It is a common scenario for anyone booking online: That affordable hotel room or concert ticket suddenly gets pricey at checkout, when service and other fees get tacked on.
The Federal Trade Commission announced a final rule on Tuesday to end that practice. The rule requires hotels, short-term rentals and event ticketing vendors to include service fees, cleaning fees and resort fees — often characterized as “junk fees” — in the total prices that are advertised to consumers.
The rule, which becomes effective 120 days after it’s published in the Federal Register, prohibits companies from hiding the mandatory charges that often get tacked onto travel accommodations and live-event tickets. This means that instead of being able to advertise a $100 hotel room that has an added $50 resort fee, businesses must show the full $150 rate.
“Generally speaking, this is really good news for customers,” said Sally French, a travel expert with the online financial site Nerdwallet. “Often we would see an advertised room rate for $200, and then as you click through and get to the reservation stage, suddenly it’s $250.”
“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,” Lina M. Khan, the chair of the Federal Trade Commission, said in a statement announcing the rule.
Here’s what you need to know.
What’s included?
Chuck Bell, a director at Consumer Reports who has opposed junk fees for years, said that the original scope of the rule was broader, so it would have covered things like broadband internet fees and fees for movie tickets, which he called “highly frustrating to consumers.”
But the final rule’s focus on hotels, short-term rentals and live event ticketing means that other kinds of quotidian fees still don’t need to be disclosed.
Rental cars are not included, for one. There is a separate rule that would prohibit hidden fees in car sales and rentals that has been tied up in court. The fees charged by airlines are under the purview of the Transportation Department, which has similarly pushed for greater transparency. In April, the department announced a final rule that requires airlines to clearly display extra fees for checked bags, seat selections and cancellations before every ticket purchase. The airlines have taken the department to court over the rule and it has yet to go into effect.
Does it actually eliminate the fees?
No.
The rule doesn’t outlaw or reduce these fees, but its proponents say it will allow customers to evaluate the true cost of whatever they’re booking.
Ms. Khan focused on the “billions of dollars and millions of hours in wasted time” that this will save Americans searching for real price.
As hotels and ticketing companies shift these fees to the front, it might feel like things are getting pricier.
That seeming price jump will likely be the most obvious in resort hot spots, like Waikiki and Orlando, and tourism hubs like Las Vegas.
Ms. French used the example of the Excalibur Hotel in Las Vegas where, in January 2024, some rooms were advertised at $24 a night. But “then there is $8 in taxes, and then there’s $35 in resort fees. So that would bring a $24 room to $67.”
Once the rule goes into effect, the hotel would have to list the room at $67.
How will this be enforced?
The Federal Trade Commission can take action against companies that violate rules and file civil court actions against them, asking for an injunction or seeking a settlement. Though the F.T.C. doesn’t have criminal authority, it can also refer cases to the Department of Justice to investigate.
Civil penalties can be up to $51,000, per day per violation, with total penalties based on the number of people affected or the amount of harm that the company caused.
Don’t some companies already do this?
Yes.
Earlier this year, laws went into effect in California requiring upfront disclosure of fees on event tickets, hotel rooms and food delivery services, as well as resort and cleaning fees at hotels and short-term rentals. Because the California market is so large, many companies such as hotel chains that do business there decided to institute fee transparency across their websites.
Airbnb has a toggle on its website that allows users to choose to see the total including all fees. Vrbo lists two prices in its initial search results: First, the nightly rate without fees is shown. Then, just below the nightly rate, the total price of the stay is displayed, which includes all mandatory fees.
Will this last?
Maybe.
The commission passed the rule by a four to one vote, but the one dissenting vote came from Andrew Ferguson, who is President-elect Trump’s pick to lead the agency in the next term. Mr. Ferguson released a statement about the rule on Tuesday, saying that his dissent was not related to “the merits of the Final Rule, or with its compliance with the requirements of Sections 5 and 18 of the Federal Trade,” but rather its timing.
He said that it was inappropriate for the Biden administration to adopt a major new rule that it would not have to enforce and that the decision should fall to the incoming administration.
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