A New York Times Magazine article ponders why the ‘hidden fee’ economy works–why, for instance, consumers put up with hotels charging outrageous sums for items in the mini-bar.
The article summarizes the explanation theorized by some economists. But I’ve long felt that a big factor in the case of hotel fees and other travel-related fees is the expense account. Consumers are more willing to pay an unreasonable charge if the company foots the bill than if they had to pay it themselves.
The effect of expense accounts may not explain the ‘hidden fee economy’ as a whole, but it’s bound to play a big role in the travel-related sector.
As a side note, on the few business trips I’ve made over the years, I was so outraged by the fees that I refused whenever possible to incur them, even though my company paid the bills. Maybe if I traveled regularly, I wouldn’t be so diligent. Who knows.
Categories: Economics