The "new" normal? Pay more, get less
The travel industry wants you to pay higher prices for worse service next year. Is it time to fight back?
What if the travel industry announced it would charge you more but give you less next year? I mean even less than it gave you in 2022.
Would you find that upsetting?
If you'd rather not be infuriated, stop reading now. Because that's exactly what the travel industry did this week. In industry conferences and interviews, executives revealed their playbook for 2023. They want you to pay higher airfares, car rental rates and hotel prices. But they want to give you less.
And “pay more, get less” will happen — unless you refuse to go along with it. I'll tell you in a minute how you can fight back.
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Higher prices are the "only choice"
Airfares will rise even higher, experts predict.
Willie Walsh, director general of the International Air Transport Association, told a news conference this week that if jet fuel prices keep going up, "the only choice" for airlines is to raise ticket prices.
Walsh did not mention improving customer service — addressing this summer's European luggage fiascoes and the U.S. cancellation problems. Nor did he talk about the record consumer complaints (up 264 percent from pre-pandemic levels in the latest month).
In other words, passengers will pay even more for some of the worst customer service in aviation history.
The hotel industry wasn't as shy. At an industry conference last week, executives not only admitted that guests will pay higher rates but also said their "service expectations" should be lowered. The reason: The labor shortage is not going away.
Keith Pierce, executive vice president of franchise and development at Sonesta International, said rates are increasing, but he doesn't have the labor force to meet demand.
"So service is an issue," he says. "We are asking for a higher rate, but delivering less service to the guest."
Car rental companies are using the same strategy. A new forecast by the Global Business Travel Association projects global car rental prices will surge by 7.3 percent this year to hit a new high. They'll jump another 6.8 percent next year.
And what do we get for it? Hertz just bought another 175,000 electric vehicles from GM. The car rental company charges a premium for renting an EV, which means even higher overall rental rates. Meanwhile, the service leaves something to be desired. More on that in a sec.
Is this what travel will look like in 2023?
You know that if the travel industry gets its way, we'll soon be looking at this:
"Zero service" airfares
Many airlines would like to sell you a pricey airline ticket and then add all the ancillary fees it wants — carry-on luggage, drinks, early boarding and meals. In a perfect world, they'd also remove all the service, making the tickets completely nonrefundable but deleting any obligations to keep their flight schedules or provide basic customer service. Some discount carriers have already come close to the "zero service" model. Many others aspire to. The Department of Transportation is trying to tap the brakes on this dangerous trend through an adminstrative rulemaking. So far, no luck.
Hotels rooms where everything is extra
Some hotels have a hidden agenda that the pandemic has allowed them to realize. They want to monetize everything while cutting their labor costs. That includes separate housekeeping charges, as I noted in a recent USA Today column. Oh, and don't forget mandatory daily "resort" fees for items that should be included in the price of your stay. They're rising too. Don't take your eyes off the hotel industry — it is quietly innovating its way out of the customer service business. And 2023 will be a big year.
Expensive cars with lots of surcharges
Rental car companies have had the most luck with raising their prices. My latest investigation in the industry (I'll have details soon) suggests they are also aggressively adding new fees and surcharges. Imagine paying more than $100 a day for a car and then facing an array of charges, including cleaning fees, fuel surcharges, recovery fees and concession fees. No, wait, you don't have to imagine it; it's already here!
Do you really have to take it?
There's no question that fuel prices and labor issues are a challenge. But does that mean we have to accept this summer's airline incompetence, serviceless hotels or overpriced rental cars?
It's easy to forget that as the consumer, you hold the power. You can say "no" to all this nonsense.
If you see an airfare that's too high, refuse to buy it.
If you find a hotel with a mandatory resort fee, don't book it.
If a rental car costs too much, use mass transit.
If enough consumers join you, then airlines, car rental companies and hotels will have no choice but to do the right thing.
And consumers really only want one thing: A quality product at a fair price.
This fall's economic uncertainties will give travel companies a license to do what they've wanted to for years: to charge you more and give you less. We can't let that happen.
I will be covering this dangerous trend extensively in Elliott Confidential. If you want to find out more, please consider becoming a paid subscriber.
Your thoughts, please
Have you experienced the travel industry’s “pay more, get less” pricing recently? Do you think labor shortages and a difficult economy give them the right to do that? Or have they gone too far? The comments are open.
About the art
Artist Dustin Elliott wondered what would happen if hotels got their way with pricing. “Would they just empty your entire bank account?” he asks. Perhaps.
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