The Federal Trade Commission (FTC) announced a new rule on Tuesday that will make pricing more transparent for consumers booking hotels, event tickets, and vacation rentals. The regulation requires businesses to display total prices including all fees upfront, rather than revealing additional charges at checkout.
Under the new rule, companies must incorporate service fees, resort fees, and other common add-on charges in their advertised prices. This change aims to eliminate the practice of "drip pricing," where businesses gradually reveal extra costs during the booking process.
"We all know the experience of encountering a hidden fee at the very last stage of checkout," said President Joe Biden, who has made eliminating these "junk fees" a priority of his administration. "These fees sneak onto your bill and companies end up making you pay more because they can."
The FTC estimates this change will save Americans 53 million hours annually that they currently spend trying to determine total costs before making purchases. The rule represents a focused version of the broader proposal introduced in 2023, which would have banned hidden fees across all industries.
FTC Chair Lina Khan expressed support for additional measures, encouraging state and federal policymakers to expand protections against unfair fees throughout the economy.
However, the rule faces potential challenges. The incoming administration could seek to review it, and Republicans in Congress might attempt to overturn it through legislation. Similar consumer protection efforts have already met resistance - courts have temporarily blocked rules regarding credit card late fees and airline baggage fee disclosures.
Despite these obstacles, the rule marks a concrete step toward greater pricing transparency in the travel and entertainment sectors, potentially saving consumers both time and money when making reservations.