Hidden fees that can substantially jack up the price of a hotel room could be a thing of the past after the Federal Trade Commission (FTC) finalized a rule that will require hoteliers to disclose so-called “resort,” “convenience,” and “service” fees as part of the total price of a stay.
The Junk Fee Rule approved Dec. 17 by the FTC will largely require hotel companies and firms that sell tickets for live events to include all fee information in their advertising, not as an add-on that’s only revealed upon checkout.
FTC: “People Deserve to Know Upfront”
“People deserve to know upfront 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. “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.”
In addition to requiring sellers to disclose the total cost of a hotel stay or event ticket, the FTC says companies must inform buyers whether such fees are refundable.
However, the rule does not prohibit any type or amount of fee or bar any pricing strategies used by hotel companies or ticket sellers like Ticketmaster and Live Nation.
Khan urged law enforcement agencies “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.”
Under the new Junk Fees Rule, businesses must “clearly and conspicuously disclose the true total price inclusive of all mandatory fees whenever they offer, display, or advertise any price of live-event tickets or short-term lodging.” Businesses cannot misrepresent any fee or charge in any offer, display, or ad for live-event tickets or short-term lodging, according to the FTC.
Total pricing information must be displayed more prominently than other price information, according to the new rule. Businesses may still exclude certain fees, such as shipping or taxes, from upfront pricing but will be required to “clearly and conspicuously disclose the nature, purpose, identity, and amount of those fees before consumers consent to pay.”
The American Hotel and Lodging Association (AHLA) praised the FTC rule as well as related Congressional action.
“We firmly believe that one national standard is the right approach for consumers and business,” said AHLA President and CEO Rosanna Maietta, adding that “consumers deserve to have transparency no matter where or how they book their stays.”
