Traveling This Summer? Watch Out for Travel Taxes and Fees
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But what about your hotel tax? Extra rental car fees? State and local taxes for restaurant meals? Until you actually arrive at your destination and sign for your bills, these fees are often invisible. However, these extra expenses can really pile up, and they can vary significantly depending on the city you’re visiting.
The Global Business Travel Association (GBTA) reported that travel fees could now increase your travel bill by as much as 58 percent in the cities with the highest travel taxes. Those include Chicago, Ill., in first place; New York, N.Y.; Minneapolis, Minn.; Kansas City, Mo.; and Indianapolis, Ind.
State and local governments generally use travel taxes in order to increase revenues. Rather than hitting up local residents, the governments levy extra fees against visitors. Travel taxes are used to fund a wide variety of local projects that may have nothing to do with travel and tourism.
You can’t avoid every travel fee—some of them are just the cost of playing the vacation game. However, there are a few ways you might be able to cut costs:
Choose a low-travel-tax city. If you have a choice of destinations, consider a city that charges visitors less in add-on taxes than others. According to the GBTA, those are Fort Lauderdale, Fort Myers, and West Palm Beach, Fla.; Detroit, Mich.; and Portland, Ore.
Don’t rent a car at the airport. Rental car facilities at air terminals often carry higher add-on taxes than their in-city counterparts. Check with the car rental facility in advance to see if this is the case. If so, consider using public transportation or a cab to travel to an in-town rental location and pick up your car there. The rental agency may still let you return the car to the airport facility on your way out without charging a higher fee.
Eat in. Book a hotel with breakfast included, or choose a room that offers a kitchenette. Buy groceries and prepare a few simple meals in your room to avoid restaurant taxes.
Cut other travel fees. In addition to taxes, you can cut other travel-related fees by planning ahead. Book your airline ticket online instead of through a live agent to avoid an additional fee. Firm up your schedule in advance so you don’t pay extra to change your airline flight time or departure day. Ask your car insurance company if it covers you while driving a rental car. Most do, so you can say “no thanks” to the extra, high-priced insurance offered by car rental companies. Avoid city-center hotel nightly parking fees by staying in a nearby suburb and taking public transportation into the city hub each day. Finally, if you’re traveling internationally, make sure you have a credit card that doesn’t charge foreign transaction fees.
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