The U.S. Federal Trade Commission (FTC) announced on Monday that its new regulation banning hidden fees for live events, hotels, and short-term rentals will take effect starting May 12. Titled the “Rule on Unfair or Deceptive Fees,” the regulation specifically targets practices like “bait-and-switch pricing” and other methods that conceal or misrepresent the full price consumers pay.
In a detailed FAQ published alongside the announcement, the FTC outlined that the rule impacts various businesses including sellers of tickets for concerts, sports, and other live events, as well as providers of temporary accommodations, from hotels and motels to short-term rentals like Airbnb and VRBO. Third-party booking platforms, ticket resellers, and travel agencies are also explicitly covered by the regulation.
Under the new provisions, businesses must prominently disclose the total, comprehensive price upfront in all advertising and promotional material. The total price displayed must include all known mandatory fees and charges, clearly outlined and more prominently displayed than any other pricing information on the site. Businesses are expressly prohibited from misrepresenting fees or charges or using vague and unclear terminology such as “convenience fees,” “service fees,” or “processing fees.” However, dynamic pricing systems—where prices change according to market demand—remain permissible as long as the prices presented to consumers accurately reflect the final, all-inclusive costs.
The FTC provided additional clarity regarding fees that may legally be excluded from total price disclosures, including government-imposed fees, applicable taxes, shipping charges, or optional services and products selected by customers. However, even when these exclusions are permitted, businesses are required to clearly describe the excluded charges, including their amounts, before requesting payment.
This regulation first received formal approval in December 2024 as part of a major push by the FTC to address consumer frustration around misleading pricing practices. Anticipating the new regulation’s impact, Airbnb had already implemented usability changes to display total costs upfront.
The new rule is considered a significant win for consumer transparency and is expected to reshape pricing standards across industries reliant on online advertising and bookings.
