Last May, Samir Bhavnani, a 47-year-old technology executive from San Diego, planned a trip to Palm Springs, California, where he planned to propose to his girlfriend. He found the perfect spot on Vrbo: It offered a “spa in a grotto,” a slide, and a swim-up bar, and had tons of five-star reviews.
He decided to book two nights for $595 per night. But somehow the total came to about $2,300.
“And $595 plus $595 doesn’t equal $2,300,” Mr. Bhavnani said. “Taxes, host fees and service fees basically doubled the price. I asked the owner what the fee was and she said it was $300 for cleaning and $300 for “air conditioning”. This is Palm Springs. I expect every place to have air conditioning, like running water.”
If you’re booking accommodation in California soon – whether you live in the state or not – this kind of sticker shock from hidden or “garbage” fees is far less likely to ruin your trip.
On July 1, a sweeping new state law will ban hidden fees on purchases — including event tickets, hotel rooms and food delivery services — by requiring businesses to include any mandatory or last-minute fees in their advertised and displayed prices.
In short, “The price Californians see will be the price they pay,” Rob Bonta, the state’s attorney general, said in a statement in October when Gov. Gavin Newsom signed the bill.
A second law, which also comes into force on July 1, specifically targets the sometimes high hidden resort and cleaning fees in hotels.
“Earlier this year, I was charged a destination fee at a hotel,” Marc Berman, the California representative who authored the second bill, said in a statement. “It’s a hotel. Being a travel destination is not a special perk; It’s literally the essence of a hotel.”
Mr. Bhavnani spent his planned getaway at a hotel that cost about $600 a night, including a resort fee of $25 a night. Despite the change in plans – and despite him forgetting the ring and having to propose with a “big, flashy fake” he bought at TJ Maxx – she still said yes.
Here’s how California’s new junk fee law will impact hotels and short-term rentals.
What does this mean when you book a hotel room?
Some hotels are still trying to figure it out, said AJ Rossitto, advocacy director for the California Hotel and Lodging Association.
But all resort fees, destination fees and facility fees – either those that appear on the fee list just before you confirm your booking or the “mandatory” fees that a hotel clerk adds to your bill at checkout – must be included in the original price, which you see when you search for options.
According to spokespeople for the three companies, some hotel chains such as Choice, Hilton and Marriott have already begun including all mandatory fees in their upfront prices for accommodations across the country.
InterContinental, which operates brands such as Kimpton, Crowne Plaza and Staybridge Suites, among others, has begun changing its system so that room rates include all amenities and other mandatory fees, according to Jamie Cwalinski, a spokesman for the company. The paid ads will be visible across all U.S. listings in the coming weeks, he said.
What fees do hotels have to declare?
It all comes down to one question, Mr. Rossitto said: Is this fee mandatory? If a service is optional, it is not included. But there would have to be a mandatory fee within an optional service, he explained.
“For example,” he said, “if you purchase a massage and there is a mandatory 10 percent tip, that 10 percent tip is included in the quoted massage price.”
How about short-term rentals?
Cleaning Fee, Service Fee, Host Fee: These types of mandatory fees often appear in a list just before you complete the booking on a short-term rental site like Airbnb or Vrbo.
Airbnb, for example, has installed a button on its website that allows all properties that appear in your initial search to display their prices as a “total price before taxes.” For listings in California after July 1, travelers will always see these as part of the advertised price and not at the end of the reservation process.
If you enable this feature when booking out of state, results will include all mandatory fees in the displayed price.
Currently, Vrbo lists two prices in its first search results: First, the nightly rate with no fees is shown in bold. Then, directly below the nightly price, the total price of the entire stay will be displayed, which includes all mandatory fees.
Will other countries follow this example?
Several other states have considered laws to combat junk fees. Minnesota recently passed its own trash fee law that will take effect next year. The California laws, the first in the U.S. to take effect, come at a time when the federal government is considering a crackdown.
In October, President Biden announced plans to curb junk fees – which the statement said cost Americans tens of billions of dollars each year. In November, the Federal Trade Commission proposed a decision that would ban companies across the country from misrepresenting the total cost of goods and services by omitting mandatory fees from advertised prices. Last April, the Federal Trade Commission held an informal, open-to-the-public hearing to solicit comments on its proposed rule, which it will use to decide how to proceed with its proposal.
Will all this lead to rising prices?
This shouldn’t be the case, although it may appear as of July, as hotels and short-term rentals include mandatory fees in their advertised prices.
The change could even reduce some costs.
Pam Knudsen, who specializes in short-term rental regulation at Avalara, a maker of tax compliance software, said short-term rental landlords and property managers may begin to reevaluate the types of fees they charge and opt for Deciding to lower some fees in order to remain competitive.
“It will really depend,” Ms. Knudsen said, “how they want to look compared to the other people listing on the same platform and in the same region.”
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2024-06-19 09:01:58
www.nytimes.com
