THE FEDERAL TRADE Commission finalized a rule on Tuesday requiring industries, including hotels, to disclose all fees upfront in advertised prices. The rule bans hotels from excluding resort fees, often labeled "junk fees," from advertised rates for short-term lodging. It takes effect 120 days after publication in the Federal Register.
The rule mandates businesses to prominently display the total price to prevent "bait-and-switch tactics, such as drip pricing and misleading fees," the FTC said in a statement.
Outgoing President Joe Biden said he has always prioritized families and hardworking Americans and urged his administration to focus on lowering costs.
“Today, the Federal Trade Commission is doing just that by banning hidden junk fees when you book a hotel or purchase event tickets,” Biden said. “We all know the experience of encountering a hidden fee at the very last stage of checkout—these junk fees sneak onto your bill, and companies end up making you pay more because they can. Those fees add up, taking real money out of the pockets of Americans.”
Biden's term is set to end on Jan. 20.
Miraj Patel, AAHOA chairman, emphasized that transparency builds trust between hoteliers and guests and praised the FTC's action.
"By requiring upfront disclosure of total pricing, this rule empowers consumers to make informed decisions and ensures a fair, competitive environment for hoteliers who have always practiced honest pricing,” he said.
The rule also applies to vacation rentals, including Airbnb, and tickets for live events, such as shows and sports, the FTC said. It requires businesses to prominently disclose the total price, including all mandatory fees, whenever they advertise services, displaying it more prominently than other pricing information.
“People deserve to know upfront what they’re being asked to pay—without worrying they’ll later be saddled with mysterious fees they haven’t budgeted for and can’t avoid,” said Lina Khan, FTC chairwoman. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time. I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”
Rosanna Maietta, AHLA president and CEO, said AHLA has long advocated for a single federal standard on lodging fee display to ensure transparency for consumers, regardless of how they book.
“We believe the fee-transparency provision in the continuing resolution is the best way to establish clear federal fee-display rules across the lodging industry,” Maietta said. “AHLA appreciates the steadfast support of Sens. Amy Klobuchar and Jerry Moran, as well as Reps. Young Kim and Kathy Castor, for their leadership on this important issue and their efforts to secure this significant win for guests in the CR. We are also grateful to the FTC for incorporating much of AHLA’s perspective into its final rule, released today.”
“We firmly believe that one national standard is the right approach for consumers and businesses, and the legislation included in the continuing resolution best accomplishes that goal,” she said.
The FTC estimates the rule will save Americans up to 53 million hours annually on pricing searches, equating to over $11 billion in savings over a decade. It takes effect 120 days after publication in the Federal Register, expected in April 2025.
Laura Lee Blake, AAHOA president and CEO, called the ruling a win for consumers and businesses.
"Uniform and transparent pricing practices ensure clarity and fairness, allowing guests to budget confidently while protecting the integrity of our industry,” Blake said. “AAHOA is proud to support measures that foster trust and improve the guest experience."
In anticipation of the FTC rule, Hilton, Hyatt, IHG, and Marriott already disclose fees upfront in booking, The Points Guy reported.
"IHG's channels already display all mandatory fees in the total price advertised to consumers, so IHG-branded hotels are prepared for this ruling," an IHG spokesperson was quoted as saying.
"We know consumers prioritize transparency, and in 2023, Hilton made proactive changes to our technology to further enhance the display of mandatory fees upfront on all Hilton websites and apps,” a Hilton spokesperson told The Points Guy. “We continue to advocate for the upfront display of fee-inclusive pricing across all booking platforms that sell our inventory."
AHLA’s latest data shows that only 6 percent of hotels nationwide charge a mandatory resort, destination, or amenity fee, averaging $26 per night.
The Junk Fees Rule aligns with AAHOA’s push for fairness and transparency in lodging. Earlier this year, AAHOA backed the No Hidden FEES Act, aimed at upfront disclosure of mandatory lodging fees. Similarly, AHLA supported bipartisan bills, including the House-passed No Hidden FEES Act and the Senate’s Hotel Fees Transparency Act.
Last week, the FTC sued the largest U.S. wine and spirits distributor, alleging Robinson-Patman Act violations that harmed small businesses by restricting access to discounts and rebates and limiting competition with larger chains.
