FTC Kills Hidden Fees in Tickets and Hotel Pricing

Will this stick under Trump?

By Uprise RI Staff

The Federal Trade Commission (FTC) just announced a landmark final rule aimed at combating hidden junk fees and deceptive pricing practices in the live-event ticketing and short-term lodging industries. The rule, which takes effect 120 days after publication in the Federal Register, requires businesses to show customers the total price upfront and prohibits them from surprising consumers with hidden mandatory fees later in the purchasing process.

Key Provisions of the New Rule

The rule targets two specific industries where hidden fees have been particularly problematic:

1. Live-event ticketing (concerts, sports events, theater performances)
2. Short-term lodging (hotels, motels, vacation rentals, etc.)

Under the new regulations, businesses must:

• Display the total price, including all mandatory fees, whenever they advertise or show a price
• Show the total price more prominently than other pricing information
• Clearly disclose the nature, purpose, and amount of any excluded fees before customers agree to pay
• Not misrepresent any fees or charges, including their nature, purpose, amount, or refundability

“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,” said FTC Chair Lina M. Khan.

Impact on Consumers

The FTC estimates that the rule will save consumers significant time and money:

• Up to 53 million hours per year of wasted time searching for true total prices
• More than $11 billion in time savings over the next decade
• Reduced frustration and stress from surprise fees
• Easier comparison shopping across different providers

For example, when booking concert tickets, consumers will now see the total price including all mandatory service fees, facility charges, and processing fees upfront—rather than discovering these additions only at checkout. Similarly, hotel customers will see room rates that include any mandatory resort fees or amenity charges from the start of their search.

Industry Response and Implementation

The rule has received mixed reactions from affected industries. Some businesses, like TickPick, already provide all-in pricing and supported the regulation. StubHub noted that it previously attempted to implement all-in pricing in 2014 but had to revert due to competitive disadvantages when other companies continued using drip pricing.

The American Hotel & Lodging Association expressed support for implementing clear total price requirements, though they emphasized the importance of applying the rules consistently across all industry participants, including online travel agencies and metasearch sites.

Exemptions and Flexibility

The rule provides some flexibility for businesses by allowing them to exclude certain charges from the upfront total price:

• Government-imposed taxes and fees
• Shipping charges
• Optional add-on services or amenities
• Credit card processing fees (if cash or other payment options are available)

Important Distinctions

The FTC clarified several key points about the rule’s application:

1. Businesses can still charge fees—they just need to include mandatory ones in the displayed total price
2. Optional add-ons can still be offered separately
3. Businesses can still itemize fee breakdowns as long as the total price is most prominent
4. Dynamic pricing remains permitted as long as the displayed price includes all mandatory fees

Economic Impact

The FTC’s analysis suggests significant net benefits from the rule:

For live-event ticketing:

• Benefits to consumers: $184.7 million to $2.46 billion (7% discount rate over 10 years)
• Costs for businesses: $15.1 million to $142.2 million
• Net benefit: $42.5 million to $2.45 billion

For short-term lodging:

• Benefits to consumers: $4.93 billion to $7.17 billion
• Costs for businesses: $153.3 million to $460.6 million
• Net benefit: $4.47 billion to $7.02 billion

Enforcement and Penalties

The rule gives the FTC stronger enforcement tools, including:

• Ability to seek civil penalties for violations
• More efficient path to obtain consumer redress through federal court
• Authority to require monetary relief for consumers harmed by violations

Timeline and Compliance

Businesses have 120 days from the rule’s publication in the Federal Register to come into compliance. The FTC plans to provide guidance to help businesses understand their obligations, including a small business compliance guide.

Looking Ahead

While the current rule focuses on live events and lodging, the FTC noted that similar deceptive pricing practices exist across many industries. The commission indicated it may address these practices in other sectors through future rulemaking or enforcement actions under existing authority.

The rule represents a significant shift in how certain businesses must present prices to consumers. Its effectiveness will depend largely on consistent enforcement and business compliance. Consumers should begin seeing more transparent pricing in these industries by mid-2025, making it easier to understand true costs and make informed purchasing decisions.

For businesses affected by the rule, the key takeaway is clear: mandatory fees must be included in advertised prices, and any additional charges must be clearly disclosed before purchase. The era of surprising consumers with unavoidable fees at checkout is coming to an end, at least in these two industries.