U.S. hotels and short-term rental sites will soon have to disclose the total cost to consumers – including all fees – when showing prices online.
This week, the Biden Administration’s Federal Trade Commission announced a new federal rule targeting “junk fees” that would require hotel chains, short-term rental platforms, and live event promoters to disclose all fees upfront in the total cost. The rule would prohibit what the FTC calls “bait-and-switch” pricing in hotel rates, short-term rentals, and live-event ticketing, according to a news release.
The rule will go into effect 120 days, so the earliest travelers can expect these changes is late March.
Most travelers have, unfortunately, become accustomed to these so-called junk fees, whether it’s clicking on the price of an Airbnb only to see that a $200 “cleaning fee” has been tacked on to your total, or booking a hotel and being slapped with a $75-per-person “resort fee” when you check-in.
The FTC says “resort,” “convenience,” and “service” fees added to checkout totals are the main culprit. It also singled out “drip pricing” (i.e. when each section of the checkout process seems to add more cost to your total) and said other issues will be handled in a case-by-case basis.
Beyond being annoying, the FTC called it “unfair and deceptive” to consumers and a practice that can “undercut honest businesses,” according to the release.
“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,” FTC Chair Lina M. Khan said in a statement.
In the release, the FTC said this rule will extend to advertising, too, requiring resorts, hotels, motels, inns, short-term rental platforms, and more to show-off the “all-in total price” in any ads. That includes both the point-of-sale (i.e. the hotel or rental website) and in advertising you might see on websites, in apps, over email, and even in physical media like billboards and mailers, too.
The federal government hopes the rule will make it easier for consumers to compare prices and shop around when booking hotels and short-term rentals. It’s an effort a few years in the making after the Biden Administration started targeting what it calls “junk fees” in early 2023.
This new rule doesn’t include shipping or taxes among the fees that must be included in the total upfront price, so long as the company conspicuously discloses them before a customer enters their payment information. It also wont encompass “contingent” fees, or personal preference fees that consumers may add on later. Those include things like pet fees, fees for late payments, property damage fees, smoking fees, and more.
Bottom Line
The cost of travel lodging is going to be more transparent in 2025 after the Federal Trade Commission passed a rule requiring hotels and short-term rental sites to disclose all fees up front.
The Junk Fees Rule will prohibit companies from tacking on “cleaning fees” or “resort fees” at checkout, instead requiring the companies to show the all-in price upfront.
