If you’re planning a trip for the summer or fall, be prepared for advertised prices to increase – which, believe it or not, is good news for consumers.
This is the result of a new California Law It aims to bring transparency to resort fees, service charges, host fees and other “drip pricing” that often pushes consumers’ bills far above previously advertised rates, especially in lodging and restaurants. Under the California law, known as SB 478Under a law that took effect July 1, businesses selling goods in California must now include the mandatory fee in their initial advertised prices.
“The price you see is the price you pay,” said California Attorney General Rob Bonta. Where is it?
The legislation has garnered a lot of attention because of its potential effects on struggling restaurants, many of which have imposed service fees since the pandemic arrived. (In fact, one lawmaker has proposed The Eleventh-Hour Exception (To exclude restaurants.) But the law also brings Big change That’s a big concern for travelers and the industry — especially when it comes to “resort fees” that many hotels automatically charge, saying they cover services and amenities like access to pools and gyms.
By placing a separate label on those fees, hotels have been able to advertise lower daily rates—an advantage when consumers are comparing prices. Now hundreds of U.S. hotels that add “resort fees” to their daily rates must include them in the advertised rates they see to California consumers.
Looking online, it may appear at first glance to consumers that the new rules have increased the price of a $149 room by $20 to $50 per night. In fact, hoteliers are disclosing all pre-tax charges as required — a change that could allow consumers to make better cost comparisons.
Cleaning fees should be visible soon
Meanwhile, the same law requires vacation rental hosts to include fees for service and cleaning from the start.
This follows an initial voluntary step taken by Airbnb in 2022. Under pressure to be more transparent, the company added a digital “toggle switch Initially allowing customers to see either the basic daily rate or the total amount, which shows how much those secondary charges add to the daily rate. Now, Airbnb officials have said that customers in California will automatically see a “total before taxes” number.
In practice, the new requirement means that instead of quoting a $150-per-night rate to some search-page visitors, Airbnb hosts must tell all consumers upfront that a five-night rental will cost $1,050 ($150 per day rate plus a $150 service fee and a $150 cleaning fee) — effectively $210 per day before taxes. An Airbnb representative said it would cover any destination the California-based consumer was considering.
Vacation rental company VRBO shows consumers two prices on its browsing pages: the base nightly rate in large bold type and the total price in smaller, plain type, with no toggling required.
Although this new law is for any business selling goods to Californians, many out-of-state businesses may not comply immediately. If you’re planning a trip outside of California, check carefully what is and isn’t being disclosed for the cost of your potential accommodations. (But if you’re going to a country within the European Union, don’t worry: the EU already has a new law that covers Californians.) Businesses need (Using your total cost to advertise, including taxes.)
“This is about exposing the hidden fees that are everywhere in our economy. It’s pretty pervasive,” said Jamie Court, president of the Los Angeles-based consumer watchdog. If offenders ignore the warning letters, they could face fines of up to $1,000 per violation (potentially including other damages and attorneys’ fees), he said.
Although these changes will disrupt some hotels’ profit-boosting strategies, these changes may give hoteliers a better chance of winning back customers from short-term rental companies, which have captured a large share of the travel market since the birth of Airbnb in 2007.
Lynn Mohrfeld, president and CEO of the California Hotel & Lodging Association, said the group supported the legislation in Sacramento because it would create a “level playing field” between hotels and vacation rental homes. “If everybody did it the same way, it would be a better shopping experience for the consumer.”
Industry experts say the California law is unlikely to change base rates for airlines or rental cars, because the extra fees these businesses charge are typically for voluntary services and items, such as preferred seats and insurance.
California Attorney General Bonta focuses on transparency law Nobody increases or decreases the price, But it requires greater clarity and aims to reduce “junk fees” and “drip pricing”.
How did resort fees get so high?
Although many hotels do not charge a resort fee, the practice has increased dramatically since the late 1990s, especially in vacation destination areas such as Las Vegas, Palm Springs and San Diego. The fee typically ranges from $20 to $50 per night.
According to one estimate, in 2017 the US hotel industry $2.7 billion In resort fees. Lauren Wolfe, an attorney for consumer advocacy group Travelers United and founder of KillResortFees.com, calls resort fees “the most deceptive and unfair pricing practice in the hotel industry.”
As consumer sentiment against the fees has grown, public officials have filed numerous court challenges across the country, including a lawsuit brought by Pennsylvania’s attorney general against Marriott International. That lawsuit led to 2021 agreementwhich led to Marriott’s announcement In May 2023, it announced it would begin including resort fees in initial website search results. Hyatt made a similar change in July 2023, and Hilton in September.
In 2023, President Biden will consider resort fees and Federal Trade Commission A rule targeting junk fees and related practices was proposed. Junk Fee Prevention Act introduced in Senate March 2023Subsequently the Hotel Fee Transparency Act was passed julyBut so far Congress has taken no action.
In the meantime, some questions remain about how the travel industry will respond to California’s transparency law. For example: What about companies that continue to advertise the lowest version of their rates in large font, while simultaneously disclosing the actual full price in much smaller font?
The court said, “This appears to violate the intent of the law,” but “it’s the court’s job to figure that out. Companies are going to push their limits.”
For those ready to make hotel or rental property reservations, another new state late-stage law may also be helpful: Starting July 1, under a law known as SB 644, California consumers must be given 24 hours to cancel most lodging bookings without a fee, as long as the consumer made the booking at least 72 hours before arrival. The law includes hotels, rental agencies and third-party booking services.
