-to-rear legroom and working-/reading-area space for most travelers, and according to anthropometric studies, the seats are at least two inches too narrow to accommodate the average American male traveler.

Current Status: Airlines say (1) that more per-passenger seat room equals higher per-passenger costs equals higher fares, and (2) that American travelers have decisively shown they will put up with the worst sorts of seating to cut a few dollars off the fare. “If they want more room,” the lines say, “we have an extra-legroom, extra-fare cabin for them.” Consumer advocates are focusing on the safety implications of ultra-tight seating. They note that neither the FAA nor any comparable foreign agency has tested whether travelers in those seats would be able to meet the 90-second standard for evacuation from the cabin in a survivable accident.

Outlook: Questionable. Government agencies currently test emergency evacuation with computer models, which they say are sufficient. And, at a practical level, nothing can be done about too-narrow seats in the ubiquitous 737 and A320 families: The cabin width is fixed, and going from the current six-across to five-across would increase costs beyond any reasonable level.

11. Barriers to Legal Recourse

Problem: If you have a case for taking legal action against an airline, current federal law limits you to federal court, a limitation that, in many regards, effectively bars most legal action. Also, many transportation contracts prohibit consumers from participating in class-action lawsuits, require arbitration of disputes rather than court action, and include “forum clauses” that limit court action to venues that might be remote for many consumers.

Current Status: TravelersUnited is urging Congress to mandate that consumers having claims against an airline of less than $80,000 could transfer jurisdiction to local state courts. And some advocates believe any new law should also ban clauses preventing class action participation, mandatory arbitration clauses, and forum clauses.

Outlook: Doubtful. So far, this issue has remained largely under the radar, with very little concerted effort. Any consumer relief is, at best, years in the future.

Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuses every day at SmarterTravel.

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