Mandatory Fee Disclosure Rules for Hotels

The FTC's Rule on Unfair or Deceptive Fees took effect on 12 May 2025. It covers businesses that offer, display or advertise short-term lodging, including hotels and third-party platforms. When a price is displayed, the total price must include fees a guest is required to pay, cannot reasonably avoid, or must buy to make the lodging fit its expected purpose. The total price must be more prominent than other pricing information. If the final amount of payment is displayed, that amount may be as prominent as or more prominent than the total price. The rule does not set the amount a hotel may charge; it governs how covered businesses communicate price.

The federal rule treats government charges differently from property fees. A tax may be left out of the first total, but the business must disclose excluded charges clearly before the guest consents to pay and must show the final payable total before requesting payment. The FTC's FAQ is staff guidance, while 16 CFR Part 464 is the binding rule. Read both when mapping the rule to a real booking journey.

California requires a second check. SB 478 generally makes businesses include mandatory charges in consumer prices, with government-imposed transaction taxes and fees excluded from that advertised price. AB 537, effective 1 July 2024, is specific to short-term lodging: the advertised room rate must include every fee required to stay, and the total shown before reservation must include taxes and government fees on the stay. That hotel-specific tax step is the key difference to preserve in a California workflow.

Under 16 CFR Part 464, a fee belongs in the displayed total if the guest must pay it, cannot reasonably avoid it, or must buy the associated good or service for the lodging to serve its intended purpose. The FTC also treats charges as mandatory when default billing or an opt-out design prevents meaningful consent. A department's label does not decide the result: test the real choices and terms a guest encounters.

The FTC's examples distinguish an automatically charged resort fee from a genuinely optional add-on. If the guest is charged a resort fee by default and must notice and challenge it to avoid payment, it is still mandatory. A separately selected trip-protection option may be excluded from the initial total; after the guest selects it, include it in the final amount before asking for payment.

A fee for later conduct, such as smoking in a non-smoking room or damage, is different because it arises after purchase or may not be part of the same transaction. A government charge is also treated separately under the federal rule. Apply those categories to the specific fee and booking flow, and check the current rule and FTC FAQ when the facts are not clear.

• ✓Does the guest have to pay the charge, or is it difficult to avoid in practice?
• ✓Is the charge automatically applied, preselected, or removable only if a guest objects?
• ✓Is the service genuinely optional, or needed to make the stay usable as expected?
• ✓Is it imposed by government or triggered only by conduct after purchase?

The federal rule applies to businesses that offer, display or advertise a price for covered short-term lodging. That can include a hotel's own site as well as another business that displays the lodging price. The relevant question is what each business shows at the price display it controls, not which system owns the fee internally.

Show the total price more prominently than other pricing information. Before asking the guest to pay, clearly disclose the nature, purpose and amount of any government charge excluded from that total, then display the final amount of payment. The final amount may be as prominent as or more prominent than the total price. Add selected optional services to that final amount, and do not leave a mandatory charge hidden until the last step.

For a hotel team, this is a legal review of each covered offer and booking path. A cross-channel content audit answers a different question: whether public fee facts match the hotel's approved record. Keep the legal result tied to its market, seller, offer and booking flow rather than treating an OTA-to-OTA wording difference as the legal test.

The most common shortcut is to remember only that government taxes are excluded from an advertised price. That is a useful summary of California's general SB 478 rule, but it is incomplete for a hotel. AB 537 specifically requires government taxes and fees to appear in the total price before a consumer reserves a short-term lodging stay. The operational worksheet should therefore ask both ‘Is this amount imposed by government?’ and ‘Is this lodging offered under the California rule?’ A single tax checkbox cannot answer both.

AB 537 defines short-term lodging to include hotels, motels, bed-and-breakfast inns and other transient lodging. It also applies to the online surfaces and people that advertise, display or offer room rates. The law's full text includes additional geographic and enforcement language, so a hotel group with cross-border audiences should not infer that the shortest summary resolves every location-specific question. Determine where the offer is made, where the stay is located, who presents it and which law applies to that transaction.

This guide covers only the federal FTC rule and California examples because those are the claims reviewed for this page. It does not provide a fifty-state survey, an EU fee analysis or tax advice. For a property outside those examples, use the same evidence method but obtain the local rule from the responsible regulator or legislation. A platform's user interface or a competitor's displayed total is not a substitute for that legal check.

This guide covers the federal FTC rule and California examples, not every U.S. state, foreign market, booking model or consumer-protection law. The FTC rule does not set the amount a hotel may charge or prohibit a fee type; it governs how prices and charges are represented. California's SB 478 and the hotel-specific AB 537 show why a general rule about excluding government taxes cannot be applied without checking the lodging-specific law.

Before relying on a summary, identify where the stay is located, who presents the offer, what the guest is buying, whether the charge is mandatory or optional, and when the guest can see the full amount. Take that exact flow to qualified counsel if coverage or the interaction between laws is uncertain. For the separate task of auditing fee facts across live OTA listings, use the hotel taxes-and-fees guide; MisMatchMaker does not calculate prices, compare fees or decide legal compliance.