Testimony of Laura Chadwick, President, and CEO Travel Tech
March 30, 2023 – Public Hearing – U.S. Department of Transportation’s Notice of Proposed Rulemaking on Enhancing Transparency of Airline Ancillary Service Fees
TOPIC 1
Whether Consumers Are or Are Likely To Be Substantially Injured or Misled by Airlines’ Current Disclosures of Ancillary Service Fees
I am Laura Chadwick, president and CEO of the Travel Technology Association, also known as “Travel Tech.” Our mission is to empower traveler choice. To do so, we bring together travel innovators to promote transparency and competition through education and advocacy. Our members include online ticket agents, metasearch engines, global distribution systems, travel management companies, and short-term rental platforms. I am proud to be a witness today alongside member companies Priceline, as part of Booking Holdings, Skyscanner, and Amadeus.
Thank you to the Department for granting Travel Tech’s petition for this hearing to discuss the proposed “Enhancing Transparency of Airline Ancillary Service Fees” rule, specifically regarding its requirement that critical ancillary fees must be shown on the first page of search results. We took this extra step of filing this hearing petition because we strongly hold that Travel Tech member companies are best positioned to determine how ancillary fee information should be presented to consumers. You will hear from three experts from Travel Tech member companies later today who testify to the intense efforts that their companies pursue to serve the needs of their consumers.
Travel Tech, as it did in 2014, supports this rulemaking. Advocating for transparency for consumers is who we are and what we do. It’s in our member companies’ DNA – transparency was a driving force behind the founding of their companies years ago to support consumers.
But before we can address issues relating to how critical ancillary fees can and should be presented to consumers, we must discuss the critical ancillary fee data itself. This is so important because the transparency of ancillary fee data is impossible without permanent access to the data in the first place.
Travel Tech and our member companies strongly agree with the Department’s finding that consumers are or are likely to be substantially injured or misled by airlines’ current disclosure of ancillary service fees. And we likewise agree with the DOT’s proposed requirement that critical ancillary fee data must be provided by airlines. It is indeed unfair and deceptive that consumers purchasing their tickets through the indirect channel do not have guaranteed access to critical ancillary fee information. Ticket agents, however, cannot provide to consumers what ticket agents do not themselves have – that is, the fee data itself.
Now, to whom critical ancillary fee data is provided is a different story. As we extensively detail in Travel Tech’s written comments, we strongly believe the Department must alter its proposed rule and require airlines to provide critical ancillary fee data to all intermediaries the airlines use to distribute their schedule and fare information. This includes providing the ancillary fee data to global distribution systems.
Travel agents of all sizes greatly rely on Global Distribution Systems to provide schedule and fare information from across the 400 airlines operating around the world. It’s hard to overstate how essential GDSs are in facilitating comparison shopping on Travel Tech members’ consumer-facing sites.
Allowing airlines to skip over GDSs and provide the ancillary fee data directly to ticket agents – as the proposed rule currently states – will have a tremendous impact on a ticket agent’s ability not only to digest but also then display critical ancillary fee information, much less so on the first page of search results. Ticket agents today have no existing infrastructure whatsoever to match ancillary fee data with the schedule and fare data provided to them by the GDSs. It will take years of work and massive investments to build these duplicative capabilities and not the six months that the Department has proposed. The years of work needed to make this happen will greatly delay the achievement of the overall goal of this rulemaking: providing transparency of critical ancillary fees to consumers.
Witnesses from Travel Tech members will highlight how difficult displaying critical ancillary fees would be without the involvement of GDSs in addition to their technical expertise about the Department’s proposed first-page search results requirement.
Thank you.
TOPIC 2
Whether Disclosures of Itinerary-Specific Ancillary Fees at the Time of First Search Will Result in the Display of Incomplete or Inapplicable Ancillary Fee Information, Cause Consumer Confusion, and Distort the Marketplace
Thank you again to the Department for granting this hearing and for the opportunity to speak today.
Travel Tech, in its written comments and in our hearing petition, expressed its deep concerns about the Department’s proposed first-page search results requirement. As I stated earlier, we took this extra step of filing a hearing petition because we strongly hold that Travel Tech member companies are best positioned to determine how ancillary fee information should be presented to consumers.
This proposed rule would mandate that carry-on and checked baggage fees, change and cancellation fees, and family seating fees be shown in text only on the first page of search results. It would specifically ban the use of rollovers or web links. This provision would apply to both airline and ticket agent sites.
You will hear from true experts on flight search display from Travel Tech members today. They will provide great detail about the technical infeasibility of this provision. They will also speak directly to the deep impact it would have on consumers, especially those shopping on travel comparison sites that display hundreds of flight combinations across a multitude of different airlines.
I want to take a moment to highlight the other organizations – beyond Travel Tech and the airlines – that submitted comments on this proposed rule and what they said about this first-page search results provision.
The US Chamber of Commerce wrote, “…Without the ability to display fee information via pop-ups or roll-overs, the strict and prescriptive display requirements required under the NPRM would have the effect of bombarding consumers with irrelevant fee and fare information on a single webpage, making ticket agent webpages difficult to navigate and cluttered.”
