uisance lawsuits are a fact of life
for big companies; they are big targets. They get sued every day.
So we can hardly be shocked that two consumers filed a
class-action suit against Royal Caribbean
Cruises Ltd. for allegedly deceiving consumers about how much
tax they pay for cruises on the company's Royal Caribbean and
Celebrity brands.
Whether this lawsuit is a mere nuisance or not remains to be
seen, but it raises an issue that the cruise industry never has
fully resolved: full disclosure of taxes and fees.
We're not big fans of heavy-handed government regulation around
here, but the airline industry has one thing going for it as a
result of its previous life as a regulated industry: a bright line
that separates transportation charges from government taxes.
When you price a scheduled airline ticket, taxes are treated in
a pretty straightforward manner. The automated systems are set up
to tell the agent and the customer how much is for transportation;
how much is for the federal excise tax; how much is the airport
passenger-facility charge; how much is for the
on-again, off-again federal security fee; and -- in the case of
international transportation -- how much goes for customs and
agriculture inspections, etc.
It's all there if you care to look for it.
The cruise industry doesn't have a history of itemizing these
sorts of things so precisely, if at all.
Cruise line invoices are full of entries such as "other
charges," "government fees" or "federal taxes and fees" that do not
offer the kind of detailed breakout that the airlines and many
other merchants (even car dealers) routinely provide.
We asked a travel agent friend to look up some cruises at
random. Among them we found a fare of $700, plus a
"noncommissionable cruise fare" of $114 and $29 "additional
tax."
We asked, "Can you tell what that tax is for?"
Answer: "No."
Even the participants of the Boston Tea Party knew what the tax
was for.
Some suspicious travel agents believe there's a fudge factor in
cruise pricing, and that nefarious cruise lines use a mysterious
hodgepodge of taxes, fees and other noncommissionable charges as a
device to keep their advertised prices low and/or to keep
commissions down.
Until the pricing becomes more transparent, that suspicion will
linger among agents and among consumers, and it will give rise to
the occasional lawsuit.
In the airline game, it's virtually impossible for the carrier
to call something a tax and pocket it. Everybody knows what the tax
is, what it's for, where it goes. There is no opportunity for the
kind of fraud that is alleged in the cruise suit. In the airline
game, this kind of lawsuit could never be filed.
That should be true all over.