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What is the FTC Junk Fees Rule?
The 'Rule on Unfair or Deceptive Fees,' proposed by the U.S. Federal Trade Commission (FTC), is a regulation designed to eliminate hidden and misleading charges, commonly known as 'junk fees.' It mandates that businesses across various sectors, including the short-term rental industry, must show the total price as the most prominent figure in any listing or advertisement.
This all-in price must include all mandatory charges, with only government-imposed taxes being excluded.
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How it works
The rule requires the total price to be the most prominent figure shown to consumers. This means operators must bundle all unavoidable charges, like cleaning fees or service fees, into the initial price shown on listings and advertisements.
Optional add-ons can be listed separately. This approach is designed to prevent 'drip pricing,' where costs are added late in the booking process.
Property management systems and direct booking tools, such as the website builder by Lodgify, enable hosts to configure their pricing displays to show the full cost upfront and comply with such regulations.
Why it matters
This rule significantly impacts pricing transparency in the vacation rental market. It levels the playing field by forcing all operators and platforms to adopt an all-in pricing model, preventing properties with low base rates but high fees from appearing deceptively cheap.
For consumers, it simplifies comparison shopping and builds trust by eliminating unexpected costs at checkout.
Examples
- A host's direct booking site previously advertised a nightly rate of $250, adding a $150 cleaning fee at checkout. To comply with the rule, the initial price displayed must incorporate the cleaning fee, showing a total price or adjusted nightly rate reflecting the full cost.
- An OTA listing must show the total price in its search results, including all mandatory host fees like service or administrative charges for the selected dates, before applying government taxes.
- A property manager's email promotion for a '3-night stay for $600' must represent the total amount a guest will pay, excluding only optional add-ons like a pet fee or mid-stay cleaning.
- When a consumer searches for a week-long stay, the price shown must be the complete lodging cost. A separate resort fee or cleaning fee cannot be revealed for the first time on the final payment screen.
Frequently asked questions
Does the FTC Junk fees Rule apply to all vacation rentals in the U.S.?+
What is considered a 'junk fee' by the FTC?+
Are optional fees like pet fees or late check-out fees affected?+
How does this rule relate to total price display on OTAs?+
Related terms
Total Price Display
Total price display is the practice of showing travelers the full, all-inclusive price of a vacation rental stay—including base rates, cleaning fees, and…
Cleaning Fee
A one-time charge added to a guest's reservation total to cover the cost of cleaning the property after their stay.
Service Fee in the Vacation Rental Industry
A service fee is a charge levied by an online travel agency (OTA) or booking platform for the use of its services. These fees can be charged to the guest, the…
Amenity Fee
An amenity fee is a mandatory charge for guests, separate from the nightly rate, to cover the cost and maintenance of specific property amenities like pools…