Overview
Steptoe of counsel Kimberly Graber and former FTC associate director, Serena Viswanathan, authored an article that appeared in Law360, "Ending All-In Airfare Pricing Could Pose Ad Dilemma For Cos." The article discusses evolving US regulations on price advertising for airfares and lodging. The Department of Transportation (DOT) currently requires airfare ads to show the full price, including government taxes and fees, while the Federal Trade Commission (FTC) and several states allow hotel ads to exclude government charges initially. The FTC’s new rule, effective May 2024, bans "drip pricing" for mandatory fees but permits excluding taxes from advertised lodging prices.
DOT plans to revisit its full fare rule, signaling possible flexibility in displaying government charges. Airlines and industry groups advocate aligning DOT standards with FTC practices, arguing current rules obscure rising taxes. Consumer advocates, however, favor all-in pricing for transparency. If DOT relaxes its rule, airlines may advertise lower base fares without taxes, creating competitive pressures and potential consumer confusion. Any changes could reshape travel advertising strategies, presenting both risks and opportunities for businesses.
