(NerdWallet) – Traveling means facing numerous problems that our seemingly advanced civilization would have solved by now.
Are overhead bins really the best way to store carry-on luggage? Is a lockbox the safest way to transfer your Airbnb keys? And for national security reasons, U.S. airports still use them Do I have to take off my shoes?
But one grievance persists and has even caught the attention of the Biden administration. That means it remains nearly impossible to compare real prices between travel products. The buzzword surrounding this is “junk fees,” but the fees themselves are only part of the problem. The real problem is that no third-party booking service has devised a way to compare the actual prices of airline tickets, hotel rooms, or rental cars to show you which is actually the cheapest.
It is natural that travel companies themselves are reluctant to disclose the total price of their products. In 2023, airlines collected $117.9 billion in “ancillary fees,” according to a report by CarTrawler and IdeaWorks Company. According to World Bank estimates, this is roughly equivalent to Ecuador's annual gross domestic product. Airlines aren't willing to give up Ecuador's worth of revenue to make your life easier.
What doesn't make much sense is why third-party search engines like Google Flights, Expedia, and Kayak haven't solved this problem yet. I can see the total cost of my flight tickets and other travel reservations, but for some reason it doesn't.
What gives?
It's not rocket science or even advanced aeronautics.
When purchasing a flight ticket, you want to know the total price according to your preferences. These include:
- Checked baggage.
- Seat assignment.
- Refundability.
- Earn miles.
For example, let's say you want to search for a flight between Los Angeles and San Francisco, assuming you want to bring one carry-on and one checked bag and choose an aisle seat. I would also like to cancel my flight ticket for a full refund so that I can earn all my miles. Oh, and I drink Diet Coke on planes.
However, most third-party search tools show results that are mostly meaningless. The lowest fares are usually offered by low-cost airlines, which add hefty fees to all of the above. For example, Frontier Airlines typically adds $157 in fees each way, while Alaska Airlines adds $30 each way, according to a recent analysis from NerdWallet. The exact number depends on my preferences and what fees I can tolerate.
(Frontier currently prices Diet Coke at $4.39, if you're interested).
This is not a difficult problem to solve. Yes, Google has the engineering to customize Google Flights search results. But you can't even filter by basic economy fare, or even search for the total price including add-on fees.
big chance
Third-party booking platforms are no small potatoes. The global online travel agency market is valued at $519.1 billion in 2021, according to a report by Grand View Research. This is more than 4 in Ecuador.
If just one of these platforms could solve the problem of price opacity, there would be a seismic shift in the industry. Imagine if you could go to a place that would tell you how much your flight, hotel, or rental car would actually cost during your search, rather than after a long checkout process.
The strangest thing about this problem is that greed alone doesn't explain everything. Indeed, travel platforms are incentivized to show you the lowest prices while shopping and then charge you extra charges later. But the interests of booking platforms must align with us, the shoppers.
For example, when you search for a room on Hotels.com, the search results page will show you the “base” price for your reservation before any additional fees, such as resort fees. Yes, the total cost is also displayed, but users cannot filter or sort the results by this more meaningful result. If a hotel is priced at $100 but has a mandatory resort fee of $50, it will appear before a $125 hotel with no resort fee when sorted by price. That's ridiculous.
No one cares about the base price. It doesn't mean anything. Why is it still showing up in search results?
This is what you need to do (for now)
Getting angry all over the world won't make things better. So what can budget travelers do in a world of meaningless prices?
The best thing to do is to decide which airline and fare class suits your travel preferences. For example, if you're traveling light and don't care about refunds, seat assignments, Diet He Coke, etc., you're probably fine using the base fare listed on search pages like Google Flights.
However, if you often travel with your bag, or if you care about these other features, you'll need to do a little homework. Compare the “total cost'' of the fare, which takes into account everything you want, to the “base fare'' of the airlines you are considering. The only way to do this is to check out multiple fares. You want to see what your personal markup is for each airline. For example, Spirit Airlines will add $80 each way, while Delta will only charge $20.
If you're a geek like me, you'll create a spreadsheet with these markups for each airline. You then need to add those markups to the base price when comparing prices on the search results page. That way, you can see the total cost for each airline (depending on your preference). You also don't have to go through the entire checkout process every time you want to compare prices.
Does that look painful? I agree. And until the major online travel booking platforms take action, that's the pain we all have to live with.
