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Another site jettisons airline booking fees

July 9, 2007

It’s official: those unpopular but pervasive booking fees charged for airline tickets are taking a vacation. Hotwire.com today is expected to announce that it is eliminating its $6-per-ticket surcharge on all flights this summer.

“With travel costs continuing to inch upward this summer, eliminating our airfare booking fee will be a welcome relief for vacationers,” says Eric Grosse, the site’s senior vice president and general manager, in a prepared statement.

No doubt true. But it will also come as interesting news to its competitor, Priceline, which eliminated some of its booking fees earlier this summer and recently extended the no-fee promotion until Labor Day.

All of this started back in April when a small site called TripSync scrapped some of its fees — something I said no one had bothered to notice.

Well, I guess someone was paying attention.

The real question now is: Are booking fees going away for good — of just this summer? And what about the big online travel agencies (Expedia, Orbitz and Travelocity)? Will they jump in?

It depends. Hotwire might be cutting its fees because it’s seen a downtick in bookings since Priceline’s announcement. Or it could be floating a trial balloon on behalf of parent company Expedia, which wants to know if getting rid of the fees would give it a competitive edge. If one of the big online travel agencies pulls a me-too, I think this will stick.

For now, the fee reductions are short-term. So buy your airline tickets soon.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it “eye-opening” and “inspiring” — it’ll “grab your attention and won’t let go.” Order your copy now on Amazon, Barnes & Noble or iTunes.

1 comment

  • Chris

    If agencies get rid of their booking fees, how are they going to make a profit? Here’s the answer: travel agencies get a commission on reservations they book (although some travel providers have eliminated commissions). And where does the money to pay for these commissions come from? The airlines publish slightly higher fares to the GDS systems (used by travel agents) to help offset the commission–for example, if a travel agent gets a 10% commission for booking a rental car, the rental rate will usually be about 10% higher when booked through a travel agent. (The GDS systems themselves also take a bit of a cut, since they’re so old and expensive to run and maintain–they really need to disappear, if you ask me…)

    That’s the primary reason why I always (and everyone who is interested in saving money should) book directly with the provider unless you truly value the “service” a travel agent provides. My strategy: use an online travel agency for comparison shopping (Travelocity’s Flexible Dates feature is the greatest)–but then go directly to the travel provider’s Web site to actually book the ticket (I know, it’s a not very nice to do this to Travelocity, but I almost always get prices 5-10% lower by doing it this way).

    This is also one reason why I especially like services like Kayak and Sidestep (and, by extension, FareCompare, which sends you on to Kayak to actually find and book the fares), since these sites let you book directly on the provider’s site.

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