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CONSUMER REPORT

Surcharges Becoming Travel Business Reality : Price hikes: Airlines, cruises and tours are raising fees to cover rising fuel costs. It pays to know when quoted prices are locked in, and when they aren't.

December 02, 1990|JACK ADLER

Surcharges--sometimes an extra fee on a tour bill, sometimes just a more expensive airline ticket--have become a noticeable part of traveling during the past few months.

Technically, according to industry professionals, a surcharge is any additional flat charge that shows up unannounced on a travel bill for any specific purpose beyond the standard fare. It might be a $10 charge by an airline to cover security costs or $5 a day charged by a cruise line in port taxes.

"Surcharges are really an additional flat charge per passenger applied for a specific purpose, and they should be identified as a separate item on pricing so consumers can see what the amount is," said Art Rodney, president of Los Angeles-based Crystal Cruises.

"Otherwise, extra charges are just price increases, though these increases can be based on the same reasons as the surcharges," said Rodney, attempting to bring some order to a potentially confusing consumer situation.

"A fare increase is a permanent increase, while a surcharge is something tacked on in anticipation that it will be eliminated when the cause is gone," said Bill Jackman of the Airport Transport Assn., a Washington, D.C.-based airline trade group. "Some causes, however, may go on for a long time."

The major cause of travel-related price increases these days, as most consumers know, is the increase in fuel costs stemming from the Persian Gulf crisis. The result has been fare increases on airline tickets, cruises and tours.

Since the crisis began in early August, domestic air carriers have raised their prices, on the average, between 5% and 15%. International carriers have raised rates between 3% and 10%.

And few experts expect air fares to go down when the current fuel crisis is over.

"Based on the fuel shocks of 1974-75 and 1980-81, we don't expect air prices to return to the former level, though competition may drive some fares down," Jackman said.

In addition, airlines may impose flat surcharges for security reasons. Pan Am, for example, has a $10 security surcharge, shown on tickets as a separate tax without specific identification, according to travel agent Martha Scott of Glendale Travel.

Although cruise lines have generally adopted a more cautious policy concerning across-the-board price hikes, consumers signing up for cruises should make sure they understand whether a price hike is possible between sign-up and final payment, and what recourse they have should one occur after they have made a substantial down payment.

On Aug. 10, Holland America Line announced that it was guaranteeing all currently published fares for departures through Jan. 31, 1991, on bookings for which deposits had been paid by Sept. 15. Special Expeditions said it would absorb all increases in fuel costs and guaranteed no surcharges for its sailings, at least through 1990. American Hawaii Cruises froze 1990 cruise and air fares through sailings of May 25, 1991, for passengers who book by the end of December.

However, other lines--such as Dolphin and Epirotiki--have imposed fuel surcharges.

After initially "swallowing" higher fuel costs, according to company spokeswoman Martha Arrue, Dolphin, imposed per-person surcharges on Oct. 1 of $10 for three-night cruises, $15 for four-night cruises and $30 for seven-night cruises.

"These surcharges will stay in effect until things settle down in the Persian Gulf," said Arrue.

Epirotiki includes fuel surcharges of $5 per day for three- and four-day cruises and $4 per day for seven- and 14-day Mediterranean sailings. These charges are designated on tickets only as a "port tax."

As for tour operators, when they experience price increases on various legs of their packages, such as air transportation or hotel rooms, those charges are often passed along to consumers.

"We don't expect any surcharges as far as land arrangements go in our 1991 programs," said Chuck Winn of Van Nuys-based Brendan Tours, which offers packages to Europe, South America and the South Pacific. "But this could change. Prices will go up dramatically anyhow in 1991, and we want to be careful to price tours so that people feel they're getting good value and not being gouged. Surcharges can really diminish the market for us."

Consumer advocates caution travelers to carefully examine the conditions/responsibilities section of their tour brochures before making initial down payments on tours.

Cruise and tour operators generally leave themselves an out that allows them to raise prices right up to the date of departure. Typically, a clause protecting the tour operator will read: "Prices subject to change without notice."

That policy, of course, differs from that of airlines, which automatically protect consumers from price increases as soon as they have paid for their tickets in full.

Most guarantees by tour operators, in any form, take effect only upon full payment, not just a deposit.

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