So-called “junk fees,” which are quietly added right before completing online purchases, will now also disappear from hotel bookings and event ticket sales.
The Federal Trade Commission (FTC) announced on the 17th that it has passed new regulations requiring ticket sellers, hotels, and short-term rental platforms like Airbnb to disclose total prices upfront. This new rule aims to prohibit businesses from hiding additional fees until the final payment stage.
This measure is a key part of President Joe Biden’s campaign to eliminate “junk fees,” which seeks to address the issue of opaque fees that increase financial burdens on consumers.
In a statement, President Biden explained the rationale behind the move, saying, “These junk fees are like directly taking money out of Americans’ pockets.”
Under the new regulations, fees commonly added during the booking process, such as service fees, resort fees, and amenity fees, must be included in the initially displayed price.
FTC Chair Lina Khan emphasized, “We hope this rule sets the stage for broader legislation to ban unfair and deceptive fees across the economy.”
The FTC estimates that the new rules will save consumers approximately 53 million hours annually—time previously spent trying to understand total costs before making payments.
However, the elimination of hotel junk fees may lead to overall price and wage increases in the hospitality industry. Major hotel chains that rely heavily on such fees are expected to bear greater financial burdens.
Jason Kim, General Manager of the Oxford Hotel in LA’s Koreatown, stated, “Major hotel chains may shift the additional costs previously charged as fees into regular booking rates, potentially driving an industry-wide price increase.”
In contrast, the impact on LA’s Korean American hotel sector is expected to be minimal, as these smaller hotels typically only charge mandatory taxes at checkout rather than extra service fees.
Yongim Kim, CEO of New Seoul Hotel, remarked, “We don’t charge additional service fees other than taxes, so smaller Korean-owned hotels are unlikely to be directly affected for now.”
While the Biden administration is cracking down on inflated and hidden fees, it has faced lawsuits from businesses and lobbying groups.
A Texas court blocked regulations capping credit card late fees, and a New Orleans appellate court previously halted mandatory upfront disclosure of additional airline charges like baggage fees. These legal challenges are ongoing.
Meanwhile, the new regulations could be rescinded if President-elect Donald Trump withdraws them for further review upon taking office. A Republican-controlled Congress could also nullify the rules through legislation.
BY HOONSIK WOO [woo.hoonsik@koreadaily.com]