US Travel stated, “Additionally, more and more consumers are utilizing mobile devices rather than web browsers to make travel plans. Increasing the amount of required information to be shared during the purchase process on smaller screens will lead to an inferior user experience, increased consumer frustration and the type of information overload that diminishes consumer interest and comprehension.”
The Global Business Travel Association is “concerned by the sheer volume of proposed ancillary fee information on the first page creating confusion for travelers. The requirement to include all information on the first page may actually have a negative effect, as screen real estate is consumed by ancillary fee information, reducing the number of available flights able to be displayed in a single webpage, and requiring substantially more search time to compare options.”
And even the AARP submitted comments and wrote, “However, without additional guidance, there is the potential that displaying all fees in the same place as the fare could be visually overwhelming for some consumers, adding confusion rather than reducing it.”
And there are further comments noting concern about the first-page search results beyond what I have now presented. Today, Travel Tech is submitting a letter signed by US Travel, the US Chamber, the American Society of Travel Advisors (ASTA), the Global Business Travel Association (GBTA), Hopper, and Sabre to the docket to demonstrate in one document the many stakeholders who take issue with this part of the proposed rule.
The rationale of this first-page search results requirement – as described in the NPRM’s “Need for a Rulemaking” section – was quote “because most passengers travel once per year or less, they may not be aware of certain ancillary service fees, such as those related to seat selection.” According to the Department and per consumer advocates, consumers continue to be surprised by these optional services, and therefore, all critical ancillary fees must be shown on the first page of search results along with schedule and fare information.
We at Travel Tech were “curious, not judgmental” about this conclusion and wanted to hear directly from consumers about what they knew about ancillary fees and their understanding of optional services, like checking bags or selecting a seat.
To do so, Travel Tech fielded an online survey of over 1,000 U.S. adult consumers from March 24-26, a few days ago. The topline results that I will now share were weighted to be representative of the overall population.
- Our survey found that nearly 90% of all U.S. adults know they may have to pay additional fees for optional services beyond the cost of their airline ticket. This includes Baby Boomers at 92% and 87% of the so-called “Silent Generation” (adults aged 78-95).
- We found out that 60% of U.S. adults have used travel comparison sites, and of those who likely use Travel Tech member websites, 96% of consumers know they may have to pay additional fees for optional services (e.g., checked bags, specific seat selection, carry on bag, etc.) beyond the cost of their ticket.
- Further, we found that consumers’ satisfaction with travel comparison sites was closely tied to how fares are currently presented on these sites and their ability to get relevant flight information quickly and easily.
- We asked and consumers told us that they use travel comparison sites to compare airline flight costs (as intended!)
- And then we asked consumers all the reasons why they stop using websites, 50% said because the website was difficult to navigate, 49% said the page took too long to load and 40% said was too hard to use.
- Lastly, we asked consumers about whether they’d like to purchase ancillary fee services on the same travel comparison sites where they purchased their airline ticket, and 86% said yes.
These results are clear evidence – even though they may travel once a year or less – that consumers are incredibly aware of the existence of critical ancillary fees. Not too many consumer surveys reach numbers of 96% awareness. Consumers know that critical ancillary fees are now a part of travel – they expect these fees and know that they are optional services and not required. There are no surprises here. As such, there is no need to overload the first-page search results with the extra information this rule would require.
TOPIC 3
Whether Disclosures of Itinerary-Specific Ancillary Fees at the Time of First Search Will Result in the Display of Incomplete or Inapplicable Ancillary Fee Information, Cause Consumer Confusion, and Distort the Marketplace
Thank you again to the Department for granting Travel Tech’s hearing petition and for the opportunity to speak today. I have greatly enjoyed hearing from all of the witnesses on this matter of first-page search results. We greatly appreciate references and call-outs from other companies and organizations about how much more difficult this proposed provision would hit the independent channel, which shows consumers fares from a multitude of different carriers all at once.
I appreciate Andrew Applebaum’s observations about Expedia’s website. We are glad that you are pleased with how ancillary fee information is presented today. However, if you are pleased today, then I must ask why do we need this first page search results provision?
I also wanted to address John Breyault’s testimony regarding Travel Tech’s petition. He says that we could ask for consumer data at the search input screen. This is not what the proposed rule would require. Further, this proposed change from the proposed rule would face the same exact technical infeasibility issues that the first-page results do, which you will hear about in great detail from the witnesses from Travel Tech member companies.
Right before lunch, we heard from Corey Vezna of Priceline, and prior to that Jay Richmond from Amadeus and Katie Hinchin of Skyscanner. And we are pleased to hear Jay and Corey speak once more today on question 3. But all three of these experts in flight search from Travel Tech members have already touched on the technical infeasibility of the proposed first-page search results requirements and its negative impact on consumers.
I wanted to quickly take an opportunity to share thoughts from another Travel Tech member company who were unable to join us at this hearing today.
Glenn Wallace, head of product of technology at Fareportal, and previously a founding employee at Expedia, told me that, “The pricing permutations of flight schedule, fare type/cabin, and specific seats are huge, and requiring that all options and therefore all combinations are shown at the first page will place a huge computing and communication burden on industry systems, and lead to slower page retrieval times, larger web pages, and materially slower page loading times.”
Thank you again.
