Hidden Junk Fees Rule

The US Federal Trade Commission (FTC) adopted a new rule requiring that prices displayed include all mandatory fees. The new hidden junk fees rule applies to not just short-term lodging like hotels and resorts, but also to live-event ticketing. The new rule prohibits hotels and other short-term lodging from showing pricing that excludes mandatory fees like resort fees.

Rule Requirements

The new FTC rule requires hotels, vacation rentals, and other short-term lodging providers to be transparent and upfront about their pricing. They can no longer display prices that exclude mandatory fees, such as resort fees.

To be clear, the hidden junk fees rule does not prohibit the fees themselves. Businesses can continue to charge resort fees, convenience fees, and any other fees they wish. Rather, the rule requires those fees to be disclosed up front from the beginning of the booking process. As the FTC put it,

[The new rule] does not prohibit any type or amount of fee, nor does it prohibit any specific pricing strategies. Rather, it simply requires that businesses that advertise their pricing tell consumers the whole truth up-front about prices and fees.

One of the goals that the FTC cited is to make comparison shopping easier. Indeed, it is much harder to compare pricing across different hotels (even within the same brand) when you have to keep clicking through multiple screens or go up until the payment page to see what the final price really is.

Also, the rule requires businesses to display the total price more prominently than most other pricing information. This means that the most prominent price in an ad needs to be the all-in total price.

Background of the Rules

Travelers (including award travelers) have long complained about hidden fees and how they make it difficult to gauge the real price of a booking.

The FTC had first announced this rule making in 2022. The public input requested that year yielded over 12,000 comments from the public. The FTC then announced the proposed rule in October 2023, inviting a second round of comments. The agency claims to have received over 60,000 comments (!) in response to the rule proposal.

It's no surprise that mandatory fees are hugely unpopular, especially more so when they are hidden through deceptive practices. But that 60,000 figure is still surprising to me.

Hidden Junk Fees Rule: ToP Thoughts

The US Federal Trade Commission's newly-adopted hidden junk fees rule requires hotels and other businesses to disclose total pricing up front. The rule prohibits businesses from hiding mandatory fees such as resort or convenience fees when displaying pricing. This rule has been long overdue given how much short-term lodging and ticket selling businesses bait-and-switch customers by hiding fees throughout the booking and purchase process. The rule goes into effect 120 days after it is published in the Federal Register.