Transparency is the buzzword of the moment, and it’s about to take on a whole new meaning. On December 17, 2024, the U.S. Federal Trade Commission (FTC) unveiled a fresh mandate that poses a significant shift in how hotels, vacation rental sites, and event ticket sellers operate. This bipartisan “junk fees” rule, set to kick in around April 2025, will require these entities to display all mandatory charges upfront. Forget those irritating last-minute additions like resort, convenience, cleaning, or service fees—the full cost will be clear right from the start.
Hotels have often lured customers with seemingly low rates, only to spring additional fees such as resort charges at the end of the booking process. These fees can tack on an extra $20 to $50 per night, forcing travelers to pay even if they don’t plan to use any of the resort’s amenities beyond the room itself.
The FTC predicts that this new rule will save consumers up to 53 million hours each year that would otherwise be spent deciphering the true cost of accommodations and event tickets. So, what does this new rule mean for you?
Once the rule takes effect, those pesky resort fees and other hidden charges will no longer catch you by surprise after you’ve picked a hotel. The price you see upfront will be the total amount you’ll need to pay, including all required fees. This makes it much simpler to compare prices across different accommodations.
The rule doesn’t eliminate any fees; it simply ensures that the most advertised price is the all-inclusive amount that encompasses these fees. By prohibiting hotels from disguising travel fees at the final booking stage, you can more easily make informed comparisons.
Businesses can omit some permissible fees, like taxes and shipping, but must disclose their “nature, purpose, identity, and amount” before you make a payment. For instance, if taxes aren’t included in the advertised rate, the total taxes due must be displayed before you proceed with payment, according to the FTC.
Even though the rule isn’t in place yet, some companies are already adopting more transparent pricing practices. Take Airbnb, for example, which has recently made strides in showing the full cost upfront, shedding its previous reputation for surprise cleaning fees.
Traveling to see a live event should be exciting, not overshadowed by exorbitant fees at checkout. The controversy over event ticket fees reached a peak in 2022 when Ticketmaster faced backlash for overselling tickets to Taylor Swift’s Eras Tour, partly due to overwhelming fees.
With the new junk fees rule, companies will need to present any fees at the outset of the booking process. As with accommodations, fees like taxes and shipping can be left out of the advertised price but must be clarified before you finalize your payment.
Whether you’re headed across the country for a concert or catching a game closer to home, this change eliminates a major obstacle to clear pricing for event tickets. It simplifies event budgeting, ensuring you won’t spend more than expected.
So, what’s on the horizon? While the rule has been announced, it has yet to appear in the Federal Register, the government’s daily log of rules, executive orders, and other documents. Once published, it will take effect 120 days later, likely around April 2025.
The journey to the junk fees rule has been unfolding for some time. Back in 2022, the FTC sought public feedback on misleading pricing and received over 12,000 comments. A subsequent call for comments in October 2023 brought in 60,000 more.
While the new rule targets hotels, vacation rentals, and event ticketing platforms, the FTC has stated it will continue to employ its enforcement powers to tackle bait-and-switch pricing tactics, including drip pricing and deceptive fees, across other sectors through targeted enforcement actions.
