Fines for travel providers should match those providers assess against consumers
Imagine an accountable travel world where your cruise line or airline pays you if it fails to keep its schedule, you aren’t penalized for a canceled reservation if your hotel is able to resell the room and ticket change fees are related to the actual cost of changing your flight schedule.
Accountable travel is impossible, right?
There’s something about travel that’s profoundly unfair. It’s hard for the average traveler to articulate, beyond saying it just feels wrong. For example, if you’re late for a flight, you lose your entire ticket. If an airline is late, it doesn’t even have to pay a penalty. In fact, its contract of carriage — the legal agreement between you and the airline — specifically says the airline doesn’t have to keep its own schedule.
And take a look at how airlines are punished. American Airlines recently paid $250,000 in Department of Transportation penalties for failing to offer timely refunds to its customers. It is an example of how not to have accountable travel.
Consumer advocate Ben Edelman ran the numbers and found that American’s fine was laughably small; the latest DOT fine came to roughly .00000625 of the airline’s annual revenue, by his calculations. For the average American, that would be like getting a 35 cent speeding ticket.
“It’s pocket change,” Edelman says.
Turn the tables, though, and look at how the airlines punish passengers when they change their plans. Let’s say you want to reschedule a trip. A ticket-change fee can cost anywhere from $200 for a domestic ticket to a whopping $750 for international fares, a steep penalty that can exceed the value of the ticket. Airlines collected an eye-popping $2.9 billion in ticket-change fees last year.
“Penalties for ticket changes should be decreased,” says Jonathan Farley, a mathematician from Rochester, N.Y. He and other passengers say the double standards — we can cancel a trip, you can’t — should be removed and a more uniform standard applied. Which is to say, if a travel company calls off a cruise, flight, or tour, it should face similar consequences to the passengers who change their plans.
Ashley Raiteri, the chief information officer of AirHelp, a company that helps secure compensation for delayed airline passengers, notes that European consumer protection laws already compel airlines to take financial responsibility for delays and cancellations. “It is true that there is an imbalance,” she says. “And the balance ought to be shifted.”
Hotels also have double standards when it comes to accountabe travel. If a resort can’t honor a reservation, state innkeeper laws typically allow it to cancel your reservation without consequences. Many hotels will, as a courtesy, voluntarily send you to another property and pay for a one-night stay, but they are not required to by law, and they sometimes don’t. Yet they punish guests by charging a full night if they cancel their reservations or change their travel dates. And let’s not even start on the one-sided contracts that airlines, car-rental agencies, cruise lines and tour operators force you to agree to. One set of standards for them, another for you.
There are two schools of thought about reducing this inequity. One holds that market forces can pressure travel companies into creating fairer and more customer-friendly policies. For example, US Airways stopped including soft drinks in its fares several years ago after its passengers protested and competitors refused to follow the move. The other is that only the government can address this issue, especially given the lack of competition in some businesses.
I belong to the second school: Common-sense legislation that requires everyone to live by the same rules might help right the balance.
One possible solution is the proposed Forbid Airlines from Imposing Ridiculous Fees Act of 2016, which would prohibit airlines from imposing fees that are unreasonable or disproportionate to the costs incurred by the air carrier — specifically, fees for changes, cancellations and checked baggage. It also set federal standards for establishing a reasonable fee. The bill, introduced last spring by Sen. Edward J. Markey (D-Mass.), is still working its way through the system, most recently being proposed as an amendment to the Federal Aviation Administration reauthorization bill.
The sentiment behind the bill is sound: You can’t hold yourself to one standard and your customers to another. And that is true not only for airlines, but for the rest of the travel industry. There’s something almost patriotic about this kind of accountable travel, making the rules apply to everyone.
In the meantime, there are steps travelers can take to protect themselves. Cat Holladay, a small-business consultant based in Gainesville, Fla., says that her favorite workaround is joining frequent-flier or frequent-guest programs, which can lessen the penalties. When you need to change your plans, she says, “loyalty matters.” Selecting the right travel insurance policy can also protect you in the case of unexpected trip interruptions.
More drastic measures include driving instead of flying and staying with friends rather than at hotels. But if the invisible hand of market forces isn’t making the travel industry fair, then maybe thoughtful regulation can offer travelers a helpful hand.