The Transportation Department said it might soon consider issuing new regulations to govern how travel agents disclose service fees on their Web sites.
The disclosure came in an order authorizing Orbitz to list its new $5 service fee separately from air fares. The DOT gave Orbitz a specific set of conditions on how to display the service fee, including the exact language to be used for the notice to consumers.
For now, the order applies only to Orbitz, but the DOT said its enforcement office will take the conditions into account “to ensure uniform treatment of all online travel agents” who choose to list the fee separately.
For the longer term, the DOT said it will “consider the disclosure of service fees more comprehensively in a rulemaking proceeding” in which industry parties will have the opportunity to comment.
DOT officials told Travel Weekly the service fee review might apply only to online agencies, and the review could be folded into its ongoing and oft-delayed rewriting of the rules governing CRSs.
The DOT acted just days after Orbitz filed an application Dec. 3 asking the DOT to determine if its separate listing of the service fee complied with its rules on price advertising. If not, it asked for an exemption.
The DOT said it has “consistently” prohibited the separate listing of surcharges imposed by airlines or agents, requiring instead that they be included in an ad or other solicitation as part of the fare.
But the DOT decided to exempt Orbitz from that policy, saying there is “considerable merit” to the Orbitz claim that consumers benefit from seeing what agents are charging.
“Many travel agents are quoting fares to consumers that include a service fee,” the DOT said. “We are concerned some consumers who receive quotes from these sellers will not realize other sellers may offer the same flights at a lower price because they are charging lower service fees or no fees at all.”
But the DOT imposed several conditions, which Orbitz has followed. For example, Orbitz must present the total price to the consumer, including its service fee, whenever it presents an itinerary for purchase. Also, on the home page of its Web site, Orbitz must “prominently disclose” the existence of the fee.
The DOT also specified the placement of the notice and the wording: “Prices above are per person and may not be purchased on Orbitz without applicable service fees.”
The DOT also ordered that the words “service fees” be linked to a pop-up box explaining the Orbitz fee schedule. Even with those conditions, Orbitz competitor Expedia said it believes separating fees from fares deceives the consumer.
“The total cost of the ticket should be what is displayed because that is what the customer is buying,” said a spokeswoman for Expedia, which doesn`t charge a fee.