The FTC junk fee rule: what it means for hotels and AI agents
USUpdated By Akkrev
Since May 12, 2025, US hotels must show the total price, including mandatory fees, up front. AI agents compare those totals, so hidden fees lose bookings.
Since May 12, 2025, the Federal Trade Commission’s Rule on Unfair or Deceptive Fees has required hotels, motels and short-term rentals to show the total price, including all mandatory fees, whenever they show a price. AI agents shopping for a guest compare those totals. A hotel that still adds fees late now risks the regulator and the booking.
What the rule requires
For short-term lodging:
- Show the total price, including all mandatory charges, up front in ads and offers.
- Display the total more prominently than other pricing information.
- Describe fees truthfully, and avoid vague labels such as “service fee” or “convenience fee”.
- Taxes and government fees can be excluded from the total, but must be disclosed, with amount and purpose, before the guest is asked to pay.
- Dynamic pricing is still allowed if it isn’t misleading.
Why AI agents raise the stakes
A guest asks: “Find a hotel in Nashville for Friday and Saturday under $500 total.” The agent needs a real total to compare. If your site shows a nightly rate and adds a $35 “destination fee” at checkout:
- A careless agent includes you on a wrong price, and the guest balks at payment.
- A careful agent finds the fee and books the competitor with a clear total.
Agents also compare your total with OTA listings for the same hotel. If an OTA shows the fee-inclusive price and your own site shows a lower headline that grows later, the agent may trust the OTA.
Fees that count as mandatory
Resort, destination, amenity and facility fees, mandatory cleaning fees on rentals, and any other fee every guest must pay. Optional extras, such as valet parking a guest chooses, can be added separately.
Taxes versus fees
The rule treats taxes and fees differently, and agents need to know which is which:
- Mandatory fees such as resort, destination, amenity, facility and cleaning fees must be in the advertised total.
- Taxes and government charges can be shown separately, with amount and purpose disclosed before payment.
A hotel that labels a fee as a “tax” or bundles fees into a vague “taxes and fees” line makes life harder for agents comparing totals, and may raise questions under the rule’s requirement to describe fees truthfully.
OTAs adapted quickly
Large OTAs reworked their displays when the rule took effect. Independent hotels using smaller booking engines didn’t always get the same update, or turned it on later. That gap is exactly what agents notice when they compare a hotel’s own site with its OTA listings.
What this means for AI recommendations
Total-price rules make price comparison fairer, and AI compares prices. Hotels that show full totals up front give AI an accurate number to quote when it compares you with other hotels.
How to check
Book your own property as a guest and note the first price you see and the final price before payment, excluding taxes. If they differ, an agent sees the gap. Our free agent check records the step where the price changed. This article is general information, not legal advice.
Questions
When did the FTC fees rule take effect?
May 12, 2025. It covers live-event tickets and short-term lodging, including hotels, motels and vacation rentals.
Do hotel prices have to include taxes?
No. Taxes and government charges can be excluded from the advertised total, but their amount and purpose must be disclosed before the guest is asked to pay.
Does the rule ban resort fees?
No. It requires mandatory fees like resort fees to be included in the total price shown up front, displayed more prominently than other pricing information.
Does the FTC rule apply to vacation rentals?
Yes. It covers short-term lodging, including hotels, motels, inns and short-term rentals such as those on Airbnb and Vrbo.