By Dee-Ann Durbin, Associated Press
The Federal Trade Commission on Tuesday said it will soon require hotels, vacation rental platforms and live event promoters to disclose any fees up front when they list prices.
The FTC said consumers often see advertised prices for hotel rooms, short-term rentals and tickets to sporting events and concerts only to be surprised later by so-called “junk fees,” including resort fees, cleaning fees, processing fees and other extra charges.
“People deserve to know up front 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,” FTC Chair Lina Khan said in a statement.
The rule is scheduled to go into effect in 120 days.
Ticketmaster said Tuesday it supports the new rule.
“Ticketmaster has long advocated for all-in pricing as a nationwide industry standard, and we’re pleased to see the FTC mandate the necessary changes to make ticket-buying more transparent for fans,” the company said.
The Associated Press left a message seeking comment Tuesday with the American Hotel and Lodging Association.
Four of the FTC’s five commissioners voted to approve the rule. Commissioner Andrew Ferguson, — who is President-elect Donald Trump’s choice to replace Khan, was the one dissenting vote.
The rule requires lodging and ticketing businesses to clearly and conspicuously disclose the true cost — including all mandatory fees — when they display any pricing. Businesses that exclude taxes or shipping fees from advertised prices must also disclose them before customers enter any payment information.
The use of resort fees is common in Las Vegas, and industry players such as the American Hotel and Lodging Association and the American Gaming Association had sought to exempt the hotel industry from the final rule since it was proposed in 2023. The use of “drip pricing” — not disclosing the size of a resort fee until the final checkout page when booking a room online — varies across Strip properties. The rule bans this drip pricing approach, allowing companies to continue using them but mandating that they are disclosed upfront.
The rule is also meant to counteract the “prisoner’s dilemma” that creates a market incentive for companies to add fees or misrepresent them so long as competitors are doing so — an FTC case study cited Caesars Entertainment implementing resort fees in 2013 after years of marketing their lack of them compared to other Strip companies.
The FTC estimates the rule will save U.S. consumers 53 million hours per year of time spent searching for the true price of lodging or events.
The FTC launched the rule-making process in 2022, asking for public input on whether a fee-disclosure rule might help eliminate unfair and deceptive pricing. The agency said more than 12,000 people commented.
Junk fees and deceptive pricing are also one of the reasons the Department of Justice sued Ticketmaster and its parent company, Live Nation Entertainment, earlier this year. The government asked a court to separate the companies, saying they have a monopoly on concert promotion and ticketing that drives up prices for consumers.
The Biden administration also has targeted the fee practices of U.S. airlines, banks and online payment platforms.
The Nevada Independent contributed to this report.
