Anyone who shopped online for hotel rooms, vacation rentals, or plane tickets has had the experience of finding a reasonable prepaid price to find a Sky Rocket at checkout due to a private fee.
Common perpetrators include scary resort fees, vacation rental cleaning fees, and some airlines have the cost of choosing a seat. Such annoying costs that creep up at the end of a transaction are widely known as junk fees, complicating the process of creating price comparisons for apples and applications.
Federal Trade Commission rules came into effect this month, preventing hotels, vacation rentals and ticket services from obfuscating additional costs for ticket services for live entertainment events. These types of businesses must show up a prepaid price including all fees and are not permitted to tack at the end.
This victory for consumers will fundamentally change the way you book online for travel and entertainment. The FTC estimates that Americans are wasting 53 million hours a year by comparing prices for live event tickets and short-term accommodation. Now you can do a quick web search, get price comparisons across multiple vendors, and choose the option that suits your budget.
But – and I'm sorry I'm buzzkilled – this is where the good news ends.
There are still hidden fees hiding in other areas, including airfares, car rental bookings, and movie tickets. In other words, online booking experience has improved in some categories, although not all.
“People feel like they're really killing nickel and diming,” said Chuck Bell, director of Consumer Reports.
Here's what you need to know.
Hunting tickets for hotels and events is much easier
Due to the new FTC rules, sites that aggregate hotel booking information such as Hotels.com and Expedia show total room rates including taxes and all charges.
For example, Hotels.com quoted $825 for a two-night stay at a hotel in midtown Manhattan. After clicking, the checkout page showed a breakdown that included $60 resort fees and taxes.
Similarly, if you are browsing a vacation home on Airbnb, you will see the total price, including the service fees you pay for the site and the cleaning fees your host charges. Sites that sell tickets to live events, including Ticketmaster and StubHub, will display the total cost, including service charges.
The fee itself hasn't disappeared, but the true cost is now transparent. This makes it easier to stick to your budget when shopping.
Brian Kelly, founder of The Points Guy, a blog that follows Travel Deals, advises travelers to compare prices using third-party hotel aggregators such as Expedia to book directly with the hotel. He added that if something goes wrong with hotel booking, hotel support staff can solve the problem more efficiently than aggregators who are essentially intermediaries.
In a statement, the FTC said it focused on two industries with a history of deceptive pricing.
“Consumers were unhappy with event tickets and hotel stays shopping, but when they go to pay, they get hit by expensive and mysterious fees,” according to the agency's statement. “Consumers will now have the whole truth.”
However, hidden fees remain elsewhere
Online bookings become more complicated in other categories, such as airplane tickets.
A search on the Alaska Airlines website showed a flight from New York to San Francisco in June for $320. Only after clicking will you add $200 when you select your seat, which will total $520.
Airlines were not included in the FTC junk rate rules. Because they are under the jurisdiction of the Department of Transport, the agency is making similar pushes for greater price transparency. Last month, the department announced rules requiring airlines to pay upfront fees for checked luggage and seat selection. The airline sued the department this month, claiming the rules would disrupt consumers by providing too much information. As a result, the rules have not yet been implemented.
“This is an industry that lives on sticker shocks,” said William McGee, an aviation expert at the American Economic Liberties Project, a nonprofit that fights corporate monopoly. “The gotcha never stops.”
He added that consumers need to continue working diligently to understand the true prices of plane tickets.
One useful technique for streamlining your research process is to become familiar with the type of fees your business normally adds at checkout. For example, budget airlines typically charge to an additional fee. If you're using airfare comparison tools like Google Flights, you can filter out budget airlines from your search and search for tickets only from brands with a simpler pricing structure.
Junk fees are still hidden by many of our online transactions. The total cost of movie tickets, including the so-called convenience fees for booking online, is often not displayed until you choose a showtime and seat. Some car rental companies will add an additional airport operating fee, among other fees.
Simply put, beware.
In the long term, transparency could push prices down
The new rules sound like a small victory, but consumers may have much more changes to their look forward to, Bell said. As hotels and live event services have to be more clear about pricing, they may face competitive pressure to lower their rates.
“It's nice to see some of the fees being cut or eliminated,” he added.
