New FTC rules require hotels to disclose all upfront fees

On Tuesday, the Federal Trade Commission finalized a broad rule requiring various industries, including hotels, to upfront disclose all fees in advertised prices.

The final rule will prohibit hotels from excluding resort fees, also known as “garbage fees,” from advertised rates for short-term lodging.

In addition to hotels, the rule would also apply to vacation rentals, such as those booked through Airbnb, as well as tickets to live events like shows or sporting events.

Specifically, the rule requires businesses to display the total price most prominently when disclosing pricing information to prevent “bait and switch pricing tactics, such as drip pricing and misleading charges,” the FTC said in a report. press release announcing the regulations.

The rule requires businesses to “clearly and conspicuously disclose the nature, purpose, identity, and amount of such fees before consumers agree to pay,” according to the FTC. “For example, businesses that exclude shipping or taxes from advertised prices must clearly and prominently disclose those fees before consumers enter their payment information.”

Enforcement in other sectors will be handled on a case-by-case basis, according to the agency.

“The FTC rule will end junk fees surrounding live event tickets, hotels and vacation rentals,” FTC Chairwoman Lina M. Khan said in a statement.

This rule does not prohibit lodging groups or event organizers from setting fees or engaging in pricing strategies.

President Joe Biden said in an email statement: “We all know the experience of encountering a hidden fee at the final payment stage — these junk fees sneak into your bill and ultimately companies force you to pay more because they can.” “Those fees add up, taking real money out of Americans’ pockets.”

This rule will take effect 120 days after its publication in the Federal Register.

Enforcement or whether the rule remains in place will ultimately be up to the Trump administration. It can be challenged, as can similar rules in the tourism sector.

In April, the U.S. Department of Transportation issued its own, airline specific regulations that would require airlines to display up front the full cost of a ticket (aka the fare plus certain “essential” extras).

In response, the airlines sued and a federal appeals court suspended the rule pending the final outcome. This regulation is unlikely to take effect under the Trump administration.

Anticipating FTC regulation, Hilton, Hyatt, IHG and Marriott disclosed upfront fees when booking a room.

“IHG channels already display all mandatory fees in the total advertised price to consumers, so IHG-branded hotels are prepared for the ruling,” an IHG spokesperson said via email. This”.

“We know consumers prioritize transparency, and in 2023, Hilton proactively changed our technology to further enhance the upfront visibility of required fees,” a Hilton spokesperson said. across all Hilton websites and apps. We continue to support upfront visibility of all-inclusive pricing across all of our inventory-selling booking platforms.”

Representatives for Hyatt and Marriott did not respond to requests for comment by the time of publication.

Since 2022, Airbnb has given travelers the option to filter results using the Show Total Price feature. This feature displays pre-tax and other government fees in search results, on maps, filters, listing pages, and favorites. This includes a pricing breakdown that includes fees charged by hosts, service fees, discounts, and Airbnb taxes.

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