1. More Fees With
Traveling
Continuing to
Trend in 2013
Luke Hunter
and Lindsey Gillan
HT-344
4/22/13

2. More Fees With Traveling in 2013
1
More Fees Will Continue to Appear Across the Border in the Traveling Industry
Within the upcoming years, travelers can count on spending more money if they want a
better experience. The flying fees have been around for many years and continue to grow in
allsectors of the industry to generate more money. There are some people that are willing to pay
less for something more basic, rather than having extraamenities.Some airports have been known
to have more fees in recent years, for example baggage fees, aisle seating, early departure fees
cancellation fees,Wi-Fi fees.When figuring out what the baggage fees come down to, hotels can
typically charge you two dollars per bag or more to bring your bag wherever you want, without
the tip included.
Thereis an Irish airline is planning to install vertical seating for passengers who are
willing to stand for a discount.They are also considering putting pay toilets on their planes. That
would give a whole new meaning to the term ―holding pattern. (1)‖ There is also an airline that
sets either a minimum bid, or a bidding range. You put in your offer, wait a couple of days, and
if yours was the winning bid, the airline notifies you to complete the transaction (2).
Back in the day, there used to be more services for companies that were expected for the
people, for example when pumping gas, there would always be someone who would be pumping
gas. According to skift.com, today ―U.S. hotels began charging fees in the late 1990s, well
before U.S. airlines, but the record $1.95 billion that hotels were estimated to have charged in
fees in 2012 pales in comparison to the $12.4 billion that U.S. airlines were forecast tohave
levied last year.(3)‖
Adding the extra costs of traveling is a positive for companies to bundle packages
together. Many companies find very profitable by making a bundle deal for the customers so
that they think they are getting a better deal.Some airlines are starting to offer passengers a trade-
off deal. (4) Air Canada and Delta have already started recommending people to try out their
new trade-off,which offers passengers reduced air fares if they use their frequent flyer miles
often. With this there has also been a push in 2013 for outside companies to give guests an
option of receiving hotel reservations and ground transfers during the booking process, instead of
having the passengers complete their flight reservation. (4)

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Adapting Business with the Trend of Rising Fees
―A new study estimates that airlines around the globe will charge $36.1 billion in fees for
things like checked luggage, seat reservations, and in-flight meals this year. That’s an all-time
high, and an 11% increase over the 2011 total‖ (7), so how are business marketing their
company so people are willing to keep paying more fees each year.
Michael O’Leary the CEO of cheapo European carrier Ryanair is well known for doing
and saying outrageous things such as the possibility of putting pay toilets on planes and even
having inflight porn to help make money for the airline. ―Trend is the long-term, underlying
pattern of growth or decline in sales resulting from basic changes in population, capital
formation and technology‖ (Marketing for Hospitality and Tourism) Ryanair is taking into
consideration all of these concepts for their flights. The culture of population is always changing
and since people are willing to pay less to receive only and just only what they need, O’Leary
proposes ideas that will give people this. If Ryanair flights offer flights that are very cheap but
people only stand on them and have to pay to use the toilet, they have to make sure they market
to the population that is willing to do this for the cheap price of the flight. This would have to be
marketed to people who want to get to point A to point B and do not want or expect anything
else, but would be willing to pay more if they end up needing to use the bathroom.
Airline marketers are trying to get rid of the airline bathrooms, leaving one for the use of
the travelers who are willing to pay that extra fee to use it and in general it would make more
room for more seats in the plane to seat more people.―Part of his justification for the idea is that
six extra seats could translate to a 5% savings for passengers, which is actually less compelling
given how extremely cheap the tickets are on Ryanair, Europe’s largest airline. Your average
flight goes for £40, about $63, making the bathroom sacrifice worth about £2, or $3.15 per
person.(5)‖
An example of an airline that is not adjusting to the trend of more fees is Virgin America.
Virgin America ―The San Francisco–based carrier is regularly voted to the top of ―best airline‖
lists. But it is far from the best in the business at making money (8).‖ So what is it that Virgin
America is doing wrong? It may be because it offers first class, premium economy and economy
flights; it does not offer low-cost carriers that fly with single-class seats and services. ―Virgin
American stands out especially because the industry is dominated with trends pushing for more
fees, fewer perks and an overall degrading and deglamorizing of the flying experience (9)‖,
Virgin America is not taking advantage of customers wanting to pay less and receive less,
however Ryanair has the right idea. Virgin America could market more to the wealthy that are
willing to pay more for flights and receive full treatment but maybe there are just not enough
people willing to do this for the business to stay profitable.
―Years ago it was laughable to compare buses with planes. But nowadays, the concept of
a plane being little more than a ―bus in the sky‖ is the industry standard (10).‖ The Virgin
Airlines has been able to generate a reaction for the guests that can keep them coming back, but

