Feeling Fleeced by Taxes and Fees? - Macleans.ca

Feeling Fleeced by Taxes and Fees?

You’re not alone!


Whether it is an overseas airline ticket, or a seven day all-inclusive vacation, we feel battered by sticker shock by the time we get the final tally. Where did all those extras come from?

Air Tickets: Multiply by 2

The airlines have no control over the taxes but they do determine their own fuel surcharges and some fees.

A fare quote I recently searched to London, England from Winnipeg displayed at $512 return, until the additional airline charges for taxes, fees, charges, and surcharges were tallied. At $487 dollars, my fare had suddenly doubled. I felt duped – and I’m in the business.

The exact same itinerary on Aeroplan points tacked an extra $569 in charges onto my ticket — with no breakdown of what made up the wrist slapping fee. Only after cancellation did I learn that of the $569, fully $369 was for Carrier Administrative Service Charges. Roughly translated, this catchall phrase masks fuel surcharges and anything else the airline chooses to impose as a booking fee.

Advertised prices for package tours seem really low right now

Checking the taxes and surcharges with tour operators is a much more daunting task but, like the airlines, they are subject to certain government taxes that they can’t avoid.  However, non-tax fees and surcharges are a different matter. Some operators include these fees in their prices and some add them as extras.

With so many apparent deals to southern destinations, ads lure us to believe we can fly, sleep, eat, drink and beach for under $800. Using Toronto to Cancun as my base comparison, I found a 4 star property on line for only $777. The taxes and service charges totaled $272 — a third more than the original price.

Strangely enough, it did not matter whether the price for the vacation was $800 or $1800 the ‘taxes’ were still $272 – considering taxes are usually a percentage of the price, there was no way to understand the math. The one exception was on the WestJet Vacations site where the extra charges were only $120.

It’s no wonder consumers are skeptical about travel pricing – feeling caught in a ‘deal or no deal’ guessing game. The travel industry does itself a disservice in confusing and frustrating consumers.

Why are fees and taxes not regulated?

It is astounding that an ordinarily legitimate item such as a ‘surcharge’ can shelter a variety of items from administration to fuel. Shouldn’t those be built into the price?

According to ACTA, the Association of Canadian Travel Agents, the federal government has an obligation to get involved. However, federal versus provincial jurisdictions for travel products hamper finding an across the board solution.

A few years ago ACTA was part of an industry wide lobby effort which resulted in airlines voluntarily agreeing to show all inclusive pricing in ads for domestic flights. But, for competitive reasons, international fares are not covered by this agreement.

ACTA is now lobbying for all inclusive pricing in all travel advertising, and transparency for what each individual charge represents.

Are taxes really taxes? What’s a service fee? And do fuel charges have any relationship to the cost of oil on the international market, even with forward contracts, common in the airline industry?

Beyond the obvious practicality of regulating travel pricing, ACTA also wants to remove perceived travel agent culpability in collecting the extras. The front line agent takes the brunt of consumer anger over surprise charges which smack of ‘bait and switch’ gimmicks. In realilty, the travel agent not only has no control over the additional fees, but sees these actions by airlines and tour operators as a way of reducing the commissions they pay travel agencies.

Ultimately, we are all on the receiving end of a mismanaged system – where travel companies are compelled to keep advertised prices low in order to compete in a cut throat marketplace. The only way to level the playing field is with government imposed rules which will eliminate the $99 come on.

By Ron Pradinuk
Ron Pradinuk is president of Journeys Travel & Leisure SuperCentre, a travel products retail outlet www.journeystravelgear.com , as well as Winnipeg based Renaissance Travel. He is past national president of the
Association of Canadian Travel Agencies.

Photo Credits: Franck-Boston, volschenkh

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