A new Federal Trade Commission rule requiring transparent prices for hotels, online booking sites, and short-term rentals takes effect May 12, and Congress is moving to make portions of the rule permanent.
The House passed the Hotel Fees Transparency Act On April 28th and the Senate companion Bill (S. 314( ) was approved by the Senate Commerce Committee on February. The FTC would also require that online bookers, hotels and other businesses include upfront a total price which includes all charges and fees for mandatory products or services. Taxes are not included.
Airbnb has already started complying with the legislation and FTC final rule. announced in late April that it was showing the total price without taxes worldwide on the first view – no need to toggle to see the all-in cost including fees.
In a statement following the House bill’s passage, Senator Amy Klobuchar (D. Minn.) stated that “our bipartisan bill” would lower hotel room and short-term rental costs by increasing transparency.
Trade groups representing the hotel and online booking industries say that this legislation sets a standard for all states, as they pass laws varying in their transparency of pricing. California and Minnesota are the only two states that have passed laws requiring hotel pricing transparency.
Laura Chadwick is the president and CEO of Travel Technology Association. She represents online travel websites like Booking.com, Expedia.com, and other similar sites.
Chadwick says that transparency breeds competition. “We have long believed it should be part of the price.
Although the FTC does not ban the charging of fees, the rule requires certain disclosures as well as prohibits misrepresentations in order to prevent unfair and deceptive pricing. It is not only directed towards online booking, hotel, short-term rental and online companies but also toward live-ticketing sites like LiveNation, Ticketmaster and LiveNation.
The Biden Administration began the rulemaking process in 2023. FTC Chair, Lina Khan. Last week, it was finally finalized. December in a 4-1 voteAndrew Ferguson, current FTC Chairman, did not vote against the proposal on merit but rather on the basis that he was opposed to the Biden Administration moving forward with its rulemaking after the term ended.
FTC rules set the standard that states must follow. However, states may pass stronger laws to increase transparency. The federal bill would establish a national standard which preempts state laws with conflicting disclosure requirements for hotel fees or short-term rentals.
The American Hotel and Lodging Association (AHLA), which represents over 32,000 properties, supports the FTC rule and legislation. Matt Carrier, AHLA senior vice-president of federal affairs policy and research said that while many of the hotel members of AHLA have been using all-in prices for years, they still support both federal legislation and the FTC rule.
Carrier explained that, “Even if the FTC rule shifts the industry to a fee-inclusive pricing model, the law will lock it in for both businesses and consumers on the definition of total price”, he said.
Chadwick expressed “hope” that the Senate will act soon. The spokesperson for Senate Majority leader declined to comment regarding the timing of any Senate floor votes.
Rebecca Kern, a Washington, DC-based freelance journalist, has previously written about energy and tech policy for Politico and Bloomberg Government. She worked briefly in communications at the Federal Trade Commission where she wrote about privacy and data protection actions.
