The Democrats taking control of the U.S. House of Representatives and Republican term limits on committee chairs will likely lead to a new lineup of committee leaders that would be a mixed bag for the travel industry and travelers.
Among the expected changes, Representative Peter DeFazio, a Democrat from Oregon, is in line to assume the chairmanship of the House Committee on Transportation and Infrastructure, taking over from Bill Shuster, a Republican from Pennsylvania.
“DeFazio might be known to ASTA (American Society of Travel Advisors) members as the foremost Democratic proponent of the airline-supported Transparent Airfares Act, as well as a provision in the 2018 FAA bill expanding requirements for agents to refer customers to the Department of Transportation insecticide website if they are traveling to a country that might use insecticide on commercial flights,” said Eben Peck, ASTA’s executive vice president, advocacy.
The so-called Transparent Airfares Act has been on the wish list of U.S. airlines for several years; they unsuccessfully tried to attach it to the FAA Reauthorization bill, which became law in October. The airlines were trying to overturn the Transportation Department’s 2012 full-fare advertising rule, which requires airlines to advertise the full price, including taxes and fees, that travelers would have to pay.
Meanwhile, the Air Travel Fairness, a coalition backed by Travel Tech (online travel agencies, metasearch companies and global distribution systems), ASTA, Travelers United, and the Business Travel Coalition, hopes to get the Transportation Department to reopen a request for information on forcing airlines to more widely distribute fare and fee information beyond their own channels.
“The airlines have long enjoyed not only a close relationship with the Department of Transportation, but also with the congressional committees tasked with protecting American consumers and conducting oversight of the highly consolidated airline industry,” said Chris Grimm, executive director of Air Travel Fairness. “These relationships have emboldened the airlines to engage in unchecked anti-competitive and anti-consumer behavior, resulting in higher fares and fees and reduced transparency. With new leadership expected atop both the Senate Commerce and House Transportation and Infrastructure Committees, Air Travel Fairness looks forward to working with members on both sides of the aisle to ensure Congress shifts its focus from protecting carriers to protecting consumers and choice.”
It’s unclear whether to force some of these changes, such as forcing airlines to distribute ancillary services information through global distribution systems and metasearch sites, would require new legislation.
“The DOT already has authority to stop unfair and deceptive practices like when airlines hide fare information to drive consumers to higher-priced options,” Grimm said. “We will look for any and every legislative channel to get DOT to enforce existing consumer protections.”
From Cuba travel to limits on airline change fees and requirements for independent contractors — there about 20,000 travel agent independent contractors in the U.S., as well as some 750,000 Uber drivers — the Democrats usurping Republican control of the House is unlikely to trigger widespread changes on these issues.
“While this certainly represents a change in the balance of power in Washington, President Trump remains in office and retains full control of the federal bureaucracy, and any bills passed by the Democratic-controlled House would need to be passed by the Republican-led Senate and signed by the President to become law and vice versa,” Peck said.
The fact that FAA Reauthorization, which is the epicenter of many provisions that impact airlines and their passengers, will only come up again five years from now, also tamps down potential changes on airline-related issues.
Peck said the Democrat-controlled House may pass bills further opening up travel to Cuba, but they are unlikely to advance because of GOP domination of the Senate.
Like many of the proposed legislative changes that Peck and others point to, their merits and demerits depend upon where you sit. The airlines, for example, wanted to show that the full price of airfares gets inflated by government-mandated taxes and fees while travelers and travel advisors want to know and show, respectively, what consumers will have to pay. The travel agent trade group opposed a provision that would have forced travel advisors to make disclosures to travelers on the phone about airline insecticide use, but perhaps consumers would have welcomed knowing more.
Another panel, the House Committee on Education and the Workforce, will get a new chair, who will likely be ranking member Bobby Scott, a Democrat from Virginia. Scott, like many of his Democratic peers, favors measures that would make it harder for companies, such as travel agencies, to use independent contractors and ensures that they would be subject to overtime rules.
