Key takeaways

• New FTC requirements demand that mandatory fees for travel and event bookings be shown up front.
• Platforms that offer hotel rooms, short-term rentals, and concert tickets must disclose total prices before the checkout process.
• The ruling aims to reduce cart abandonment while helping buyers compare real costs.

A new FTC rule bans hidden fees in travel and ticketing, requiring that total prices be shown up front to help buyers avoid surprise costs at checkout.

Transparent pricing is here for millions of travelers and eventgoers. A Federal Trade Commission (FTC) rule that went into effect in May requires mandatory fees to be included in the initial price shown on hotel, rental, and ticketing websites.¹

The rule targets a common pricing tactic known as “drip pricing.” This is when companies tout a low base but have required fees later in the booking or checkout process. The FTC’s new standards require those fees to appear upfront, instead of near the end of checkout. They also have to be advertised as part of the total price consumers pay.

Pricing, made clearer

Businesses covered by the FTC’s new “Rule on Unfair or Deceptive Fees” legislation have to show the total price buyers pay before committing to a purchase.² This includes hotel chains, short-term rental options (like Airbnb and Vrbo), and ticketing services for live events (like Ticketmaster and AXS).³ This only applies to mandatory fees, such as convenience fees and clean-up fees. Fees for add-on services (e.g., valet parking, event insurance) can still be added at the end, as they’re not required in order to make the baseline purchase. These additional services have to be clearly labeled, however, and can’t be preselected.

The FTC’s goal with these new rules isn’t to change pricing; rather, it’s to make it easier for consumers to know what they are paying — and what they’re paying for — before getting to the end of the transaction. 

Read more: Summer glam, now bundled: How travel platforms are going full-service

How add-on fees add up

Hidden fees may not always seem dramatic on paper, but their cumulative effects can add up quickly. The FTC estimates that these pricing tactics cost Americans billions of dollars per year, and may take up 50 million hours of consumers’ time hunting for the real costs of their purchases. Cart abandonment can be a side effect for companies too: A recent report found that extra costs are a leading reason for consumers to drop out of the checkout process.⁴

Showing total prices up front may help cut through this friction. It makes vacation budgeting easier for buyers, can improve comparison shopping, and may lead to a smoother checkout process.

• What’s covered by the FTC’s “Junk Fee” rule
• The FTC’s ruling covers almost every sector that it regulates, including:
• Hotels, motels, and resorts
• Online travel agencies and travel booking sites
• Short-term lodging and home rental sites
• Ticketing platforms
• E-commerce platforms
• Subscription services
• Gyms and fitness centers
• Services that use recurring billing

Enforcement is targeted particularly at hotels, home rental sites, and event ticketing. These industries are receiving more focus due to the volume of customer complaints and their potential for confusing or unclear pricing tactics. Any business under the FTC’s jurisdiction now has to disclose all mandatory fees in the initial price, state whether a charge is optional or required, and whether any fees may be charged by a third party (like payment processors, for example). Companies that do not comply risk civil penalties, injunctions, and mandatory refunds.

Some industries are not covered by this ruling, however. For example, airlines and car rental agencies are outside the FTC’s jurisdiction since they are regulated by the Department of Transportation (DOT).⁵ Thus, they are subject to that agency’s rules instead.

Read more: Money meets lifestyle: Consumers spend $2.1 trillion on experiences

The financial impact

Many people are open to spending on major experiences, and expect to get more enjoyment out of them in return. Some 88% of people say that experiences can increase their overall life enjoyment, and 38% say buying concert tickets is a luxury that’s worth the cost. Live Nation plans to invest $1 billion to build 18 new music venues to keep up with demand. The company reports an overall increase in concert attendance of 4% in 2024.⁶ Additionally, 151 million people attended Live Nation events last year — a 9% increase. 

Dare to compare

The new rule could shake up how the industry tackles pricing.⁷ A $100 concert seat that becomes $145 with fees will now have to list the all-in cost up front. This could open the door for other vendors to compete on a level playing field, or may even persuade industry incumbents to alter the business model.⁸ Industry experts say the new ruling may cause vendors to reassess ticket markups.⁹

In the travel world, having two rental listings show their true total cost may provide buyers with a better sense of not only what they’d pay, but also how other factors play a role in their decision-making. This can include location, amenities, value, or even unique experiences associated with their stay. The math involved in tallying fees by the end of the transaction goes by the wayside, which may help would-be buyers do better comparison shopping.

There are limits on what the legislation covers. Some platforms that use dynamic pricing, which causes prices to shift depending on demand, will still be able to do so. This is true even if fees are disclosed up front.

Read more: Road trips race ahead in popularity as people stretch travel dollars

Bon voyage, junk fees

Buyers could still see uneven adoption of the new rule this summer, particularly with small businesses. The FTC has published detailed guidance for businesses on how to remain within the bounds of the new rule, and how they plan to enforce it as needed. But for now, shoppers who are booking hotels, rentals, or tickets may begin to see total prices up front soon. That could come as good news as summer travel heats up and concert season hits mid-stride.