Skift Take
Junk fees are a hot button issue in the travel industry, and here are some noteworthy statements several executives made at Skift Global Forum.
Skift Global Forum was held in New York City on September 26-28, 2023. Read coverage of the event at the link below.
So-called junk fees have been in the forefront of many travel executives’ minds, especially after the Biden administration took aim at charges travelers increasingly see as unnecessary and excessive.
We asked several leaders about the issue at the Skift Global Forum in New York City. Here’s what they said:
Brian Chesky, Airbnb CEO
“I think that you want to be as simple as possible for the customer and you want to do what’s best for them. And so in Europe, prices are regulated so everyone displays prices the same way. But this junk fee or drip pricing, whatever you want to call it, is primarily a U.S. phenomenon.”
“And the problem we had for years was we wanted to move to more transparent pricing, but when we did tests, people would come to Airbnb and they’d see prices different than other websites and they didn’t know why they were different and they didn’t realize, well actually we’re not more expensive. We’re just including the fees upfront.”
“So we were trying to figure out a way to educate the customers that we’re going to upfront pricing because it’s simple, it’s best for the customer and it also, we don’t want to create unintended consequences.”
“This upfront pricing model, with ranking the best total nightly (rate), is essentially very close to the perceived elimination of cleaning fees.”
Chris Nassetta, Hilton CEO
“We’re going to give total transparency; we’re going over and above. In the end, we don’t want consumers confused about what they’re buying or what they’re paying for. But the issue is complicated. In the hotel space, most of us are going towards the right place, but a lot of our products are distributed through third-party channels.”
“The OTAs and metasearch, we all need to be in the same place, it doesn’t matter if Hilton shows it the right way, because the majority of the population starts on Google for comparison shopping. They’re going to be misled even before they get to us. My view is an even playing field. The product is the product, and it should be displayed the same way.”
Peter Kern, Expedia Group CEO
“You know, in the old days you had a wholesale rate because you were trying to bring traffic from China to Chicago or Chicago hotels. So you put a special rate in the modern world. That rate ends up everywhere. And instead of being just for certain travel agents in China, it’s everywhere. And that’s not what you intend and that’s not good for your business.”
“I think, you know, we have turned off a few partners here and there over time for a variety of reasons that often have to do with abusive rates or sales practices, many times encouraged by our supply partners who don’t like what is happening or what’s happening at their hotels.”
“When people show up with those prices from those places, so so, you know, if somebody is abusing the consumer, using bad sales practices, abusing rates, they should expect to be turned off.”
Spencer Rascoff, 75 & Sunny Ventures co-founder and CEO
“This is like the whack a mole thing that our industry has been has been going through … I worry for the online travel industry that what we’ve sort of dragged our feet on for 20-plus years could could actually become a problem.”
“And you can imagine a class action lawsuit of the billions of dollars of extra fees the travelers have paid over the years, unknowingly, and just wait till plaintiff’s attorneys get stars in their eyes on those types of numbers. And who knows where that where that goes. So beware.”
David Neeleman, Breeze Airways CEO
“It’s just something that our guys decided to do and it seems to be working, but it is a little annoying. But we do have a technology expense, so that’s one of the one annoying ones. Everything else, we don’t have a change fee,” Neeleman said when asked about the company’s technology development charge.
Skift Global Forum 2023 Coverage
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Tags: artificial intelligence, sgf2023, skift global forum 2023, travel booking
Photo credit: Hilton CEO Christopher J. Nassetta at Skift Global Forum 2023 in New York City. Skift