White House cracks down on trash fees, reveals infrastructure plan

As we head toward what is predicted to be another record summer travel season, the White House is stepping up its fight against so-called trash fees.

In an interview with TPG, White House Council of Economic Advisers Chairman Jared Bernstein said the Biden administration has made some important progress on behalf of working families, but there is more work to be done.

That progress includes reducing trash fees, getting airlines to agree to more passenger protections, increasing price transparency and holding companies accountable for things like resort or destination fees.

“We will not stop until every trash fee that we know of is dropped or at least brought to light,” Bernstein said.

The White House also took a moment to discuss the progress it believes it has made on infrastructure projects, from new airport terminals to a rapidly expanding electric charging network across the country. .

Here are some notable points.

Price transparency

One of the biggest issues the White House is focused on is drip pricing. That term describes when the price you see when you go to buy something is not the final price of the goods and services.

Take airline tickets, for example. I’m buying a one-way flight ticket from Rome to Dubrovnik this summer and I found a great price on Google Flights. This led me to the Vueling booking site, where I found a reasonable price of 99 euros (about $108 USD) for a one-way flight.

Price is for one-way flight. PLEASE

However, when I went to book my ticket, additional fees pushed the final ticket price to 215 euros (more than $265). That is the price problem that the White House is hoping to solve.

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Airline ticket package for one-way flight. PLEASE

“I’m an economist and I will tell you one thing we know is that price transparency is important,” Bernstein said. “If people can’t see the real price of things, that ruins the whole competitive nature of the economy and leads to higher costs, higher inflation. Everything we’re fighting against. “

Bernstein gives an example from his own recent experience when he and his wife went to a comedy club. The tickets cost $30, but when he received the bill, he found they were charged $35 each; prices include a $5 “entry” fee. They can have the additional $5 fee deducted from the bill, but many Americans aren’t so lucky.

“One of the things that any economist, I don’t care which side you’re on, will agree on is that price signals really matter and these junk fees interfere with price signals,” he said. chief”. “It’s bad for the economy. It’s bad for consumers, and President Biden will not support that.”

In fact, recently the Department of Transportation completed a rule Require airlines to display in advance the full cost of a flight, including baggage and seat transfer fees.

Airlines will be required to display such pricing information “clearly, conspicuously and accurately” the first time fare and schedule information is made available.

The airlines were not happy and cooperated (with the notable exception of Southwest) to DOT lawsuitcalled this regulation unfair and “arbitrary”.

The White House said it could not comment on pending legislation.

“The final rule is part of the president’s broader agenda to reduce costs and protect consumers. We consider that to be entirely consistent with your views on these garbage fee issues – something [the president has] has been having difficulty for many months now.”

Indeed, the Biden administration has also targeted big banks, recently finalizing a rule to Limit credit card late fees. The administration is also targeting many other fees, including things like title insurance.

“That may sound confusing, but it’s another area where people end up spending hundreds of dollars in often trashy ways,” Bernstein said. We are not done with this yet.”

He also shows the way Major airlines are voluntarily changing policies to provide free meals and hotels to travelers affected by preventable flight delays and cancellations. He attributed that partly to pressure from the White House.

Related: These are your rights as a passenger when an incident occurs

A crackdown on resort fees

It’s not just airlines and banks that must adhere to higher standards. The administration is also targeting hotel and resort fees. These additional costs are called “destination,” “resort,” or even “municipal” fees, and they can add quite a few mandatory costs to your hotel stay. . These fees will be added to your bill and may even be charged separately for taxes and fees.

For example, here’s the booking page for the Hilton Maldives Amingiri Resort & Spa in Maldives, showing a rate of $862 USD per night. However, when you get to the final booking page, you’ll see that each night will actually cost you $1,107.14 after taxes and mandatory fees are included.

The White House wants this situation to end.

However, there has been progress. Hilton, Hyatt and Marriott will now display resort fees in the booking window… at least for US hotels and resorts. The screenshot below shows the price including resort fees (although taxes and fees on those resort fees are not included).

