What is Colorado’s “Junk Fee” Ban? Compliance Checklist For Hotels, Restaurants & Hospitality Businesses (HB 25-1090)

Colorado hospitality businesses are now operating under Colorado House Bill 25-1090, the “Protections Against Deceptive Pricing Practices” law, which took effect on Jan. 1st. The law doesn’t specifically define “junk fees,” rather, it requires that all mandatory, non-avoidable fees be included in the total price displayed to consumers. This comprehensive legislation fundamentally changes how hotels, restaurants, and other hospitality establishments must display prices, advertise services, and handle mandatory fees. Now that the law is in force, hospitality operators must ensure they are in full compliance to avoid significant penalties and consumer litigation.

The Core Requirement of Hb 25-1090: Total Price Transparency

At its heart, HB 25-1090 targets “drip pricing”—the practice of advertising a low base price and adding mandatory fees later in the transaction process. The law, codified at C.R.S. § 6-1-737, now requires businesses to display a single “total price” that includes all mandatory fees upfront, before a customer commits to a purchase.

The “total price” must include all costs required to purchase, enjoy, or utilize a good or service, as well as any costs that are not “reasonably avoidable.” A crucial distinction: a fee is only optional if it is reasonably avoidable within the actual transaction itself. The customer’s ability to shop at a different business does not make a fee “reasonably avoidable.” True avoidability requires real consumer choice within the transaction—such as choosing standard versus expedited shipping, avoiding a late fee by paying on time, or choosing to pay by cash where credit card fees apply.

For hospitality businesses, this means the advertised price must be “clearly and conspicuously” displayed and include every mandatory charge. The total price must be more prominently displayed than any other pricing information presented to consumers. Whether on a website, menu, booking platform, or print advertisement, the full price—not just the base rate—must be what customers see first.

Special Provisions for Restaurant Service Charges and Hospitality Fees

The law includes specific provisions for “food and beverage service establishments” that address the industry’s common use of mandatory service charges, automatic gratuities, and hospitality fees. Importantly, the law does not prohibit service charges—restaurants can still add “kitchen appreciation” fees, automatic gratuities for large parties, or other hospitality charges. What has changed is the disclosure requirement.

Under HB 25-1090, restaurants can comply with the disclosure requirements if they:

• Include in the total price the amount of any mandatory service charge
• Disclose how the mandatory service charge is distributed
• Distribute any mandatory service charge exclusively to non-managerial employees in accordance with applicable laws

Practical Compliance Language for Restaurant Service Charges

This provision provides clarity for restaurants that use automatic gratuities for large parties or mandatory service charges. However, the key requirement is disclosure—customers must understand both that a service charge exists and how it will be allocated among staff before they order or receive their bill. Vague statements like “service charge may apply” will no longer suffice. Businesses must post this information on menus, at cash registers, on websites, on receipts, and even explain it audibly to phone customers.

Key Compliance Points:

• The language must state where the charge is going (purpose and distribution)
• Restaurants do NOT need to detail the percentage distribution breakdown (e.g., “5% to back-of-house, 10% to front-of-house, 5% to administration”)
• Simple, clear language is sufficient as long as customers understand what the charge supports

The Colorado Attorney General’s office is expected to complete rulemaking on HB 25-1090 during 2026, which may provide additional guidance on compliance standards. Restaurant operators should monitor for updates from the AG’s office and industry associations.

Impact on Hotel Resort Fees, Amenity Fees, and Booking Charges

Hotels that charge resort fees, amenity fees, booking fees, or other mandatory charges face substantial changes under the new law. These fees must now be incorporated into all advertised prices as a single number. A hotel room advertised at “$199 per night” cannot add a $35 resort fee at checkout—the advertised price must be $234 per night from the outset.

The “Clear and Conspicuous” Standard

The law requires all pricing information to be “clearly and conspicuously” disclosed, meaning it must be easily noticeable and understandable. Key requirements include:

• Disclosed in the same medium as the pricing communication (if advertised on a website, disclosed on that website)
• Visual disclosures must be distinguishable in size, contrast, and location • Electronic disclosures must be unavoidable
• Written in understandable language
• Not contradicted by anything else in the communication

This strict standard applies across all marketing channels, including:

• Hotel websites and booking engines
• Third-party booking platforms (OTAs)
• Print advertisements and promotional materials
• Email marketing campaigns
• Social media posts with pricing information

Hotels should audit all pricing displays to ensure the total price—not the base rate—is the most prominent figure displayed to potential guests.

Important Note: What’s Excluded From “Total Price”

Notably, the law defines “total price” as the price before certain charges that consumers might expect to be included. Taxes, optional shipping fees, and certain other charges must be disclosed separately as “other pricing information.” This means hotels must display the total price including all mandatory fees, but may exclude sales tax and other government-imposed fees from that total price display.

The Indeterminate Pricing Exception – Application to Hospitality Businesses

The law recognizes that some services cannot have a fixed total price at the time of the initial offer. An important exception exists for businesses that can demonstrate the total price is “indeterminate” at the time of the offer because it depends on factors beyond the business’s control or on consumer choices.

