Michael Prager: The hidden agenda

Here's a big idea. The price advertised should be the price you pay. But it isn't. Not usually. Not in travel. And the practice of advertising one price and then bulking it up until the final bill is almost unrecognisable from the price that hooked you in the first place is growing, not shrinking.

Enhancements and optional extras are now the norm, not the exception, and that's a double whammy for the business traveller. Not only are you being walked down the primrose path of 'buy this, look what good value it is' only to find out that it isn't, but what about your expenses? When is an optional extra an allowable expense and which should be and which not?

There are challenges for buying, data reconciliation and expenses reconciliation.

The problems for business travel are in several areas:

1 Governments

Why should anyone be charged for a visa? If you want to visit the country and contribute to its economy, why should you pay for the right of entry? They should be paying you. The Americans have the ESTA charge and so does just about everyone else have a fee for some if not all foreign visitors.

2 Banks

Banks charge for currency exchange in three ways:

• The rate of exchange they apply, not really a hidden cost at all but rarely the best on the market.
• The transaction fee that is applied to ATM withdrawals and credit card transaction shown as 'non sterling transaction fee' or similar.
• ATM cash withdrawal fees, very common in the USA. Together with the non-sterling transaction fees these can amount to a significant sum over the course of a year and how do you expense them? There's no invoice, just a bank statement entry.

None of these are transparent. All add to the cost of a business trip. Who is bearing that cost?

3 Airlines

Ever since Ryanair made the oxymoronic statement that the reason they charge for extras is to keep the fare low it seems that every carrier is at it.

The simple fact is that it is just about impossible to book a flight at the price you are given on first click. Is that OK? And how do you manage to get full reimbursement for charges that are not invoiced and sometimes don't arrive until a month or more if they only appear on a bank statement after the trip?

4 Car Rental

On a recent trip to the USA, I rented a car at DFW airport. When I got the bill, it simply bore no relationship to the booking I had made. Charges were called different things and stuff was added that to the best of my knowledge I hadn't bought. The rental company did point out that I had initialled all of the 'accept' boxes on the document which was of course true. But, just like the 'accept terms & conditions' button on Apple & Google, it was hard to impossible to know what was free, charged for or just a technicality. In any case the final bill should at a minimum be recognisable against the booking.

5 Hotels and restaurants

This is where it gets really interesting. Tax and service are excluded on most if not all reservation systems but it's explained how much and what they are. Hidden in plain sight. Service charges, however, are getting out of control, particularly in the USA, where frankly, they are a rip off. 18.5%- 20% is standard. Have you ever thought, 'wow, that was so good I'm going to give you 18.5%'? No, didn't think so. Increasingly these service charges are not optional, they are mandatory, so what exactly are they? Not a tip, not for good service because everybody gets to share in the pot.

Now it's good that these tips get shared out among all the staff but it is not good that establishments pay staff below average or sometimes even minimum wage because of the amount the employee can make in tips. That means you're not tipping for good service. You pay the same, even for rotten service and, anyway, the price of the product, usually food and drink is not reduced because the establishment doesn't have to pay the staff wages in full; it's still retail, then you pay service staff wages! If tips are making up basic wages, well whose employee are you Mr Waiter or Mr Bartender? Mine I think, not the establishment. The model is closer to the hairdresser renting a chair in the salon and keeping their takings than to an employee on the payroll who gets extra for providing service over and above the norm.

A tour operator friend of mine tells a story of going into a well-known and high-end restaurant in New York City. He saw a bottle of wine for $130 that he rather fancied on the wine list and asked that the (20%) service charge not be added to that — which would have made it a $156 bottle of wine. They refused so he ordered a single glass of the house wine instead. Extreme response to a serious point. The habit of BYO or 'bring your own' was quite popular in the mid-20^th century but it faded as restaurants and hotels started to provide a good cellar at reasonable prices for wine that was served by knowledgeable and dedicated personnel. Maybe paying the corkage and bringing your own wine is overdue to come back into fashion if prices are hiked by 20% for no additional benefit.

Tipping aside, and it's not a small issue, there are little zingers like 'resort fee' creeping into hotel bills. In this case a fee for 'pool beds, poolside service and (wait for it) housekeeping. Isn't clean towelling and sheeting in the room rate anymore? And what if you don't use the pool? Well, in Miami at least you still pay.

What are the solutions?

Negotiating a corporate deal is sometimes the answer — to get the room rate for your travellers to include the enhanced WiFi rather than the basic or parking or breakfast depending on the travellers' profile.

That is fine for large, managed travel programmes but not for unmanaged programmes or those that allow travellers to book wherever they want subject to rate ceilings or individual business travellers. It also depends on travellers booking with these preferred partners, which isn't possible for every business destination. There are inevitably trips to places where there is no suitable property with which there is a deal and that means that it's likely that the bill will include fees for 'extras'.

There then becomes the issue of collecting proper cost data and reimbursement of expenses.

Managers need to address these issues in their policy as to what is or isn't reimbursable and ensure there is a process to collect the data and reimburse travellers for legitimate expenses.

But should this be the travel manager's problem?

Let's start a movement. 'What you see is what you pay'.

• By and large the price advertised should be the price paid
• Hidden charges should be incorporated into the headline selling price
• Where there is no choice. eg paying an online booking with plastic, don't charge extra for it
• Tips should be optional and not part of the employee's basic wage

Is that so hard?