Steve Hart: Think the holiday price is right? Wrong

COMMENT

Included in almost every advertisement for a flight or foreign holiday package is a tiny line of print that can add hundreds of dollars to your family vacation.

No other industry in the country could get away with it.

What am I talking about? The additional levies, taxes and charges that go on top of most prices advertised by travel agents and airlines.

These fees are compulsory - so why do travel companies continue to promote the lowest possible price knowing full well their customers will have to pay a known list of add-ons?

Something would be done if we arrived at the supermarket checkout with a basketful of groceries and then were charged a string of additional fees, along with a commission payment to the checkout operator.

You get the picture?

I'm not suggesting these fees are wrong, or that travel agents shouldn't be paid for their expertise (they should). But when a product is advertised at a given price, then we expect that that is the amount we'll pay.

So why does the travel industry do it? It's because, by law, travel operators here have the legal freedom to publish prices that are not the true cost of the package offered (so long as they include the small print) - and no company will dare to do the right thing by consumers and display the full cost. One can understand their reluctance.

If one travel agent advertised a return flight to Sydney for $474 (the current best price) while another offered it at $369, I know who most people would call first. And of course we mustn't forget the $25 departure tax.

It used to be that way in Australia until its version of our Commerce Commission (the ACCC) put a stop to it last year. Now, on the other side of the ditch, the advertised price for a holiday is what you pay.

However, there are still situations there where additional charges are made, for example, if a customer wants more than the advertised package offers - say a stopover, or to land at a different airport.

Professor Allan Fels was chairman of the ACCC when the law in Australia was changed. At the time he said: "Price is probably the most important influence on a consumer's purchasing decision. Like most businesses, the travel industry relies heavily on the power of advertising ... Consumers expect advertising to be fair, responsible and honest."

Wouldn't it be grand if the law changed here - if the price you saw advertised was the price you paid?

I believe best practice across most parts of the civilised world is that advertised prices are fully inclusive.

There is no reason we should not adopt best practice here.

pfThe Commerce Commission inquiry into the proposed merger of Air NZ and Qantas has ended. It could be another three weeks before we hear the decision.

There has been much talk about competition in the air across the Tasman and that this will be affected by a merger. But there are more than 12 carriers servicing this route, so maybe all this talk is really a smokescreen.

Too many people have ignored the Los Angeles route. If the merger goes ahead, Air NZ and Qantas will be the only two companies offering a direct route to LA from New Zealand.

I see that as an issue - not only for us, but for people wanting to visit our shores flying from LA on direct flights.

Until an airline other than Qantas or Air New Zealand can service that route, the merger should not go ahead.