FTC Enforces New Pricing Transparency Rule in Las Vegas

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A clear view of hotel pricing information in a busy Las Vegas lobby.

News Summary

The Federal Trade Commission has implemented a new regulation to enhance pricing transparency for short-term lodging and live-event ticketing in Las Vegas. The rule requires businesses to disclose all mandatory fees upfront, aiming to combat ‘junk fees’ that significantly inflate costs for consumers. While some companies have quickly complied, others face scrutiny for not clearly displaying total prices. As the hospitality industry adapts, consumers are urged to report any non-compliance, amidst concerns about the enforcement capacity of the FTC.

Las Vegas, Nevada — A new rule from the Federal Trade Commission (FTC) took effect on December 18, 2023, aiming to increase transparency in pricing for short-term lodging and live-event ticketing. The regulation seeks to prevent businesses from engaging in bait-and-switch tactics by ensuring that all mandatory fees are disclosed upfront in advertisements and on websites.

This regulation specifically targets what are commonly referred to as ‘junk fees,’ which include additional costs often unseen until later in the booking process. Although the FVTC does not eliminate these fees, it mandates that businesses must clearly display such charges in their advertising, allowing consumers to see the total price before they proceed with a purchase.

In Las Vegas, where the hospitality industry is a cornerstone of the economy, the rule focuses particularly on resort fees. These fees can add up to $60 per night or more to a guest’s bill, significantly impacting the total cost of hotel stays. As a result of this new rule, consumers should notice more businesses adhering to the requirement to display total pricing, making it easier to compare options when booking accommodations and event tickets.

However, the implementation of this rule has not been uniform across the board. Some major travel websites like those associated with Caesars Entertainment and Wynn Resorts have quickly aligned their practices with the new FTC requirements, presenting both room rates and mandatory charges upfront. On the other hand, MGM Resorts has faced scrutiny for allegedly not fully complying with the new rule. Even though the company does show room rates, many consumers are reporting that total pricing is not clearly indicated before the booking process is completed.

MGM Resorts defends its method by stating that all costs are revealed once a date for a hotel room is selected, thus asserting compliance with the new regulation. Nonetheless, other establishments in the area, including Resorts World Las Vegas and Fontainebleau Las Vegas, have displayed similar practices to MGM, showcasing room rates initially without clear communication of additional fees.

Consumers who believe a business is violating the FTC’s new rule are encouraged to report these infractions on a dedicated fraud website created by the FTC. Non-compliance can result in severe repercussions for businesses, like mandatory compliance orders, required refunds to customers, and possible civil penalties.

Despite the regulation, there are still doubts concerning the FTC’s capacity to effectively enforce the new rule. Recent administrative changes have led to a reduction in staff, leading many to question the vigilance of enforcement efforts moving forward. The FTC clarifies that a “clear and conspicuous” disclosure is any information presented in a way that is easily understood and not easily overlooked, whether through visual or audible means.

The FTC’s initiative aims to save American consumers an estimated 53 million hours and $11 billion in the coming decade due to reduced confusion and time spent on booking processes. However, skepticism remains regarding the effectiveness of the rule, especially in light of resistance from certain segments of the industry. Notably, the incoming chairperson, Andrew Ferguson, was the only opposing vote against the implementation of this rule, indicating potential pushback from various stakeholders in the tourism and hospitality industries.

In summary, while the FTC’s new rule on hotel and ticket junk fees is designed to enhance pricing transparency for consumers, early compliance reports indicate a mixed landscape in Las Vegas. Travellers and consumers increasingly demand clearer pricing practices, and as the new regulation settles in, it remains to be seen how effectively it will be enforced and how businesses will respond in the coming months.