Duff on Hospitality Law

Good Sunday morning from Seattle and happy holidays . . . Well, we definitely missed this one. Last week I wrongly predicted that we would see little near term progress on national junk fee regulation. With leadership at the FTC poised to change with the upcoming presidential transition, many thought that the FTC’s ongoing efforts (and draft rule) were likely to be delayed or even killed. Outgoing leadership at the FTC apparently thought differently.

On Tuesday (December 17), the FTC announced its final junk fees rule. The final rule is much narrower than the proposed rule that was issued in October 2023 (and garnered 60,000 comments) and focuses exclusively on live-event ticketing and short-term lodging (i.e., hotels and short-term rentals). A few key highlights to consider:

• • The rule does not prohibit resort or amenities fees (or any similar pricing model). Hotels may still impose the mandatory charges.
  • The rule requires that the total price (rate plus other mandatory fees, excluding taxes) be clearly and conspicuously displayed whenever pricing is displayed or advertised. The total price must also be more prominently displayed than other pricing information.
  • The new rule applies both to hoteliers and other third-party distribution platforms.
  • The rule goes into effect 120 days after being added to the Federal Register (date uncertain) and could be invalidated by an act of Congress under the Congressional Review Act. The fact that the rule does not even go into effect until months into the Trump administration caused one FTC commissioner to dissent to the proposed rule – not on substantive grounds, but on procedural.

We’ve included below two of the many stories published this past week about the new final regulation. We’ve also attached copies of the many materials released by the FTC when the final rule was announced, including the full text of the rule and its background details.

If you have questions about the new rule or how it might affect your operations, please let us know. We are working with several clients on the implications of the final rule.

Have a wonderful holiday everyone.