For managers in charge of a travel budget, there is a hidden cost that, according to the Global Business Travel Association, now accounts for around 8% of total business travel expenses: Ancillaries. Ancillary costs are those additional charges, such as pre-seating, on-board meals, or hotel parking, that have become a significant revenue stream for travel suppliers, particularly airlines. These fees can range from a few rand to a few hundred per trip, depending on your choices, which can contribute a considerable amount to large corporate budgets.

Understanding the Ancillary Fee Landscape

Airlines, hotels, and rental car companies now charge separately for services that used to be part of their basic prices. This unbundling approach enables companies to offer lower initial prices and generate profits through optional add-ons.

The psychology behind this approach is that you are only presented with the add-ons once the initial booking is made, making you more likely to accept the additional charges instead of cancelling your trip. Understanding this concept is the first step in avoiding unnecessary expenses.

Airline Ancillary Fees

Airlines charge the most ancillary fees, so building a strong airline and fare selection strategy can produce major financial benefits.

Begin by selecting the appropriate airline and fare class that best suits your needs. For example, while budget airline base fares are often cheaper, their supplementary fees often exceed what full-service airlines charge for a single ticket.

Charging for baggage adds a considerable cost to the ticket price. Travelling with a single carry-on bag should be your first step, as it will eliminate the need to pay for checked baggage fees. If you must check in luggage, compare the cost difference between paying for checked bags and selecting a higher fare class that grants free checked baggage. The fare upgrade typically costs only a little more than the basic rate, while offering additional perks such as priority check-in and better seating options.

You can obtain free seats through seat selection by checking in exactly 24 hours before your flight, since airlines reserve these spots at this time. Each member in your travelling party should book their own ticket to increase the chances of getting free adjacent seats. Afterwards, you should contact the airline to request seating together. 

Accommodation Ancillaries

Hotel ancillary fees have become increasingly creative and difficult to avoid. Resort fees for amenities like Wi-Fi, along with pool access and gym facilities, are particularly frustrating since they apply to all guests, regardless of whether they use the facilities or not.

Research all hotel add-on fees before booking so you can calculate their costs into your overall comparison. To avoid parking fees, research nearby public parking options or consider negotiating free parking with regularly used vendors.

Car Rental Ancillaries

Rental car companies have perfected the art of add-on fees, adding extra costs to their basic daily rates, which often reach double the initial price.

As a starting point, decline unnecessary insurance if you’re already covered through your company insurance.

Also, avoid hefty fuel charges by returning the car with a full tank of fuel. GPS and other electronic accessories are usually overpriced. Use your smartphone for navigation instead, and bring your own phone charger rather than relying on one provided by the rental company.

Planning and Preparation Strategies

The most effective way to manage ancillary fees is through thorough planning and preparation. Your travel budget should include all projected fees, in addition to basic costs, when planning your trip. Realistic fee planning helps travellers to avoid unexpected costs while they decide which expenses to pay for and which to save.

Ancillary fees can bring real value to your travel experience, but not all fees have the same positive impact. The important thing is being aware of what you are paying for and deciding which fees are worth paying for your specific needs and situations.

The key is to treat ancillary fees as part of your overall travel budget, rather than unexpected surprises. With proper planning and strategic choices, you can reduce travel expenses while maintaining a high-quality travel experience.