Orbitz Sets Precedent On Fee Disclosure.

Orbitz has taken a step aimed at clarifying federal regulations and confirming that regulators support its practice of fully disclosing airfares and fees.
On 1st December, Orbitz began phasing in a $5 per ticket fee for its online travel agent services. After studying consumer preferences in depth, and reviewing e-commerce and online travel sites, Orbitz chose a simple method that displays a matrix of airfares for the requested itinerary and clearly notes that the ticket purchase will also include a $5 fee.

The fare and fee are quoted separately on the initial search results page, and then itemized and totaled several times during the booking process for clarity. Because regulatory policy offers few specifics in regard to service fee disclosure, Orbitz has asked the U.S. Transportation Department to clarify its policy. A clarification could include an exemption if DOT determined that option was appropriate.

“Because most consumers shop multiple travel sites, they want to understand what they`re paying to an airline for a ticket, as well as what they`re paying to a travel agency for its services. Orbitz makes both of these costs totally clear to consumers,” said Roland Jacobs, Orbitz Chief Marketing Officer. “In our research, we presented consumers with screen shots showing Orbitz fee displays and screen shots of alternative disclosure methods of used by other travel websites. Hands down, consumers preferred Orbitz` approach of displaying airfares and fees separately, finding it the clearest and most straightforward.”

However, current DOT regulations on service fee displays are unclear at best, resulting in a variety of inconsistent approaches online and offline across the industry, some less consumer-friendly than others. For example, a recent study by the Consumer Reports Travel Letter found that almost half of all traditional travel agencies that charge a ticket fee fail to properly disclose the fee to customers. “Because there is little DOT precedent on the subject of disclosing travel agent fees, we have as a precaution filed an application for a regulatory exemption. This action will provide an opportunity for the DOT to provide a clearer picture of what its regulations mean and ensure that Orbitz is in compliance as it sets a industry precedent for pro-consumer disclosure,” Jacobs said.