Is Travel Pricing Going to Become More Transparent in 2024?

The travel industry is no stranger to complaints about hidden fees, a persistent issue that has prompted regulatory scrutiny and even a mention in President Biden's 2023 State of the Union speech. The pricing landscape is evolving, with 4 major developments that demand your attention.

The Focus: Mandatory Fees

New regulations seem to be zeroing in on mandatory fees. Mandatory fees include items like trip insurance fees or cleaning fees for short-term rentals. In 2024, I expect Mandatory fees to be under the spotlight. The regulators are looking to eradicate deceptive pricing and thus would demand that Mandatory fees be disclosed upfront to buyers.

FTC’s First Move: Unveiling the Hidden

The Federal Trade Commission (FTC) has proposed a rule to tackle what's known as "junk fees." This rule prohibits companies from advertising prices that hide or omit mandatory fees in the comment period. If enacted, hotels, short-term rentals, and online travel agencies must display the total price, including all mandatory fees, thus avoiding hidden surprises for consumers.

California Leads the Way

California has taken a proactive stance with two laws, AB537 and SB478, set to take effect in July. These laws mandate upfront disclosure of all fees by hotels and short-term rental companies. SB478, in particular, addresses the issue of drip pricing, ensuring that advertised prices reflect the true cost of a service, and promoting fair competition.

DoT and Airlines

The Department of Transportation is set to enhance transparency in airline fees, with a final rule expected in March. Covering baggage, change, and cancellation fees, the rule aims to empower consumers with clear and comprehensive information during the flight booking process.

What Does This Mean for Travel Buyers and Travel Companies?

For travel companies, these developments signal a shift towards greater transparency and accountability. Online Travel Platforms, especially for corporate travel, will have to present accurate, upfront fee displays.

While this is a great development for Travel Buyers and Consumers, expect some flux while a single standard is established. Several travel companies are taking the lead on transparency, and calling for the establishment of a single standard for mandatory fee displays. Once the standard is established, life for consumers and buyers will become simpler and more streamlined.