Should Cruise Pricing Be Transparent?
Written by: Kuki
On Jan. 26, 2012, in the United States, it became law that in the interests of public transparency, airlines publish pricing which includes all taxes.
This law allows the people searching for airfares to see the total costs, rather than the airlines promoting seemingly low fares,only for the consumer to find the actual total cost to be considerably higher.
From the consumers point of view, I imagine most of us would like to see cruise pricing handled in the same way.
The situation with the manner in which cruise pricing is presented and promoted has improved in recent years.
In the past, cruise pricing was more complex. When you saw an advertised cruise price, and it interested you, once you called to book, you’d find the advertised price did not include port charges or government taxes ,then referred to as non-commissionable costs. The term non-commissionable costs was really just important to travel agents, as it meant they weren’t being paid a commission of that portion of the total cruise fare their customers were paying.
Customers thought the “port charges” portion of the fare referred to the costs cruise lines were being charged by the ports of call they were visiting, but to the cruise lines it became a vessel to dump all sorts of costs of their operations into, to eliminate paying their travel agent partners commissions on those costs.
At this time, however, most cruise lines are publishing and advertising fares which include the port charges. Most also require the travel agents they work with to advertise their fares the same way. But, they also state “government fees and taxes are additional”. Thus the advertised price you might see is still not truly your final cost as a consumer.
Now that the U.S. airlines have been forced to offer prices inclusive of taxes, one might think the cruise lines should follow suit. As I stated, as consumers of the cruise product we’d all like to see or hear the “bottom line” when asking for a quote on a cruise.
As this new law took effect, a member of the House of Representatives is already presenting legislation to repeal the law, and several airlines have filed suit in Federal Court on constitutional grounds.
I have no thoughts on the constitutionality of the law, but frankly I believe there is some seemingly reasonable concern to their objections to the law.
Their argument is this law requires the taxes to be hidden in the costs of the ticket, and those taxes could be increased by the government, without the customer knowing the increase in the fares was due to the tax increase. At initial glance, that does seem like a reasonable objection.
There seems to be a simple solution. Why can’t they advertise the total price, adding… this fare includes taxes of ”$X” ? As could the cruise lines simply reverse their description; rather than saying the price does not include government fees and taxes, they could say… this fare includes government fees and taxes of “$X”.
However, like most things in life, nothing is that simple.
In pretty much every other thing consumers purchase government fees and taxes are not included in the advertised price. When shopping in department stores the price tags do not include taxes; when eating in a restaurant the menu pricing does not include taxes; when purchasing an automobile the price tag does not include taxes; when booking a hotel room the price does not include taxes.
Basically the full price of your purchase does not appear until you are paying, or about to decide to pay. Why do we expect the airline (and possibly cruise) business to be different?
Simple – because it would be more convenient.
As you can see, the issue is complex enough that I can have a pretty good arguement with myself. What do you think?
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Posted: January 31st, 2012 under Kuki.