The Federal Trade Commission (FTC) has finalized a rule banning hotels, vacation rentals and other short-term lodging providers from hiding mandatory fees.
The final Junk Fees Rule, which applies to event ticket sales as well as lodging, requires businesses to display the total price, including all required fees, upfront in their advertisements and listings.
The move aims to eliminate bait-and-switch pricing tactics, with the FTC specifically calling out mandatory charges that have been labeled as resort, convenience or service fees.
"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," said FTC chair Lina Khan.
The FTC approved the rule in a 4-1 vote, with the measure slated to take effect 120 days after its publication in the Federal Register.
The regulation follows an extensive public comment period that began in 2022, during which the FTC said it received more than 72,000 responses about hidden and misleading fees. The FTC proposed its rule banning junk fees in October 2023.
The FTC estimates the rule will save consumers up to 53 million hours annually in wasted time spent searching for total prices as well as save them more than $11 billion over the next decade.
The American Hotel & Lodging Association has said it supports the federal government's crackdown on junk fees so long as rules are evenly applied across the lodging sector, including short-term rentals and OTAs.