It’s the peak of summer, which can also mean peak “junk fee” season.
These fees are those last-minute charges that show up during the final stages of payment for event tickets, vacation rentals, and other services. No matter the name they go by—service charges, convenience fees, or processing fees—they all can make it difficult for consumers to understand the true cost of a purchase up front, and can cost U.S. shoppers billions annually.
Such charges entered the spotlight last year after consumers fought through TicketMaster’s sky-high prices and long wait times amid overwhelming demand for tickets to Taylor Swift’s Eras Tour. The debacle caught lawmakers’ attention, leading President Joe Biden to meet with Ticketmaster parent Live Nation Entertainment, Airbnb, and others in June. The companies pledged to implement an “all-in pricing” model this September, allowing customers to see a ticket’s full cost, including fees, before reaching the checkout.
If the White House has its way, more fee regulation could be on the horizon. Here are some of the industries, companies, and charges that could be affected.
Live Event Ticketing
Live Nation
(ticker: LYV) became a prime example of these fees with the Eras Tour ticket fiasco last year. Some nosebleed tickets to see Swift topped $1,000 because of TicketMaster’s dynamic pricing model, which adjusts a ticket’s cost—and as a result, the corresponding fees—based on demand.
Last month, the company said it has been “advocating for all-in pricing to become law for many years.” Fellow ticketing giant SeatGeek has also faced criticism over fees and promised to implement all-in pricing.
The average ticket’s service fee equals about 27% of its face value, the Government Accountability Office estimated in 2018. For example, tickets to see Stevie Nicks in Pittsburgh this fall start at $95 on Ticketmaster. But a $29 service fee, $5 facilities charge, and $7 order processing fee bump the final price by 43% before taxes.
While venues set service and facilities fees, Ticketmaster keeps a portion to handle operating costs for technology and employees, a Live Nation spokesperson told Barron’s.
“If these fees went down, venues may have to charge artists more nightly rent, which would likely result in higher face-value ticket price,” the spokesperson said.
Vacation Rentals
Vacation-rental platform
Airbnb
(ABNB) has also come under fire for its various fees.
In addition to an Airbnb stay’s nightly rate, the host’s cleaning fee, and occupancy taxes, customers must pay the platform’s service fee. The company’s website says most of its service fees total less than 14% of the booking subtotal, which includes cleaning fees. The service fees cover Airbnb’s liability insurance costs and other “products, services and support,” a company spokesperson told Barron’s.
The platform rolled out an all-inclusive pricing tool in December, which allows users to toggle and see the total cost of their stay before taxes, rather than just the base nightly price.
However charges are displayed, they still add up. A weekend stay at a condo in Naples, Fla., costs $274 before fees on Airbnb. But with a $147 cleaning fee and $60 Airbnb service fee, the price of the stay balloons roughly 76% to $481, excluding taxes.
Hotels
Vacation rentals aren’t the only getaways adding charges. Many hotels, including from international brands like
Hyatt Hotels
(ticker: H) and
Hilton Worldwide Holdings
(HLT), add resort fees onto their nightly rates for amenities such as Wi-Fi, parking, pools, and gyms—particularly among higher-end properties.
Some states have taken action against these charges. In May, Texas Attorney General Ken Paxton filed two separate lawsuits against the Hilton and Hyatt hotel chains for advertising hotel prices that didn’t display all fees, which he called “a lack of transparency.”
Hyatt plans to begin displaying all-in room rates for hotels in the Americas “very soon,” a company spokesperson told Barron’s. A
Hilton
spokesperson said mandatory fee decisions are made at a property level, but stressed that added charges are always fully disclosed on the company’s booking channels.
Earlier this year,
Marriott
opted to bundle its resort fee with a room’s nightly rate to show an “all-in price” at booking, after Pennsylvania’s attorney general fined the hotel operator over its resort fee transparency.
“We have long been focused on ensuring that any resort/destination fees charged by hotels are separately and clearly stated,” Marriott said in a statement to Barron’s. “We recently made changes to update our room rate display and further enhance the way these fees are disclosed, leading the industry on this important issue.”
In a 2022 analysis of hotels owned by six major chains, personal finance site NerdWallet reported that
Wyndham Hotels & Resorts
(WH) charged the most expensive resort fee relative to its room rates—equaling as much as 6.5% of its average nightly room price—usually totaling between $30 and $50.
For instance, Barron’s found that a $129 one-night stay at Wyndham’s New Yorker Hotel in Manhattan adds a nightly resort fee of about $33 for access to a business center, gym, and other amenities, according to the company’s website. Access to a fridge and coffee maker in the room tacks on another $80 in fees.
Resort fees aren’t overwhelmingly common at most of Wyndham’s hotels, including its economy and midsize locations, a company spokesperson told Barron’s. Those that do have such charges prominently disclose them before booking, the spokesperson said.
Airlines
Airlines have become well-known for peppering charges across passengers’ travel experience—with extra fees for baggage, seat selection, and Wi-Fi.
Budget airlines like Frontier and
Spirit Airlines
(SAVE) often offer cross-country flights for less than $100, but their more affordable rates typically include fewer amenities.
Frontier Group Holdings
(ULCC), for instance, allows passengers to have one personal item each flight, then charges an average of $58 for each checked bag and $63 for a carry-on, while seat selection adds an extra $23, according to a NerdWallet analysis. Those fees combined result in additional charges averaging about $147 for a one-way, domestic Frontier flight.
Frontier has long positioned itself as an “unbundled” carrier, where consumers pay an upcharge for each amenity. Travelers can cut some costs by bundling their seat selection and baggage fees. Frontier didn’t respond to requests for comment.
Of course, many other airlines tack on additional fees during the flight booking process. Spirit tacks on a fee for all seat selection on flights, while other competitors often charge more for favored seating. The majority of carriers also charge customers a separate fee for their checked baggage.
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