FTC issues rule banning hiding of “junk” hotel and ticket fees

The Federal Trade Commission has issued a final Junk Fees Rule to prohibit bait-and-switch pricing and other tactics used to hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries. In addition, Congress proposed a continuing resolution (CR) that would protect consumers from hidden lodging fees.
“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. “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.”
The Junk Fees Rule is designed to ensure that pricing information is presented in a “timely, transparent and truthful” way to consumers of live-event tickets and short-term lodging, two industries whose pricing practices the commission has studied in particular. Consumers searching for hotels or vacation rentals or seats at a show or sporting event will no longer be surprised by a pile of “resort,” “convenience,” or “service” fees inflating the advertised price. By requiring up-front disclosure of total price including fees, the rule will make comparison shopping easier, resulting in savings for consumers and leveling the competitive playing field, according to the FTC.
The commission launched this rulemaking in 2022 by requesting public input on whether a rule could help eliminate unfair and deceptive pricing tactics. After receiving more than 12,000 comments on how hidden and misleading fees affected personal spending and competition, the FTC announced a proposed rule in October 2023 and invited a second round of comments. The commission received more than 60,000 additional comments which it considered in developing the final rule.
The FTC estimates that the Junk Fees Rule will save consumers up to 53 million hours per year of wasted time spent searching for the total price for live-event tickets and short-term lodging. This time savings is equivalent to more than $11 billion over the next decade.
In addition to the FTC rule, Congress proposed a continuing resolution based on the House-passed No Hidden FEES Act and the Senate’s Hotel Fees Transparency Act. It includes a provision that would create a nationwide standard for up-front, fee-inclusive lodging price displays. If passed, this provision would ensure that all consumers, no matter where they shop for lodging, will know exactly what they will be paying with no surprise fees.
AHLA is urging “swift passage” of the resolution. “For years, AHLA has been leading the charge to establish a single, federal standard for lodging fee display across the industry because consumers deserve to have transparency no matter where or how they book their stays,” said Rosanna Maietta, president/CEO, AHLA. “We believe the fee-transparency provision included in the continuing resolution is the best way to create a clear set of federal fee-display rules across the lodging industry. AHLA appreciated the steadfast support of Sens. Klobuchar and Moran as well as Reps. Kim and Castor for their leadership on this important issue and their work getting this significant win for guests included in the CR. We are also grateful to the FTC for including much of AHLA’s perspective in its final rule, which was released today.
She continued, “We firmly believe that one national standard is the right approach for consumers and business and that the legislation included in the continuing resolution best accomplishes that goal.”
AHLA’s most recent data shows only 6% of hotels nationwide charge a mandatory resort/destination/amenity fee, at an average of $26 per night.
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