New FTC Rule Demands Hotels Disclose Hidden Fees to Travelers

New FTC Regulation Aims to Increase Price Transparency for Travelers

The Federal Trade Commission has introduced a significant new rule designed to safeguard travelers from unexpected add-on fees that can inflate lodging costs. This regulation specifically addresses what are referred to as “Unfair or Deceptive Fees.”

Often, these fees emerge in the context of short-term lodging services, including hotels, motels, and vacation rentals. They may manifest as “resort” or “destination” fees, which are levied on guests wishing to utilize hotel amenities such as swimming pools or fitness centers.

The Impact of Hidden Fees on Travelers

Short-term lodging encompasses various types of accommodations, including traditional hotels and platforms like Airbnb. Approximately 6% of hotels implement resort fees, based on data from the American Hotel and Lodging Association. These unexpected charges can catch travelers off guard, leading to a less than transparent booking experience.

The newly established rule explicitly prohibits misleading pricing strategies, including those that obscure the total price of a stay. According to the FTC’s recent press release, the policy aims to combat tactics that can mislead consumers about the true cost of lodging and live event tickets.

Exclusions to the New Rule

It is important to note that taxes and other government-imposed fees are not covered by this new regulation. For instance, municipalities may still charge hotel occupancy taxes, which will remain unaffected.

Transparency in Pricing

To enhance transparency, short-term lodging providers and live event organizers must disclose comprehensive pricing information in their advertisements. The total cost must be presented upfront, encompassing all known charges or fees that could affect the price.

The FTC’s guidance emphasizes that this total price should include any mandatory services or goods that are required as part of the transaction. Such clarity is expected to empower consumers, allowing them to make informed decisions when booking accommodations.

Industry Response to the Regulation

A spokesperson from Marriott noted that the hotel chain became a pioneer in delivering transparent pricing as of May 2023. Marriott claims it is the first hospitality company to guarantee that non-government fees are included in the total displayed price for customers.

The spokesperson mentioned that this approach has been in practice for two years, meaning that guests are unlikely to notice any changes in how prices appear when they book their rooms.

The American Hotel & Lodging Association has also commented on the new requirement. Rosanna Maietta, the group’s president and CEO, stated that the organization has taken an active role in advocating for a consistent federal standard for pricing clarity. This viewpoint aligns with their commitment to ensuring travelers receive transparent pricing, regardless of their booking platform.

Strategies for Travelers to Avoid Hidden Fees

Despite these new rules, travelers still have options to steer clear of resort fees. For example, utilizing hotel points for bookings is a potential strategy. However, some properties may still impose these fees, necessitating cash payment in addition to points.

Furthermore, individuals with elite status at certain hotel chains may find themselves exempt from specific resort fees. This privilege can significantly enhance the value of loyalty programs, providing members with added benefits during their stays.

Travel experts from sources like Nerdwallet suggest that utilizing hotel loyalty points may offer a practical way to bypass these additional charges. By effectively navigating the booking landscape, travelers can maximize their savings and minimize unnecessary expenses.

Final Thoughts on the New FTC Rule

The FTC’s decision to regulate hidden fees in the lodging industry marks a pivotal shift toward greater consumer protection and clarity. By mandating upfront pricing, the agency aims to foster an environment where travelers can book accommodations with confidence, free from the stress of surprise fees.

This regulation could fundamentally reshape the expectations of travelers everywhere, pushing hotels and short-term rentals to prioritize transparency as a core aspect of their business practices. With this newfound clarity, consumers are better equipped to make informed decisions as they plan their travels.