‘Tipping, taxes and hidden fees’: The parts of travelling to the US Australians hate

Tyler Mitchell By Tyler Mitchell Dec23,2024
The US is among the most visited overseas destinations for Australians, along with the United Kingdom, New Zealand, Japan and Indonesia.
Australia ranks as the 10th largest inbound market to the US, with 945,000 Australians travelling there in 2023 according to data from the US International Trade Administration.
While many Australians are enthusiastic about travelling to the US, there are several common gripes that can sour a vacation — although experts say they shouldn’t be deal-breakers.

What are the pet peeves Australians have about travel to the US?

A statue of a man with a cartoon mouse with a large crowd around it and a castle visible in the background

Florida is among the top states Australians choose to visit when travelling to the US. Source: Getty / Gary Hershorn

Love US, hate US

The flight time from Australia’s east coast to Los Angeles on the US west coast is around 14 hours, far less than a flight to Europe, which is around 24 hours.
Sightseeing, shopping and visits to famous places are the key reasons Australian travellers are drawn to the US, with New York, Florida, California, Nevada and Hawaii being among the most popular states to visit.

New routes are being added to the network of flights that connect various parts of both countries.

But Australians still often get frustrated during their trip to the US.
Angus Kidman, the editor-at-large at financial comparison site Finder and a travel expert, has been to the US many times over a number of years.
He says Australian travellers have been experiencing the same issues since he first started visiting the country.

Here are some pet peeves Australians have about travelling to the US:

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Tipping

Kidman said Australians are often forewarned about this difference in the socio-economic culture between the countries, but may not be fully prepared for the experience.
While it may be a “culture shock” for some, Kidman said Australians need to get used to tipping during their stay in the US and make adjustments, such as keeping some cash on hand for tipping cleaning staff in hotels.
The federal minimum wage in the US has been US$7.25 ($11.66) since 2009, according to the US Department of Labor. Thirty states have a state minimum wage that is higher than the federal minimum, along with DC.
Generally, a tip of 20 or 25 per cent is recommended for servers in restaurants.

Kidman said that while Australians may find it strange, it is a “necessary expense” for travelling in the country.

A close up of a man wearing a bracelet counting American cash

Tipping is an expected pratice in the US service industry, with 20 to 25 per cent expected for restaurant servers. Source: Getty / Constantinis

“We’re not used to the idea that tipping is something you routinely do every time you get food service. But in the US, the reality is that’s what it’s like, and the wages for people working those jobs are s–t, on the assumption they’ll get tips,” he said.

“Unfortunately, as much as you may think ‘this is objectionable, I don’t want to do it’, if you don’t do it you’re a bit of a monstrous human being because that person is not going to earn a living wage.”

Exchange rate

Australian travellers should be sure to note the exchange rate between Australian and US dollars when travelling in the US.
At the moment, $1 will get you 62 US cents. To put that another way, something costing $US1 will set you back $1.60, not including any banking fees.
However, some experts have predicted the Australian dollar will become stronger in 2025 and may rise above 70 US cents.

Kidman said it’s important to keep the exchange rate in mind when budgeting for a trip to the US.

“You’ve always got to accept that it’s hard — you’re sitting there and you see a dollar sign sitting in front of something and you think, ‘that will be the same,’ but it really isn’t necessarily.”
Professor Pierre Benckendorff from the University of Queensland’s School of Business told SBS News that unfavourable exchange rates may “dampen” a holiday and change Australians’ minds about travelling to the US at all.
“When it’s not great, it is a more expensive place to travel to but that’s the case for any country in the world where exchange rates are not favourable, so it’s not specific to the US,” he said.

He said flights between Australia and the US are set to increase in 2025, including a new route that recently opened between Dallas-Fort Worth and Brisbane on American Airlines.

