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Biden targets 'junk fees' tacked on to hotel stays, airfare and credit cards

Feb. 08, 2023
7 min read
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Biden targets 'junk fees' tacked on to hotel stays, airfare and credit cards
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Editor's Note

This story has been updated.

President Joe Biden continued his push targeting fees on travel and credit cards Tuesday night in his State of the Union address, delving into legislation to ban so-called junk fees tacked on to hotel stays, airfare and credit cards after the fact.

Between resort fees, destination fees and amenity fees, these extra fees hotels typically refrain from disclosing until checkout seem to have gotten a bit out of control, depending on who you ask.

It appears that the president agrees with travelers' woes via his newly introduced Junk Fee Prevention Act, which would ban these surprise "junk fees," essentially hidden surcharges that appear on a consumer's bill without warning.

Among the fees the president intends to ban are resort fees, which can cost up to $90 a night at hotels, not resorts, as Biden lamented during his State of the Union address.

"Biden knows good politics when he sees it. Many Americans are fed up with fees tacked on by hotels, airlines and credit card companies for things that consumers believe should be free," said Brian Sumers, an industry expert who authors the Airline Observer newsletter. "I have no doubt that many Americans agree with the president's sentiments and would like to see these fees go away. This is an easy way to score political points."

Additionally, this bill would also address airline fees, including requiring airlines to show the entire fare price upfront, inclusive of all taxes and fees, during the booking process, building on Biden's efforts to ban fees for family members to sit together with young children on planes.

Last month, Southwest Airlines quietly expanded its family boarding on some flights to allow families to board together with children up to 13 years old.

"We’ll prohibit airlines from charging up to $50 round-trip for families just to sit together," Biden said Tuesday night. "Baggage fees are bad enough – they can’t just treat your child like a piece of luggage."

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Most airlines charge travelers to select seats in advance when flying with certain fare types, which is the only way to guarantee seats together in these cases.

Even if your fare type includes complimentary seat selection, whether a couple could find two seats together, let alone three or more for a family, depends on the number of seats available at the time of booking.

If you don’t prepay for a seat assignment, all airlines will automatically assign you one for free during check-in.

Unlike most other major airlines, Southwest is known (and often criticized) for its unconventional boarding process, requiring passengers to select seats based on the order in which they board, often creating an anxiety-inducing competitive process.

Because Southwest does not allow travelers to select seats in advance, the only way to increase your chances of sitting together is to purchase the airline’s EarlyBird Check-In, which automatically checks you in 24 hours ahead of your flight, guaranteeing an earlier boarding position and the opportunity to select your preferred seat, if available.

Though having EarlyBird attached to your reservation used to guarantee an A boarding pass, those days are over. To truly secure an A boarding pass, you’ll need to pay an extra $30 to $60 each way to receive an A1-A15 boarding position.

Traditional airline seat fees, including those charged by American Airlines, Delta Air Lines and United Airlines, can end up costing travelers anywhere between $20 and $100 each way, depending on the airline, fare type and route.

An airline’s most restrictive fare type, usually known as basic economy, is typically not eligible for assigned seats without paying a fee.

In January, Biden reminded airlines of the existing Department of Transportation policy prohibiting charging travelers age 13 or younger for selecting a seat next to an accompanying adult.

Based on that, airlines still appear to be violating this policy, raising the question of why the DOT has refrained from taking harsher action.

Airlines for America, a trade group representing several of the country's major airlines, including American, Delta and United, tweeted that its airlines "make every effort to accommodate customers traveling together ... without additional charges."

To ensure compliance, the White House confirmed the DOT would “publish a family seating fee dashboard and launch a rulemaking to ban the practice” as Biden calls upon Congress to “fast-track the ban on family seating fees so that the DOT can crack down on these practices more quickly than through a rulemaking.”

Additionally, the legislation wants to cut credit card late fees to reduce the legal limit credit cards can charge users to a maximum of $8 or 25% of the required payment, down from $35, further compounding remarks Biden made on curbing overdraft fees in October.

"We’ve reduced exorbitant bank overdraft fees, saving consumers more than $1 billion a year," said Biden.

Biden's bill aligns with ongoing congressional efforts, including lowering merchant credit card fees in the name of market competition and introduction of legislation to provide a bill of rights for air travelers and address some of the aforementioned airline fees.

Per our previous reporting, government efforts to wholly eliminate these fees remains unlikely.

"Some of the fees he cites, like a city hotel's resort fees, really are junk. Most of us have checked into a city hotel without any amenities and have been shocked to find an extra fee tacked onto the final bill that gives us access to very little," says Sumers. "These hotel fees make it nearly impossible to compare total prices among hotels in the same market."

Although Sumers thinks airline fees are a bit better given stronger regulation of airlines versus hotels, weird fees remain, such as those doled out by the ultra-low-cost carrier Spirit Airlines, which is notorious for charging extra for nearly everything beyond the fare itself, including a passenger usage fee to its fares that Sumer says most travelers probably don't even notice or understand what it is for.

But he questions the likelihood of taking aim at more reasonable fees, including ones "passengers love to hate," such as seat selection fees.

"As United CEO Scott Kirby used to say, not every seat is created equal. People tend to prefer aisle or window seats in the front of the plane and like seats with extra legroom," he said. "To me, it seems reasonable to charge extra for the better seats on the plane."

Even so, he sees the legitimacy of families, like his own, wanting to sit together during a flight.

"As a father of two, I see a caveat. Families should be allowed to sit with each other. They might be assigned the worst seats on the plane, but they should be together," he said. "Some airlines make it seem like families will be separated if they don't pay extra fees. That's not acceptable."

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Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.