Consumers tolerance for add-on fees will ultimately reach a limit, says transportation economist
MILWAUKEE- Airlines, hotels and car rental companies don't plan on slowing down their industry fees anytime soon, according to a recent USA TODAY article.
For instance, the article discovered that airlines throughout the world reported making $22.6 billion in fees for add-ons such as extra services and frequent-flier programs in 2011, a $20 billion jump since 2007, according to a review by IdeaWorks Company.
As a consumer, when will enough be enough?
"That will be determined by the marketplace," says Aaron Gellman, a professor of transportation at Northwestern University's Kellogg School of Management. "That sort of thing (increase in fees) will ultimately reach a limit."
Gellman didn't speculate to Newsradio 620 WTMJ's "Wisconsin's Afternoon News with John Mercure" what the consumers' threshold was for taking on additional costs, but says some companies have started to react to consumer backlash to fees.
"Delta Airlines has responded by saying if you have an American Express card that they sponsor, then you will get one bag checked fee," notes Gellman.
Once you land from your flight, rental car companies and hotels are continuing the fees.
Gellman says when he travels he notices some nicer hotels charge for use of their wireless internet in your room, but if you go into the lobby -- you can access it for free.
"That one stumps me," says Gellman. "I have found that to be amazing, irritating and doesn't hold much economic sense."
Gellman says don't be surprised if you see more fees for car rentals, or even cruises.
An example found by USA TODAY had Thrifty's economic rental car start at $32.72, then charge you for GPS usage, an infant car seat or a fast pass to avoid long lines at electronic toll booths.