NEC Report Criticizes the Hefty Hidden Fees Levied Across the Service Industry
Blurb: The National Economic Council has denounced the sneaky fees and charges that are so prevalent in the airline, hotel and wider travel industry.
America’s National Economic Council (NEC), the body set up to advise the executive on both global and domestic economic issues, has criticized the levying of hidden fees and charges across the nation’s service economy and especially within the travel sector.
In a report entitled, The Competition Initiative and Hidden Fees, the body, which is composed of numerous departments from within President Obama’s administration, stated that, “Accurate pricing is the backbone of an efficient and consumer-serving marketplace.”
But, it added, “in a number of consumer-facing sectors, the real prices of things are now being hidden or muddied by the addition of mandatory fees…Quoted prices don’t reflect what things actually cost – the real prices are hidden by fees.”
The aim of the body’s report is to raise wider consumer awareness of the prevalence of these fees. While these charges are commonly levied in the banking, automotive and telecommunications industries, the report highlights that these charges are especially prevalent in the travel sector.
Sly airline, resort and baggage fees were all called into question, with the council noting that the latter added up to “$22.5 billion in revenue in 2015” alone. But, it also stated that, “Like many businesses, many airlines charge fees that are both mandatory and optional, and some that are in a gray zone between the two.”
However, the report also reminded consumers that, under Department of Transportation (DOT) regulations, “…carriers and travel agents must advertise “the entire price to be paid by the customer to the carrier.” This price, it explained, should include any and all fees and surcharges.
The body also said that while much progress has been made under the present administration in terms of increasing competition for consumers, there is still more that could be done to bring transparency of pricing to the masses.
On the White House blog, Charlie Anderson, senior adviser to the director of the NEC, concluded that the report “provides a roadmap for policymakers, companies, advocates, and the research community to build on our efforts to date and continue to promote competition throughout our economy.”
[Photo: Shutterstock]
One of the reasons why I find it always nice to get back to Australia from the US is that the prices labelled or advertised is actually the money you have to pay. At a US hotel recently, the breakfast was on special for $9.95....NOT!. It was actually around $13. To have to do research on everything you buy in the US is just so tiring.
"much progress has been made under the present administration in terms of increasing competition for consumers," Umm.... since 2008 there have been 90 US airlines which have folder/merged with others. How is 90 fewer airlines 'increasing competition'? Realistically, looking at the majors, we've lost: US Air, ATA, Continental, Northwest. Still, these weren't small operations. If the administration was serious about increasing competition, they'd let the ME3 fly domestic routes in the USA.