Travel Advisors Express Support of Federal Trade Commission's Proposed Rule on Junk Fees

09.02.2024 - 14:13 / travelpulse.com / North America / Patrick Clarke

The American Society of Travel Advisors (ASTA) has submitted comments to the U.S. Federal Trade Commission (FTC) on its Notice of Proposed Rulemaking (NPRM), which would prohibit unfair or deceptive practices relating to fees for goods or services.

Focusing specifically on junk fees often charged by hotels and other short-term lodging services that result in a misleading total cost, ASTA expressed support for transparency.

"As an advocate for not only travel agencies and individual advisors but also the millions of consumers who rely on our members’ services, ASTA believes that the rule as proposed would greatly benefit consumers of hotel and other short-term lodging services, and it is in that context that ASTA has the greatest interest in the proposed rulemaking," the organization said in a letter signed by Peter N. Lobasso, Senior Vice President & General Counsel, ASTA.

"While charging mandatory resort fees has come under greater scrutiny in recent years, up until now predominantly by regulators and enforcement agencies at the state level, the practice remains common in the industry."

"Moreover, the manner in which resort fees, also alternatively referred to by hoteliers as 'amenity fees' or 'destination fees,' among other terms commonly used, are disclosed to consumers is highly inconsistent," ASTA added. "And, as many hotel properties are independently owned and operated franchises, there is little uniformity in this regard even among hotels doing business under the same brand name."

The organization is calling for uniform application of the full disclosure obligation.

"ASTA strongly believes that all consumers, regardless of where or how they choose to book their travel, have a right to expect that hotels, as well as OTAs, short-term rental intermediaries and other distributors of lodging services, provide complete pricing information, exclusive of any Government Charges, upfront in a transparent manner to permit meaningful comparison shopping. Moreover, we are of the opinion that the full disclosure obligation should apply uniformly irrespective of the distribution channel or medium used by the consumer when booking a hotel room."

ASTA also asked for clarity regarding proposed penalty provisions in the context of intermediated transactions.

"As a matter of fairness, we believe intermediaries that reasonably rely on erroneous information provided by the entity charging the fee should be relieved of liability for the error. To that end, ASTA respectfully requests that the Final Rule include either an outright exemption or a 'safe harbor' mechanism to protect an innocent third-party seller from enforcement action in this scenario."

ASTA notes that travel agencies in the aggregate were responsible for $18.7