How to: Limit Ancillary Fees

Objective:

How to Limit Ancillary Fees

Ancillary Fees. You know the term far too well.  It seems extra unexpected costs are associated with every trip you take. From baggage fees to hotel cancellation fees to city surcharges, the airline, hotel, and ground transportation industries are all making billions of dollars off these sometimes cleverly hidden fees. But as your Travel Management Company, we’re here to help you limit those pesky fees as much as possible!

According to a study conducted by the consultancy group IdeaWorks, in which 63 airlines were examined, airlines made $38.1 billion USD from extras in 2014. That was up 20.9% from $31.5 billion USD in 2013!

It’s not any different for hotels. U.S. hotels are projected to make a record $2.47 billion USD this year from fees and surcharges that require guests to pay extra for everything from early check-in to using the in-room safe, according to a new report. In 2014, hotels collected $2.35 billion USD in fees and surcharges, says the report’s author, Bjorn Hanson, clinical professor at the New York University School of Professional Studies, Tisch Center for Hospitality and Tourism (USA Today).

Strategy:

Take some tips from Kelly Wagner, our Director of Consulting Services at World Travel, Inc. “Typically, airlines do not waive the ancillary fees during contract negotiations, however service funds can be requested to be included, which allows for upgrades, waivers/favors. Additionally, we try to negotiate some status upgrades and lounges passes during the contracting process.”

Wagner also has insight into the hotel negotiating process. "We always try to negotiate value-adds to be included in the rates we secure, things like breakfast, Wi-Fi, parking, bottled water, and more. We also look at cancellation policies to see if we can reduce them to 4 PM day of arrival.”

But what about car rental companies? Wagner's department has an angle for them, too. “We look to secure reduced city surcharges, one-day surcharge removal, and set one-way rates. We also look to have rebates included and status matches for all travelers.”

Challenge:

Ready to take action?  Here is a few tips on what to do to reduce your ancillary fee damage:

  1. Maximize leverage with preferred carriers - that's a fancy way of saying encourage travelers to book consistently with your preferred airlines. Leverage will assist with frequent flyer status for travelers and will help savings of ancillary fees included with status.
  2. Ensure your travel policy addresses inflight Wi-Fi fees.
  3. Ensure your travel policy addresses seat upgrades (things like extra leg room).
  4. Eliminate surcharge city fees at your top rental locations when negotiating car contracts.
  5. Exclude GPS rentals and make sure this info is listed in your policy. Most phones offer reliable GPS service.

Need help? It's 2016 RFP season, and our Consulting Services Department is hard at work securing the best pricing for clients. When in doubt, ask the experts!

Tags: airlines, Advice, Ancillary Fees, Consulting Services, corporate culture, General, Hotel, How-To, travel policy, WTI

This post was written by Maureen DiLello

The World Travel, Inc. Blog

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