WASHINGTON -- The Transportation Department attempted to clarify
and further explain its proposal to regulate the way agencies
disclose their service fees.
It is not clear the attempt did much good with opponents of the
plan. It may even have made things worse.
The DOT proposed the service-fee disclosure rule in connection
with its review of the GDS rules, although they are separate
regulations. Under the clarified proposal, which pertains to price
advertising for air transportation or tours that include air,
agents would have to include their service fee in the listed price
if it exceeds $20 or 10%.
If the fee is at or below those levels, it cannot be included in
the price but must be listed separately and prominently.
The DOT says this tactic will "ensure that service fees are not
used merely to make the advertised fare seem lower."
The DOT, which said "percentages are difficult for consumers to
calculate," also wants to prohibit agencies from setting ad valorem
service fees, i.e., based on a percentage of the fare.
ASTA responded, "How can the DOT justify telling a travel agency
that it may never establish ad valorem service fees?"
ASTA blasted the disclosure rule, telling the DOT there is "no
evidence that travel agency advertising practices, on or off line,
have caused injury to consumer interests."
American Express, advocating all agency fees be listed
separately, said "requiring the fee to be included in the air fare
sometimes but not others would be confusing to consumers."
The biggest online agencies are not in agreement on the gist of
the rule. Travelocity and Expedia want fees included in the fare.
Orbitz wants them listed separately. None liked the differentiation
based on amount.
Expedia, which called the $20/10% threshold "ratemaking in both
form and substance," went so far as to call it illegal and an
unconstitutional infringement of free speech.
Orbitz argued for consistency in the DOT proposal.
"As a consumer switches from one agency to another, the basic
rules of disclosure should be the same," Orbitz said.