4. More Fees With Traveling in 2013
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with their high prices and airline fees that are mandatory, those fees may steer future customers
away from their airline.That is why culture largely impacts trends and it influences how long it
takes for them to become a reality.―Last summer, travelers griped about the onslaught of airlines
fees—for early boarding, seat assignments, checked and carry-on baggage, and on and on—that
could easily wind up adding 50% to the price of a flight(6)‖ Those fees associated with traveling
have been around for a long time because the culture is changing so rapidly compared to how it
used to,and technology advancements are helping this trend move at rapid rates. What the end of
this trend would be is people paying bare minimum and receiving only what they paid for. If
Ryanair began to have flight where your ticket only pays for you to get from one place to the
next and fees would be added for any additions this would be the end point of the trend because
it would not be able to go any farther.In a marketers point of view, they would be saving money
because only the people that really need to use the restrooms, or extra amenities would pay extra,
helping the planes profit rise because then they wouldn’t lose any unnecessary utilities or
equipment charges.
Marketing Strategies Remain Key to Profiting Form Additional Fees
Hotels may not be quite as extreme as airlines with this trend yet but they are on their
way. ―There’s a reason hotels are becoming more aggressive about fees. ―They’re highly
profitable,‖ says Bjorn Hanson, an NYU professor who studies hotel fees. Of the nearly $2
billion the industry collected last year, between 80 percent and 90 percent was profit‖ (11), if
this trend continues it could someday get to the point where you pay for just a bed and any
additional amenities will add fees to your stay. Fees have a very large impact on how a business
is marketed. How a hotel markets its rooms will vary with the amount of fees.
When Inns began appearing in America the service was much different from what it is
now. Hotels began to realize that there was a customer base that wanted to payless and receive
just a room. Motels are a great example of a product providing just what the customer wants, a
room to sleep in on the side of the road and nothing else. Fees in the traveling industry have
always been impacting businesses marketing but in 2013 it will be taken to a whole new level. In
the USA Today article ―5 Trends to look for in Travel This Year‖ it describes that ―Paying for a
trip will look less like a prix fixe menu and more á la carte this year.‖ This trend is impact much
more than just airlines and hotels it is also prevalent in rental car agencies and cruises. ―Rental
car companies have become expert at charging for extras. ―The base price for a rental car might
look attractive, but you can easily doubles that with a GPS locator and infant car seat‖
(usatoday.com). Carnival Cruise Lines is also trying out a program named ―Faster to the Fun‖
―…for $49.95. It includes early embarkation and priority dinner seating. On many ships, you can
pay $30 or $40 more a person to dine at a higher-end restaurant rather than the venue included in
the fare.‖

