In a major victory for travelers, the Federal Trade Commission (FTC) has banned hidden hotel fees. This means an end to surprise resort fees that often inflate the final cost of a hotel stay. For years, these unexpected charges have been a source of frustration for travelers, making it difficult to budget accurately for vacations. But thanks to the FTC’s new rule, hotels will now be required to disclose all fees upfront, making the booking process more transparent and traveler-friendly. Read on to learn more about the new rule, how it impacts both travelers and the hotel industry, and what this means for your future vacations.
The Biden administration’s efforts to combat junk fees reached a milestone in December 2024. On December 17th, the FTC unveiled a new rule that bans the concealment of junk fees by hotels, vacation rentals, and event websites.
This new regulation aims to eliminate deceptive pricing practices that lure consumers in with low initial prices, only for additional charges—like “convenience fees” or “resort fees”—to be added at checkout. “People deserve to know up-front what they’re being asked to pay—without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina M. Khan.
While businesses remain free to set their own pricing, the rule mandates that the total price, including all fees, be clearly displayed to ensure transparency. The regulation also prevents businesses from misrepresenting any charges or fees. The FTC’s announcement noted, “By requiring up-front disclosure of the total price including fees, the rule will make comparison shopping easier, resulting in savings for consumers and leveling the competitive playing field.”
Moreover, the rule stipulates that the final price must be highlighted more prominently than other listed prices. All additional charges, such as taxes or shipping fees, must be fully disclosed, with clear explanations of their nature and purpose before any consumer commits to a payment.
How the new FTC rule on junk fees benefits travelers and guests
Travelers and guests stand to benefit significantly from the new FTC rule on junk fees. The key advantages include:
- Transparent Pricing: The rule ensures that the total price, including all fees, is displayed upfront during the booking process. This allows travelers to see the full cost of their stay or event without being surprised by hidden charges at checkout.
- Easier Comparison Shopping: With all fees displayed, guests can more easily compare prices across different hotels and vacation rentals, helping them make more informed decisions and find the best deals.
- Better Budgeting: By eliminating unexpected fees, travelers can more accurately budget for their trips, avoiding last-minute financial surprises.
- Increased Confidence: The rule fosters trust in the booking process. Knowing they won’t be hit with undisclosed charges gives guests peace of mind and encourages fairer, more honest business practices.
Ultimately, this rule empowers travelers by ensuring they get what they expect when they book, making travel more affordable and hassle-free.
What was the hotel industry’s response to the new FTC rule on junk fees?
Hotel operators have expressed mixed reactions to the FTC’s new rule banning hidden “junk fees.” Here are some key points that arose from the side of the hotel operators following the new ruling:
Concerns About Pricing Flexibility
Some hotel operators and industry groups worry that the rule could limit their ability to offer competitive pricing structures. The U.S. Chamber of Commerce criticized the rule as an attempt to micromanage businesses’ pricing strategies, potentially undermining their capacity to provide consumers with various price options.
Support for Transparency
On the other hand, some operators support the rule’s intent to promote transparency in pricing. Many believe that disclosing all fees upfront will enhance consumer trust and improve the overall booking experience. This perspective aligns with the FTC’s goal of eliminating surprise fees that can frustrate customers.
Legal and Compliance Considerations
Hotel operators are now faced with the challenge of ensuring compliance with the new disclosure requirements. This includes adapting their pricing models and marketing strategies to align with the FTC’s regulations, which could involve additional administrative efforts.
Potential for Increased Competition
Some industry stakeholders see the rule as an opportunity for fairer competition, as it may level the playing field by forcing all operators to disclose fees transparently. This could lead to more informed choices for consumers and potentially better pricing overall.