Sales tax

When you go shopping in most parts of the US, you end up paying more than the advertised price.
Sales taxes are added to prices of goods in 45 states and the District of Columbia. Rates vary from state to state.
Louisiana, Tennessee, Arkansas, Washington and Alabama have among the highest sales tax rates in the country (above 9 per cent) while Alaska, Delaware, Montana, New Hampshire and Oregon have no taxes.
Hawaii, much loved for its shopping, has a tax rate lower than many states, making it popular with shopaholics.
“We pay GST on everything [in Australia] but that’s included in the price,” Kidman said.
“In most US states, that’s not the case, they’ll have a sales tax and you won’t find out about that until you actually get to the register.”

“In my head, I always assume that what I’m buying is about 10 per cent more.”

A resort pool in front of the ocean, surrounded by palm trees and deck chairs

Resort fees can be hidden costs but they will be banned from next year. Source: Getty / iShootPhotosLLC

Resort fees

Many big hotels in the US charge you a resort fee.
This fee covers expenses incurred for certain services and amenities that aren’t included in the room rate.

“People do get caught out and I’ve advised friends and colleagues on this when they’re looking at hotels online because they’ll look at American sites and say, ‘the booking is so much cheaper through this site,’ and it’s because in the US they don’t have to disclose the resort fees up front,” Kidman said.

Kidman said resorts burying fees into their rate-per-night is an issue, particularly in Las Vegas and Florida.
However, the US Federal Trade Commission (FTC) ruled this week to ban these fees. FTC chair Lina Khan described the fee as “unfair and deceptive pricing practices”.

The ban is set to come into effect early next year.

ESTA

The Electronic System for Travel Authorization (ESTA) allows citizens of certain countries to enter the US for less than 90 days without a visa.

The ESTA costs U$S21 ($33.70) and the US Department of Homeland Security recommends travellers apply for it at least 72 hours before departing.

A blue sign in a metal frame next to a door at an airport terminal. The sign reads: Welcome to the United States in white print. Underneath is written: US Customs and Border protection

Miami International Airport. Source: Getty / Jeff Greenberg/Universal Images

However, Benckendorff said it can be complicated for some travellers and sometimes easy to forget.

“It’s an extra bit of paperwork and you can’t get into the country without completing that,” he said.

“Although most airlines are pretty good usually at reminding passengers that they need to do that, it’s something that can catch you out if you’re not used to it.”

Getting bumped off flights

Having a valid ticket and seeing the plane leave without you is not uncommon in the US.
Passengers who take flights from within the US can be denied boarding or, “bumped off” in ordinary terms.
Airlines are allowed by law to overbook flights i.e. sell more tickets than there are seats on a plane in order to minimise their losses and maximise revenue.
When a flight is overbooked, the airlines ask passengers to volunteer to be bumped off. Those who volunteer are booked on another flight and often given compensation such as travel vouchers, free meals, hotel accommodation etc. Those who do not are booked on other flights or refunded.
The US Department of Transportation website states: “The business practice of bumping is not illegal. Airlines oversell their scheduled flights to a certain extent in order to compensate for ‘no-shows’. Most of the time, airlines correctly predict the ‘no shows’ and everything goes smoothly. But sometimes, passengers are bumped as a result of oversales practices.”

According to the Air Travel Consumer Report issued in September by the Office of Aviation Consumer Protection of the US, over 92,000 passengers were denied boarding in the April-June quarter by the top 10 airlines in the country.

The improvements

Kidman said there have been two major improvements to US travel.

There has been an increase in the availability of card-based payments and border processing has become more streamlined at airports — although it is still far from perfect in some parts of the country.

While tipping is very specific to the experience of travelling to the US, Kidman said its far more likely travellers object to gun laws or politics rather than issues with tipping or taxes.

Benckendorff agreed that on the whole, these frustrations are little more than “minor annoyances” on holidays and Australians are far more likely to be turned off by issues such as politics or crime rates.

Tyler Mitchell

By Tyler Mitchell

Tyler is a renowned journalist with years of experience covering a wide range of topics including politics, entertainment, and technology. His insightful analysis and compelling storytelling have made him a trusted source for breaking news and expert commentary.

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