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Fleeced: why Aussie travellers get ripped off

6/03/2014 Jane E Fraser
Travel money planes © Provided by The Age Travel money planes

Why are Aussies always getting fleeced?

Travel might be relatively affordable these days, but we still pay more than folk from other countries.

A family member flying here from the UK this month is paying £807, or about $1490, for her return flight to Australia on one of the world's best airlines.

What would be my chances of getting that fare in reverse?

It's impossible to do an exact comparison on airfares because of when demand peaks and flows in different countries but I did a search for flights to London on the same airline on the same dates and the best I could find was $1868 return.

Even when booking an earlybird fare at least six months ahead, it would be rare to get a fare on a top-tier carrier for under $1500 return.

Sydney traveller Luke Fairbrother struck the same issue with car hire when planning a trip to Europe for July.

A $709 quote for car hire dropped to $357 when Fairbrother, whose partner has an EU passport, tried changing the booking location to The Netherlands.

The same thing happened on two other car booking websites, with the Australian pricing at least a third higher.

I tried a few mock searches for cars and came up with similar results.

To hire a car in London, I might be paying 20 per cent more than a Brit and about 40 per cent more than an American traveller for the same class of car.

There was an occasional example of Australian pricing being cheaper but overall it was not a happy story.

I asked leading car hire companies Avis and Hertz and both pointed to the need to compare apples with apples, particularly regarding inclusions and exclusions in different markets.

Rules around the inclusion of damage and liability coverage, for example, can be different for foreign travellers compared to locals.

Where there is a genuine price difference for the same product with the same inclusions, it comes down to market forces.

“Similar to airline pricing, car rental is market driven and very dynamic,” says a spokeswoman from Avis.

“Many factors determine price, including level of demand, cost of service, currency exchange rates and the competitive environment.

“Travel companies may offer promotional rates to take advantage of growing markets or other fluctuations in demand, or simply to respond to competitive pricing.”

A spokeswoman for Hertz says even though you might be comparing prices for the same vehicle, marketing and other costs vary from country to country.

“It does not always mean that any one location is always cheaper or more expensive; prices are dynamic and vary upwards or downwards,” she says.

Qantas has a similar answer on the airline side, with different pricing attributed to variances in economic and market conditions from country to country.

“This is true of all airlines and international businesses,” a spokesman said.

“It would make no financial or commercial sense to have a uniform fare for routes, regardless of the point of origin.”

Economist Dr Tony Webber, an associate professor at the University of Sydney Business School, says while the complexities of airlines' yield management systems come into play with airfares, pricing largely comes down to the relative strength of economies.

Webber says companies in any given market will charge what they think consumers will bear.

“They get a feel for what people can afford to pay, and what they're willing to pay, and they push as much as possible towards that,” he says.

Webber says our strong economy and strong dollar are working against us in pricing matters.

“When the Aussie dollar strengthens, it gives airlines and hotels the ability to push prices up a bit more, because they know it will be cheaper for you when you get there (to your destination),” he says.

“Foreigners know the Australian dollar is strong and they target us.”

However we might feel about being deemed comparatively rich, it seems there is not much we can do about it.

A reader was so incensed about being charged more than travellers from other countries that he took the issue to the Australian Competition and Consumer Commission.

The written response from the ACCC stated that airlines are free to set their own prices in the marketplace, so long as they do it independently and don't mislead consumers.

The response went on to say that different “demand characteristics” may prompt airlines to offer lower fares in other markets.

“Although some Australian consumers may perceive this practice to be unfair, it is nevertheless legal,” it said.

Do you feel like you get ripped off as an Australian traveller? Have you had experiences where you ended up paying more than someone from another country? Do you think the ACCC should do something about it? Post your comments below.

Illustration: Simon Bosch © Provided by The Age Illustration: Simon Bosch
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