On several key issues for the travel agency trade group, it is more aligned with the Republican majority. For example, travel agencies would face penalties for failing to make certain disclosures related to selling cruises under legislation Democrats have proposed. Some of these measures originated after Carnival’s notorious “poop cruise” in 2014.
“In years past, Democratic bills have been introduced in Congress to up federal oversight of the cruise industry while adding new disclosure burdens with financial penalties and even jail time for noncompliance for travel advisors who sell cruises,” Peck said. “Next year we may see bills similar to these, which ASTA strongly opposes, introduced but they are unlikely to advance in a Republican-controlled Congress.”
Term Limits Will Change Leadership of Key Senate Committee
Another committee change will take place in the Republican-controlled Senate as Sen. Roger Wicker, a Republican from Mississippi, is expected to become chair of the Senate Committee on Commerce, Science and Transportation. That’s because current chair John Thune of South Dakota is the favorite to become the Senate Majority Whip, replacing Senator John Cornyn of Texas, who will have to leave that post because of Republican-imposed term limits on such positions.
Wicker backs consumer-friendly protections against over-the-top change or cancellation fees, a position U.S. airlines opposed and managed to block from insertion into the FAA Reauthorization bill.
Peck said it’s possible that Wicker will push these changes, “but the FAA bill is a five-year bill through 2023 so opportunities for changing aviation policy will be very limited.”
Of course, Congress will pass plenty of laws during an era of divided government and travel industry lobbying groups dealing with hotels, airlines, and travel agencies won’t cease pushing their agendas.
The hotel industry, for example, faces a substantial labor shortage in the U.S., and the American Hotel & Lodging Association will undoubtedly continue to press for immigration reform, including allowing immigrants to work in jobs where Americans can’t be found to fill them.
Expedia Thinks Stalemate Is a Possibility
Philip Minardi, Expedia Group’s director of policy communications, said legislation could grind to a halt with a divided Congress, but infrastructure initiatives may be a place where a bipartisan consensus can be built.
“Both parties support infrastructure, but the question has always been how to fund the estimated $1 trillion cost of new infrastructure programs,” Minardi said.
If gridlock rules the day on the national level, Minardi said, they online travel industry may shift its focus to tax and short-term rental regulations on the local level. “Expedia Group continues to work collaboratively with officials on policies to legalize and prudently regulate the short-term rental industry—and with key headwinds in cities like San Diego, San Antonio, and Seattle, there may be an open door for more cities, like New Orleans, and state to implement fair and effective rules in the new year,” he said.
Minardi expressed regret that “a champion of consumer protection issues” like Missouri Democratic Senator Claire McCaskill went down to defeat on Tuesday night, but he said Expedia Group looks forward to working with legislators from both parties.
Trade Groups Chime In
The American Hotel & Lodging Association CEO Katherine Lugar and the U.S. Travel Association CEO Roger Dow issued separate statements on the outcome of the midterm elections.
Lugar said: “AHLA looks forward to working with Congress, the Trump Administration, governors, state legislators, and mayors across the country to strengthen our communities, protect consumers, and keep our economy growing. With an estimated 900,000 vacancies in the hospitality industry, AHLA and our members are focused on policies and programs that will address our workforce needs and allow us to continue providing our guests with world-class service. Hoteliers will continue to work across the aisle to advocate for important policy priorities, which include increasing our talent pipeline and upskilling our workforce, comprehensive immigration reform, promoting international and domestic travel and tourism, and ensuring a level playing field in the lodging sector.”
Both groups called for bipartisan legislative efforts.
“We have long stressed that travel is not a red or blue issue—it’s a red, white and blue opportunity,” Dow said. “Our approach might change slightly depending upon who’s in office, but our mission to make sure travel and tourism are part of the policymaking discussion never does. Both parties recognize the economic power of increasing travel to and within the United States, and that the 15.6 million our industry helps employ are Republicans and Democrats and everything in between.”
Delta Air Lines also struck a bipartisan tone, but in a more visual way.
Photo Credit: Democratic gains in the U.S. House of Representatives will force changes in the leadership of two key committees that deal with travel and workforce issues. Bloomberg