On Wednesday, New York City’s newly elected Mayor Zorhan Mamdani issued a final rule banning hotels across the city and country from charging consumers hidden “junk fees,” or the added costs tacked on to room rates often labeled as “destination fees,” “resort fees” or “hospitality service fees,” according to release from the Office of the Mayor.
The New York City Department of Consumer and Worker Protection proposed the rule last year, modeling it after a Federal Trade Commission rule that took effect in May. That rule makes it a deceptive trade practice “to offer, display or advertise a price for a hotel without clearly and conspicuously disclosing the total price of the stay, including all mandatory fees,” according to the release.
In banning hotel junk fees, Mamdani aims to “ensure transparency for consumers and save millions of dollars overall,” per the release. The mayor’s move garnered support from a local hotel owners association and workers’ union.
Hurting ‘honest small businesses’
In addition to hotel junk fees, Mamdani also took aim at unexpected credit card holds or deposits issued by New York hotels, banning those as part of the final rule as well. The pricing practices “cheat consumers and hurt honest small businesses,” according to the Mayor’s office.
The junk fee prohibitions of the final rule will go into effect in New York on Feb. 21, the mayor’s office announced. The ruling will apply to any hotel advertising to NYC residents, regardless of where the hotel is based.
DCWP Commissioner Sam Levine said in the release that the department will “use its full enforcement authority to ensure hotels comply with the laws and rules of our city and we will be vigilant to ensure consumers have transparency in their transactions and that workers’ rights are respected.”
Hospitality industry reacts
Vijay Dandapani, president and CEO of the Hotel Association of New York, which represents more than 300 hotels in the city, said in a statement that the “hotel industry strongly supports rules to prevent hidden fees and to protect our customers, and has been outspoken about this issue in the past. We will work with the Mamdani administration to ensure that these new rules achieve those goals while also ensuring that hotels which do obey the law and treat customers fairly are not unduly affected.”
Rich Maroko, president of New York hospitality workers’ union the Hotel and Gaming Trades Council, also applauded Mamdani’s move during a Wednesday press conference.
Hospitality industry associations, including the American Hotel & Lodging Association, the Asian American Hotel Owners Association and the Travel Technology Association, have previously applauded legislation prohibiting deceptive advertising of hotel room prices.
Other hotel legislation in NYC
In addition to this new junk fees rule, hotels in New York are also required to comply with the Hotel Service Disruption Act, which requires that consumers be notified of changes to service during their stay, as well as the Safe Hotels Act, which requires hotel operators to obtain a license in order to operate in the city.
Hotel industry associations rallied against the Safe Hotels Act before its passage, with former AHLA Interim President and CEO Kevin Carey previously claiming it would have destructive effects on New York’s hotels.
