Fee Transparency Could Save U.S. Hotel and Short-Term Rental Customers $1 Billion Per Year

In a long, dense and fascinating proposed rule document the U.S. Federal Trade Commission published earlier this month in the Federal Register, it outlines what the effect of fee transparency will be on the time consumers save to book online.

The document outlines the proposed rules, and calculates the times savings and costs involved in compliance with these new rules, for sectors such as the live-ticketing industry, the hotel and short+term rental industry (which it jointly calls short-term lodging sector) and the restaurant sector.

For the short-term lodging sector, these two charts of calculation are worth looking at. All of the benefits and costs and have been calculated over 10 years period.

The FTC analysis says that on an economy-wide basis, there are positive benefits to the proposed rule if the benefit per U.S. consumer is at least $6.65 per consumer per year over a 10-year period. Quantified benefits in these industries derive from time savings consumers would experience due to greater price transparency, leading to more efficient shopping processes. Quantified costs derive from the costs to firms of complying with the proposed rule.

Over a 10 year period, the U.S. consumers will save anywhere from $663 million on the low end to $980 million per year on the highest end of the assumptions, and anywhere from $4 billion to $8 billion over the 10 year period.