To qualify for this exception, a business must:

1. Demonstrate that the total price cannot reasonably be known at the time of the offer
2. Clearly and conspicuously disclose the factors that determine the total price
3. Disclose any mandatory fees associated with the transaction
4. Disclose that the total price may vary based on these factors

This exception could apply to banquet and catering services where the final price depends on guest count, menu selections, or event duration, or where final costs depend on actual consumption or service levels selected by the customer. However, the burden is on the business to demonstrate that the price truly cannot be determined in advance and to provide clear disclosure of all pricing factors. For most hotel room bookings and restaurant meals, where pricing is generally fixed and known in advance, this exception is not likely to apply.

Enforcement and Penalties: Why Compliance Matters

Now that the law is in effect, enforcement has already begun. According to the Colorado Attorney General’s Office, complaints about junk fees have started coming in during the first weeks of 2026, though the office has declined to provide specific details.

Violations of HB 25-1090 constitute “deceptive, unfair, and unconscionable” acts under the Colorado Consumer Protection Act. The consequences are substantial:

Private Right of Action: Consumers can send a written demand for reimbursement of unlawfully imposed fees and actual damages. If the business fails to comply within 14 days, the consumer may file a lawsuit to recover: All illegally charged fees; Actual damages; Attorney’s fees and costs; 18% annual interest on unlawfully charged amounts, compounded annually.

Attorney General Enforcement: The Colorado Attorney General can investigate violations and impose civil penalties. There is no requirement for a pre-suit warning notice—a single complaint can proceed directly to enforcement action.

Class Action Risk: Because the law creates a private right of action with attorney’s fee recovery, businesses with recurring fee violations face potential class action exposure. A $25 monthly processing fee charged to multiple customers, for example, could quickly escalate into six-figure liability when multiplied across affected consumers and years of compounded interest.

Compliance Checklist for Hospitality Businesses

With the law now in effect, hospitality operators should take the following steps immediately if they have not already done so:

1. Audit All Pricing Displays: Review websites, booking platforms, menus, advertisements, and marketing materials. Ensure the total price is displayed more prominently than any base price or other pricing information.
2. Update Booking Systems: Modify reservation systems to display total prices inclusive of all mandatory fees. Work with third-party booking platforms to ensure compliance across all channels.
3. Revise Service Charge Policies: For restaurants using service charges, update menus and receipts to clearly disclose both the amount and distribution of service charges.
4. Train Staff: Ensure front-line employees understand the new requirements and can accurately communicate total pricing to customers.
5. Review Contracts with Third-Party Vendors: Verify that OTA agreements and other distribution channels allow for compliant pricing displays.
6. Document Compliance Efforts: Maintain records of pricing policy updates, staff training, and system modifications to demonstrate good faith compliance efforts.

Key Takeaways

Colorado’s HB 25-1090 represents one of the most comprehensive price transparency laws in the nation, part of a broader trend toward eliminating “junk fees” and hidden charges. Similar legislation has been enacted or proposed in California, Florida, and Massachusetts, suggesting this regulatory approach may spread nationwide.

For Colorado hospitality businesses, compliance is now mandatory. The law applies to all conduct occurring on or after January 1, 2026, making immediate remediation of any non-compliant pricing practices essential to avoid costly penalties, consumer litigation, and reputational harm.

While the law imposes new obligations, it also provides an opportunity for hospitality businesses to build consumer trust through transparent pricing practices. Businesses that embrace clarity and honesty in their pricing may find competitive advantages in a marketplace increasingly skeptical of hidden fees.

Frequently Asked Questions: Colorado Junk Fee Law for Hospitality

Q: Can Colorado restaurants still charge service charges or hospitality charges? A: Yes. The law does not ban service charges, automatic gratuities, or hospitality fees. However, these charges must be clearly disclosed in the total price shown to customers, and restaurants must explain how the charges are distributed to employees.

Q: Do hotel resort fees violate Colorado’s junk fee law? A: No, resort fees are not prohibited. However, hotels must include resort fees in the advertised room rate. A room cannot be advertised at “$199/night” if there is a mandatory $35 resort fee—the advertised price must be $234/night.

Q: What fees are considered “junk fees” under HB 25-1090? A: The law doesn’t specifically define “junk fees.” Rather, it requires that all mandatory, non-avoidable fees be included in the total price displayed to consumers. Hidden fees, processing fees, convenience fees, and other mandatory charges must be disclosed upfront.

Q: Does this law apply to third-party booking sites like Expedia or OpenTable? A: Yes. Hotels and restaurants must ensure pricing on all platforms—including online travel agencies (“OTAs”) and reservation systems—complies with the total price disclosure requirement.

Q: What is the penalty for violating Colorado’s price transparency law? A: Violations are considered deceptive trade practices. Businesses may face consumer lawsuits seeking reimbursement of illegal fees plus 18% annual interest, actual damages, and attorney’s fees. The Colorado Attorney General can also impose civil penalties.