New York City has adopted a new rule that bans hidden hotel fees and unexpected credit card holds, marking one of the most significant consumer protection measures for hotel pricing in the United States to date.
The rule, announced by Mayor Zohran Mamdani and the city’s Department of Consumer and Worker Protection (DCWP), aims to improve hotel pricing transparency and eliminate what regulators call “junk fees” in accommodation bookings.
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The measure is set to take effect in New York City on 21 February 2026 and is expected to influence how hotels disclose total room costs across the wider travel industry.
Rule details: what hoteliers must disclose
Under the new regulation, hotels operating in New York City — as well as those outside the city that advertise to New Yorkers — must clearly display the full price of a hotel stay, including all mandatory charges such as resort fees, destination fees or hospitality service fees that were previously added late in the booking process.
Unexpected credit card holds and deposits must also be disclosed prominently at the point of sale, rather than being revealed only after payment information is entered.
The DCWP’s final rule is modelled on a recent Federal Trade Commission framework but goes further by covering credit card holds explicitly.
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By GlobalDataHotels frequently use additional charges on top of advertised room rates, a practice known in the industry as drip pricing, which makes it harder for consumers to compare offers and understand total costs.
In 2025, the DCWP received more than 300 complaints from consumers about hidden hotel fees and surprise credit card holds, highlighting widespread frustration that the new rule seeks to address.
Expected impact on hotel pricing and travellers
City officials and economists estimate that removing hidden charges could save travellers a significant amount annually, with some projections suggesting savings in excess of $46 million in 2026 alone.
By requiring upfront pricing — where the total cost is visible before payment — the rule is intended to simplify hotel cost comparison for both business and leisure travellers and to reduce time spent navigating variable fee structures.
The requirement for clear disclosure is designed to reduce deceptive pricing practices and support more accurate planning for guests visiting New York City, particularly ahead of major events that will increase demand for hotel rooms.
Although the rule is regulatory and not tied directly to pricing caps, its implementation may influence broader industry standards on how accommodation providers globally present rates to customers.
Enforcement and broader consumer protection context
The DCWP will enforce the new pricing transparency requirements, using its authority under the city’s Consumer Protection Law. Hotels that fail to comply with the rule may be subject to enforcement action.
This measure is part of a wider city initiative to crack down on deceptive pricing and junk fees in various sectors, including earlier executive orders and the formation of a Citywide Junk Fee Task Force to monitor and address misleading charges in consumer transactions.
The rule complements existing protections in New York City’s hotel sector, such as requirements to notify guests of service disruptions and laws governing subcontracting practices at accommodation providers.
Together, these measures aim to enhance fairness in pricing and bolster consumer confidence in hotel bookings for both domestic and international travellers.