Search for Hilton hotels and resorts in Maui. HILTON

They are still not transparent about international bookings.

Major hotel chains have gotten better at posting resort fees due to pressure from consumers, thanks to lawsuits against hotel groups in several states. For example, Marriott resolved with the state of Pennsylvania, which sued the hotel chain over how it displays (or doesn’t display) resort fees. Marriott agreed to display the fees on future bookings, and now major hotel chains have followed suit. (Again, this applies to hotels in the US)

Related: Here’s how to avoid paying resort fees

But the White House says the pressure campaign against big corporations also pays dividends on things like resort fees.

Bernstein points out how Biden called into the hotel to prevent surprise fees during his 2023 State of the Union address. Those fees cost Americans more than $3 billion a year, Bernstein said. At the time, Biden himself called them “garbage fees.”

“One thing I will say here more broadly is that sometimes people say, ‘Oh, the bully pulpit doesn’t have that much effect.’ In fact, when the president stood up and spoke about this issue, we got a lot of voluntary compliance by companies who knew they were doing something wrong or by companies who realized they were doing something wrong. criticized and they better start doing the right thing,” Bernstein said.

He reminds me of the saying “Sunshine is the best antiseptic”.

Bernstein said he believes Biden is helping to shine a light on these issues and put those charges in the past.

Infrastructure spending

Biden shakes hands with Congresswoman Karen Bass before speaking at the Los Angeles Metro’s Purple Line (D Line) Transit Project in Los Angeles in 2022. KYLE GRILLOT/BLOOMBERG/GETTY IMAGES

The White House also told TPG that infrastructure dollars are flooding into the US thanks to a bipartisan infrastructure bill signed into law in 2022; it includes about $25 billion for airport improvements alone.

Bernstein points to tens of millions of dollars has been allocated for projects such as modernizing Orlando International Airport (MCO).

Bernstein said $9 billion has been allocated so far. “That’s a pretty quick amount of money for something like this,” he said. These are modernization projects. These include expanding the terminal and upgrading the baggage system.”

He also pointed to airport infrastructure grants for air traffic control facilities.

“We have a very broad agenda,” he said. All of this is in an effort to make the travel experience for everyone safer, less expensive and less disrupted by cancellations and other disruptions.”

The administration also wants to draw attention to the influx of money into coast-to-coast rail projects, including $8.2 billion in new funding for 10 major passenger rail projects and facilities other railway infrastructure.

Illustration of the Brightline train between Las Vegas and LA. BRIGHT LINE

Bernstein is especially excited about the $6 billion in government money for high-speed rail in California and Nevada.

Related: The bright line connects Los Angeles and Las Vegas

Finally, the government pointed to the massive effort to get the nationwide electric vehicle charging network operational ahead of schedule. He compared it to building a new network of gas stations.

“The nationwide public electric vehicle charging network currently stands at 175,000 and we are well ahead of schedule to reach our goal of 500,000 electric vehicle charging stations,” Bernstein said. “Since Biden took office, we have had about 1,000 new allegations coming online every week.”

Bernstein explained that the pace is increasing and the program is ahead of target, according to the U.S. Department of Energy.

Car charging at a Tesla supercharger station in Arlington, Virginia, in 2021. IMAGE ANDREW CABALLERO-REYNOLDS/AFP/GETTY

Bottom line

If Biden wins a second term, you can bet that trash fees and infrastructure will remain major issues for the federal government.

Bernstein said that Biden’s measures will have a lasting impact even after he leaves office, which “makes a huge difference to the long-term health of our economy, to jobs, the environment and national productivity.”

He explained that Biden is passionate about fixing such pricing problems because the president heard his family discuss them in daily conversation growing up.

“Tens of millions of consumers will benefit from the voluntary efforts of online ticket sellers, apartment rental sites, short-term food rental sites and delivery sites to provide offer all-inclusive prices. “We are actively pursuing these trash charges and we have a long list to go.”

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