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When Matt Anderson, the General Manager at the Van Dusen Mansion and the
Rivertown Inn and the Director of Business Development at Mintahoe Catering, was asked if he
has incorporated any marketing strategies to adapt to rising travel fees? He replied with ―Yes,
We have made more cost effective incentives that the consumer feels like they are getting more
for their money‖ he also mentioned that ―Service charges have raised from around 12% in 1992
to 20% in 2012.‖ Anderson a clear veteran of the hotel industry also described some of the
positives of more fees in a hotel ―Staff can gain a portion of these fees as tip. The reminder of
the service fee goes directly to the company’s bottom line which helps operating expenses.‖
Anderson gave some examples of fees he has seen hotels add well he worked there
―Some hotels Food and Beverage departments will charge for staff, they call this a house fee.
There are services charges, maintenance fees, and also a gratuity can be added at proprietor
discretions.‖ Even though the trend of how hotels market their rooms cheap but have many fees
may be the trend Anderson does not believe it’s the best way to do it ―While it might help some
small businesses to recover some incomes in this rescission. It can hut the bigger properties with
guest retention.‖ When we asked Anderson if there any fees that he thinks are necessary? Such
as Wi-Fi fees? Or Cancellation fees? He stated ―Wi-Fi no. Cancellation yes. You always need to
be able to support any cancellation with some kind of recovery income. These different fees we
see in other states are directly affected by government and state taxes.‖
Anderson does not believe that hotels would ever become as extreme as flights, such as
the ones that O’Leary suggest. Anderson says that ―The market is too big and there is too much
competition for room nights. With the new whys to book on line with booking.com, Expedia and
others there is no why the consumer will book that particular hotel when there are so many other
choices.‖ Anderson also added that ―Another fee we have seen recently is sir charge‖ finally he
stated that ―I don’t think the marketing strategies have changed but you do see these fees posted
in some of their collateral.‖
―Blaise Waguespack, an aviation marketing professor at Embry-Riddle Aeronautical
University, wonders how many more fees airlines can find. ―The big issue is, how many more
fees can you create?" he says‖ (usatoday.com), finding new fees may be what companies have to
do to stay ahead of competitors. In the case study mentioned earlier in this paper where O’Leary
the CEO of Ryanair mentions the new types of fees he is considering adding is a great example
of what might be needed to be done to stay ahead of competitors. If people want to spend as little
as possible businesses need to realize this and market to them.
The case study from section two about Virgin America shows how a business is not
adapting trending fees or they might just be marketing themselves wrong. If Virgin America
marketed its flights to a wealthier customer base that are willing to pay for flights that have great
customer service, it may raise its sales. Or Virgin America could follow the lead of other airlines
and start offering flights that offer bare minimum for cheap prices and tack on fees to the people
who want more.

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One reason why this trend has become so dominate in recently is because of how much it
can help out companies still recovering from the recession ―As a result of these trends, the
industry in general has become profitable again after years of red ink. And having fewer flights
has resulted in a drop in flight delays and cancellations‖ (weather.com). 9/11 also had a huge
impact on the travel industry, so the addition of more fees has helped some businesses make up
for lost business.

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References
1.) "Air Travel: Fees, Fees and More Fees." ARBcpa RSS. N.p., n.d. Web. 21 Apr. 2013.
2.) "4 New Ways Travelers Are Being Tempted Into Spending More." Business Money 4 New
Ways Travelers Are Being Tempted Into Spending More Comments. N.p., n.d. Web. 21
Apr. 2013
3.) . "Skift." Skift. N.p., n.d. Web. 21 Apr. 2013.
4.) "The New Airline Fees Travelers Need to Know about for 2013." NBC News. N.p., n.d.
Web. 21 Apr. 2013.
5.) "Hold It: Airline Might Ditch Toilets to Make Room for More Seats." NewsFeed Hold It
Airline Might Ditch Toilets to Make Room for More Seats Comments. N.p., n.d. Web. 21
Apr. 2013.
6.) "Airlines’ Same Old Story: More Fees, Higher Fares, Fewer Perks, Tougher
Restrictions."Business Money Airlines Same Old Story More Fees Higher Fares Fewer
Perks Tougher Restrictions Comments. N.p., n.d. Web. 21 Apr. 2013.
7.) "Business & Money." TIME.com. N.p., n.d. Web. 21 Apr. 2013.
8.) http://business.time.com/).
9.) "Business & Money." TIME.com. N.p., n.d. Web. 21 Apr. 2013.
10.) "Business & Money." TIME.com. N.p., n.d. Web. 21 Apr. 2013.
11.) "Five Days of Fear: What Happened in Boston." Dallas-Fort Worth News, Sports,
Entertainment, Weather and Traffic. N.p., n.d. Web. 21 Apr. 2013.
12.) Matt Anderson Bio:
Matt Anderson the General Manager at The Van Dusen Mansion and Event Center is
responsible to overseeing daily operations for a staff of four employees on property as
well as all aspects of communication with our exclusive catering company Mintahoe
Catering and Events to provide seamless service to our guests. Manage all projects
related to external vendors in the continuing improvement process of the mansion.
He has also been the Director of Sales at the Stone Ridge Golf Club where he had full
responsibility for Food and Beverage Operations including development of menus,
marketing and liquor inventory. Responsible for soliciting, booking and detailing
meetings and events as well as overseeing and scheduling the catering and conference
service staff and the staff in the food and beverage outlets.He has also increased
future year catering bookings by 40% for 2009 and 2010 over prior years.

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