New FTC Rule Ends Hidden Hotel Fees Starting May 2025
New FTC Rule Ends Hidden Hotel Fees Starting May 2025
Beginning May 10, 2025, U.S. hotels and short-term rentals must display all mandatory charges, such as resort or cleaning fees, at the start of the booking process. The Federal Trade Commission (FTC) issued this rule to stop “drip pricing,” where extra fees appear only at checkout. The regulation was published in the Federal Register on January 10, 2025.
This follows similar laws adopted in California and Minnesota in 2024. For hotels, the change is an opportunity to increase transparency, improve guest trust, and compete more fairly with online travel agencies.
What Counts as a “Junk Fee”?
In this context, a junk fee is any mandatory charge not included in the upfront room rate. Common examples include resort fees for hotels and cleaning fees for short-term rentals.
If your property currently lists these fees separately on your website, in metasearch, or any direct booking channel, you will need to update pricing so the total cost appears immediately.
Note: Taxes and government-mandated charges are exempt and may remain itemized.
Why It Matters
- Build trust: Transparent pricing removes last-minute surprises.
- Level the field: Aligns with OTA display practices.
- Reduce friction: Fewer cart abandons at checkout.
As seen during California’s rollout, the transition can bring display and messaging challenges, but the long-term upside is meaningful.
How Hotels Can Prepare
- Review your booking engine: Confirm it can show total prices, including all mandatory fees, on initial search results.
- Communicate value: If a resort fee remains, state what it includes, such as spa access, welcome drinks, or in-room perks.
- Align channels: Sync pricing and fee logic with Google and metasearch to avoid mismatches or penalties.
- Update marketing: Ensure ads and promos reflect total prices so expectations match the checkout experience.
- Train teams: Brief reservations, revenue, and marketing on the rule to keep guest communications consistent and compliant.
Bottom Line
The FTC’s rule marks a shift toward clear, guest-friendly pricing. Acting early helps you stay compliant, protect trust, and convert more direct bookings.