Casino-Resort Fees Must Be Visible in Hotel Room Rates, FTC Rules

The way casino-resorts advertise hotel room prices is changing thanks to a recent decision by the federal government.

The Federal Trade Commission (FTC) on Tuesday voted in a show of bipartisan agreement to ban resorts from “hiding” the true cost of hotel rooms. In what is known as “bait-and-switch” pricing, rooms are advertised at decreased prices, and resort fees are added to that baseline price when the customer advances to checkout.

The FTC’s new standard, known as the “Junk Fees Rule,” will outlaw these tactics and increase initial transparency of room rates.

Changing the way prices are displayed

Resort fees popped up in the 1970s when resorts added extra costs for common amenities such as fitness centers, newspapers, phone calls, and more.

Fast forward to 2024, and these fees are significantly greater than they used to be. They also trick customers into thinking they are getting a much better deal than they actually are once all of the fees are added to the baseline room price.

“People deserve to know up-front what they’re being asked to pay without worrying that they’ll later be saddled with mysterious fees that they haven’t budgeted for and can’t avoid,” said FTC Chair Lina Khan. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time.“I urge enforcers to continue cracking down on these unlawful fees and encourage state and federal policymakers to build on this success with legislation that bans unfair and deceptive junk fees across the economy.”

The new standard will also reshape the standards for the live-event industry, including music concerts, NFL games, comedy shows, and more.

Making multiple efforts

Prior to the ruling, hotels were alleged to purposefully bury inflated fees to deceive customers and get their foot in the door with lower prices before later springing the full cost. The change in standard does not prohibit resort or junk fees, but says they must be displayed in the upfront cost.

The FTC granted hotels 120 days to change their presentation of room costs to include necessary add-on costs upfront. This follows two years of debate and public input.

The FTC is an independent agency of the U.S. federal government and typically deals with matters of consumer protection and antitrust law. 

The topic of ticket and room prices has also been prevalent as of late. President Joe Biden long sought to bring more clarity to prices and junk fees, while former President and President-Elect Donald Trump said he would fight to lower costs for game-attending sports fans.

Hotels in Atlantic City were also accused of price-gouging in a class-action lawsuit, though that was dismissed by a judge in October.