James Irwin had to pay an outrageous pandemic surcharge when his tour operator canceled his upcoming trip to Germany. He asked for his money back and the company deducted $1,150 from the refund.
“We had not canceled,” explains Irwin, a retired supply systems analyst from Boothwyn, Pennsylvania. “The coronavirus had canceled the trip.”
Pandemic fees are spreading nearly as fast as the coronavirus.
Some, like Irwin’s, have always existed, but we’re seeing more of them now as trips are being canceled. Others, like service fees automatically added by restaurants and spas, are a recent development. But the worst pandemic fees may be the ones that disappeared at the start of the outbreak and are poised to make a comeback.
Pandemic surcharges will get worse
“We’ll continue to see an increase in pandemic-related fees from tourism and hospitality businesses,” predicts Jan Louise Jones, a professor at the University of New Haven’s hospitality and tourism management department. “Many are struggling to keep up with the new health and safety standards and are incurring increased pandemic-related costs.”
Irwin and his wife planned to attend the Passion Play in Oberammergau, Germany. But with Europe still banning most American travelers, his tour operator canceled the trip.
“They gave us the option of paying a $1,150 cancellation fee for each reservation,” he recalls. “Or, we could leave the money with them toward a rebooking for 2022, when Oberammergau was going to try and reschedule.”
Irwin wasn’t as optimistic about the future. And leaving the money with a small tour operator didn’t seem like a smart move either.
“The cancellation fee was 25% of the value of the trip,” he adds. “That seems excessive to me.”
Excessive pandemic surcharges are becoming the norm
But during the last few months, tour operators and travel agents have charged their customers similar excessive pandemic surcharges. The companies claim, sometimes without evidence, that their contracts allow for these surcharges.
If you find a surprise pandemic fee deducted from your refund, file an immediate dispute with your credit card issuer under the Fair Credit Billing Act. Your credit card issuer should side with you and refund the money promptly. And if it doesn’t, find a new credit card.
Some companies are quietly adding pandemic surcharges to cover the extra costs of operating during a pandemic. Although these surcharges are not yet the norm, they’re happening with more frequency.
Here are some of the worst pandemic surcharges
Perhaps the best-known pandemic fee is the one New Wave Billiards added in June. At the time, the South Florida restaurant’s owner said the 3% COVID-19 fee would cover the costs of health and safety upgrades.
But it’s not just restaurants. Mike Sweat was surprised when the salon and spa his wife frequents in Lansing, Michigan, added a $4 “safety fee” for each visit. But the more he thought about it, the more sense it made. The upgrades included a conversion to “touchless” credit card transactions and renting extra space to allow for social distancing.
“None of this was inexpensive for them, but they did this to protect not only their staff but their customers,” says Sweat, an environmental manager for the state of Michigan. “We appreciate it.”
Experts say the pandemic surcharges are almost certainly going straight into keeping the restaurants and spas cleaner.
“These businesses use this COVID surcharge to cover the costs of extra protective equipment and disinfecting cleaning supplies,” says Lindsey Maxwell, a frequent traveler who co-founded a news site about alternative homes. “The increase in prices for masks and other cleaning supplies doesn’t help matters, so some businesses have no choice but to charge customers a COVID fee.”
Old fees are coming back, too
But the worst-anticipated pandemic surcharges are the ones we thought we’d gotten rid of. I’m talking about the airline ticket change fees and refund rules.
Earlier this week, airlines began offering extensions to their fee waivers — but only for a short period. Delta Air Lines said it would extend its change-fee waiver to new flights purchased through Aug. 31. And TAP Air Portugal extended its Book with Confidence program for all new reservations through the same time period.
You remember the old rules, don’t you? Those are the ones that require you to pay a change fee and fare differential when canceling or rebooking a flight. It’s not a question of if, but when, these customer-unfriendly ticketing policies will be back. (If you have a problem with an airline fee, please reach out to my nonprofit consumer advocacy site. We might be able to help.)
The travel industry relies on these fees to earn a profit. Keeping the full amount of your reservation, even if you can’t travel, may seem unfair. Sticking you with a $200 “change fee” for rescheduling a flight might appear outrageous.
Is there a better way?
Maybe there’s a better way.
“Why not just temporarily raise prices?” asks Chris Lopinto, president of ExpertFlyer.com. “That way, customers won’t think they are being taken advantage of with another fee.”
Now there’s an idea. But then again, truth in advertising is not the travel industry’s strong suit.
Are pandemic surcharges legitimate?
They may be — under these conditions:
When they cover an actual cost
Consider tour operators who cancel a trip. “Cancellation fees cover lost revenues when these trips don’t happen, but should be transparent and justifiable,” explains Loren Siekman, a business development specialist for Pure Adventures, a Scottsdale, Arizona, tour operator. “In a pandemic like this, an entire year’s worth of income evaporated for most agents, operators and service providers.”
When they’re clearly disclosed
“Gotcha” fees are not legitimate, no matter how well justified. But some businesses have gone out of their way to disclose the extras. For example, when Kiko Japanese Steakhouse & Sushi Lounge in West Plains, Missouri, added a 5% surcharge, it posted the notice prominently on its door. It also promised to remove the fee after the pandemic.
When they’re temporary
If the fees outlast the pandemic, we have a problem. Some of them, no doubt, will stay.