The U.S. “Drip Pricing” Law

Approximately a year ago, California enacted two bills that brought significant changes to the state’s hotel industry. By mid-May 2025, the United States will introduce a similar law that will impact hoteliers globally.

This means that transparency in hotel pricing will no longer be just a best practice but a legal requirement when advertising to and accepting reservations from U.S.-based consumers. On May 12, 2025, the U.S. Federal Trade Commission will implement a new rule called “Drip Pricing” or “Hotel Fee Transparency” to safeguard consumers from misleading pricing strategies.

Following the law’s enforcement on May 12, 2025, any U.S. visitor using your booking platform must see the total price upfront, incorporating room rates and all mandatory fees (except government taxes and fees). This regulation will apply to all U.S.-based hoteliers, including chains, independent hotels, management companies, and any online booking engines targeting U.S. customers.

The “Rule on Unfair or Deceptive Fees” requires hotels to display the total price upfront during the booking process for U.S.-based consumers. This total price should cover the room rate and all necessary fees, excluding government taxes and fees, which can still be listed separately.

While it may be more challenging for the FTC to enforce the rule on non-U.S.-based hotels without a presence in the U.S., booking platforms like Expedia and Booking.com facilitating U.S. bookings are within the U.S. jurisdiction. Hotels must ensure compliance with the law to avoid legal consequences or fines.

To comply with the new law, hotels need to review and adjust their pricing strategies, integrate all charges into the advertised room rate, and ensure their systems align with the regulations. This strategic adjustment can help hotels stay competitive, enhance profitability, and improve their market position and revenue potential.

It is crucial for internal teams in revenue, sales, and marketing to be informed about the regulation to respond promptly and build trust with guests through transparent pricing. Cendyn, a global hospitality technology company, is committed to supporting hoteliers with compliant solutions like Cendyn CRS and Booking Engine by May 12, 2025, to meet regulatory requirements and enhance customer satisfaction.