**FTC Cracks Down on Hidden Fees: What Travelers Need to Know**
Travelers can soon breathe a sigh of relief as hidden fees that inflate the cost of accommodations may soon be a thing of the past. The U.S. Federal Trade Commission (FTC) has finalized the *Junk Fees Rule*, a new regulation aimed at banning deceptive pricing practices across industries, including hotels and short-term rentals. This rule will require businesses to display the total cost of services upfront, ensuring transparency for consumers.
### **What Is the Junk Fees Rule?**
Announced on Tuesday, the FTC’s *Junk Fees Rule* prohibits businesses from hiding mandatory fees when advertising prices. While companies can still charge these fees, they must clearly disclose the full cost, including all mandatory charges, at the time of booking or advertising.
“People deserve to know upfront what they’re being asked to pay—without worrying about unexpected fees that disrupt their budgets,” said FTC Chair Lina M. Khan. “This rule will save Americans billions of dollars and countless hours wasted on deciphering hidden costs.”
The FTC estimates the new rule could save consumers up to $11 billion over the next decade and reduce the time spent navigating unclear pricing by 53 million hours annually.
### **Why Was This Rule Introduced?**
Hidden fees have long been a frustration for travelers. A 2023 analysis by NerdWallet revealed that resort fees at hotels averaged $38.82 per night, accounting for 3.9% of the nightly rate. In some cases, these fees made up over 30% of the total cost.
Hotels often use these fees to artificially lower their advertised rates, making them appear more competitive during online searches. “Online travel shopping is very rate-driven, so properties feel pressured to follow this practice,” explained David Sherwyn, a hospitality law professor at Cornell University.
The Biden Administration began addressing these so-called “junk fees” in 2022, with President Joe Biden noting that such practices disproportionately affect marginalized communities.
### **What Does This Mean for Travelers?**
Under the new rule, hotels and short-term rentals must prominently display the total price, inclusive of all mandatory fees, whenever they advertise or offer a price. Additionally, businesses must disclose the purpose and amount of each fee before consumers agree to pay. For example, charges like resort fees or Wi-Fi fees must be clearly identified.
The rule also requires that the total price be more prominent than any breakdown of fees, ensuring consumers aren’t misled by lower advertised rates.
### **Industry Reactions and Challenges**
While the rule has been praised for its consumer protections, it raises questions about how businesses will adjust. Sherwyn predicts that hotels may find alternative ways to recover the revenue previously generated by hidden fees. For instance, they might increase room rates or charge additional fees for extra guests. “Will single travelers end up subsidizing rooms with multiple occupants? Will people start lying about the number of guests?” he speculated.
Despite these concerns, some industry leaders support the move. The American Hotel & Lodging Association (AHLA) commended the rule for creating a consistent national standard. “Consumers deserve transparency no matter where or how they book their stays,” said AHLA President & CEO Rosanna Maietta.
### **What’s Next?**
The *Junk Fees Rule* will undergo a period of public comment and potential legal challenges before it takes effect. Once implemented, it promises to make travel planning more straightforward and cost-effective for millions of Americans.
For travelers, this marks a significant step toward worry-free vacations, free from the surprise of hidden fees. In the meantime, consider protecting your trips with the [best travel insurance policies](https://www.usatoday.com/money/blueprint/travel-insurance/best-travel-insurance/).
Source: usatoday.com