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US: Sweeping new laws have come into effect in the US state of California [1 July] that require travel sellers and other types of businesses to include all mandatory fees or last-minute charges in the upfront displayed price.
A law known as AB 537, which was agreed upon the signing of a bill by California governor Gavin Newsom in October, requires short-term rental and hotel companies to provide the total price before a visitor checks out, including resort fees, destination fees and facility fees. However, taxes do not have to be shown on first view.
Meanwhile, SB 478 bans so-called ‘junk fees’ on purchases ranging from hotel rooms to event tickets and food delivery services.
Currently when booking a short-term rental via an online travel agency [OTA], cleaning fees, service fees and host fees are mandatory charges that appear on the page just before you make a booking. However, each of the major OTAs has their own approach to displaying mandatory fees and charges that a guest must pay in advance.
In the first case, Airbnb has introduced a button on its website that allows all properties appearing in an initial search to display their prices as “total before taxes”. From now on in California, these will all be seen as part of the advertised price, as opposed to them appearing at the end of the booking process.
However, Airbnb is continuing to show guests in California the nightly rate including all fees, but excluding taxes.
Travellers booking from outside of the state can turn the button feature on to include all mandatory fees in the displayed price.
In the case of Expedia Group vacation rental brand Vrbo, the platform currently lists two prices in its initial search results: The first is the nightly rate without fees [written in bold] and the second displays the total price of the entire stay, including all mandatory fees but excluding taxes, in a lighter and smaller font.
In contrast, Booking.com displays the nightly rate upfront, including mandatory fees but not taxes, for both short-term rental and hotel bookings, whether you are in California and looking to book a room in the state or whether you are in California but looking for accommodation outside of the state.
For travellers outside of California and browsing for accommodation outside of the state on Booking.com, they would typically see the upfront nightly rates displayed in bold for both short-term rentals and hotels, with taxes and fees displayed in a slightly lighter font. While Booking.com displays the nightly rate in bold [excluding fees and taxes] for states and people outside of California, the platform highlights the nightly rate [including fees but not taxes] for those in California itself.
Among the other laws that came into effect in California on 1 July were date-rape testing kits in bars, security deposit limits for tenants, an 11 per cent excise tax on some sales of firearms, ammunition and gun parts, credit card ID codes for gun retailers, DIY phone fixes, strengthened laws around workplace violence, new school rules relating to student suspensions, and menstrual products in California state schools.
The California laws are a landmark moment as they are the first of their kind to come into effect in the United States, although Minnesota has already passed its own junk fee law to come into effect in 2025 and a number of other states are also said to be considering similarly targeted legislation.
At the same time as the California bill was signed last October by governor Gavin Newsom, President Joe Biden announced his plans to rein in junk fees, which he said were costing Americans “tens of billions of dollars each year”.
