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17.12.2024 - 21:23 / thepointsguy.com / Joe Biden / Lina M.Khan
On Tuesday, the Federal Trade Commission finalized a broad rule requiring various industries, including hotels, to disclose all fees in advertised prices upfront.
The final rule will prohibit hotels from excluding resort fees, also known as "junk fees," in advertised rates for short-term lodging.
In addition to hotels, the rule will also apply to vacation rentals, such as those booked through Airbnb, as well as tickets for live events like shows or sporting events.
Specifically, the rule requires businesses to display the total price most prominently when disclosing pricing information to prevent "bait-and-switch pricing tactics, such as drip pricing and misleading fees," the FTC said in a press release announcing the rule.
The rule requires businesses to "clearly and conspicuously disclose the nature, purpose, identity, and amount of those fees before consumers consent to pay," per the FTC. "For instance, businesses that exclude shipping or taxes from the advertised price must clearly and conspicuously disclose those fees before the consumer enters their payment information."
Enforcement in other industries will be handled on a case-by-case basis, per the agency.
"The FTC's rule will put an end to junk fees around live event tickets, hotels, and vacation rentals," FTC Chair Lina M. Khan said in a statement.
The rule does not prohibit lodging groups or event operators from issuing a fee or engaging in pricing strategies.
"We all know the experience of encountering a hidden fee at the very last stage of check out—these junk fees sneak onto your bill and companies end up making you pay more because they can," President Joe Biden said in a statement via email. "Those fees add up, taking real money out of the pockets of Americans."
The rule will become effective 120 days after its publication in the Federal Register.
Enforcement, or whether the rule remains in place, will ultimately be up to the Trump administration. It may be challenged, as similar rules in the travel space have been.
In April, the U.S. Department of Transportation issued separate, airline-specific rules that would have required airlines to display the full cost of a ticket (aka the fare plus certain "essential" ancillaries) upfront.
In response, airlines sued, and a federal appeals court put the rule on hold pending a final judicial outcome. This rule is unlikely to take effect under the Trump administration.
In anticipation of the FTC rule, Hilton, Hyatt, IHG and Marriott already disclose fees upfront in booking.
"IHG's channels already display all mandatory fees in the total price advertised to consumers, so IHG-branded hotels are prepared for this ruling," an IHG spokesperson said via email.
A Hilton spokesperson said: "We know
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Dec 18, 2024 • 6 min read
It’s finally happening: the end of resort fees as we know them. In a landmark announcement on Tuesday, the Federal Trade Commission (FTC) will now prohibit “junk fees,” an overarching term for hidden and misrepresented prices in the hotel, and short-term rental, and live-event ticketing, industries. For travelers, that includes all hotel booking websites and vacation rental platforms like Airbnb or Vrbo. The rule will require companies to disclose total prices upfront. Search results on an online travel agency, for instance, must include the maximum total of all mandatory fees or charges people will have to pay. With this move, consumers searching for hotels or vacation rentals should no longer be surprised by “resort,” “city,” or “service” fees inflating the advertised price. By requiring up-front disclosure of total price including fees, the FTC says comparison shopping will be easier, “resulting in savings for consumers and leveling the competitive playing field.” “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. “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. The “junk fee” FTC investigation was first launched in 2022 with two rounds of public input and over 70,000 comments. This feedback was then taken into consideration before the final ruling announced today. Expect this to take effect in 120 days. However, it’s not yet clear exactly how the FTC will enforce these mandates.
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