In May last year, Sameer Bhavnani, a 47-year-old tech executive from San Diego, was planning a trip to Palm Springs, California, where he planned to propose to his girlfriend. He found a perfect place on Vrbo: It featured a “spa in a grotto,” a slide and a swim-up bar, and it had lots of five-star reviews.
He decided to book two nights at $595 per night. But somehow, the total came to only about $2,300.
“And $595 plus $595 does not equal $2,300,” Mr. Bhavnani said. “The tax, host fee and service charge basically doubled the price. I asked the owner what the details of the fees were, and he said it was $300 for cleaning and $300 for 'air-conditioning.' This is Palm Springs. I expect air-conditioning everywhere just like there should be running water.”
Soon, if you're booking a place to stay in California — whether you live in the state or not — these kinds of hidden or “junk” fees will be much less likely to ruin your trip.
on a large scale on 1st July New state law Would ban hidden fees on purchases — including event tickets, hotel rooms and food delivery services — requiring businesses to include all mandatory fees or last-minute charges in their advertised and displayed price.
In short, “whatever price Californians see is the price they will pay.” Rob BontaState Attorney General, A statement said in October, when Gov. Gavin Newsom signed the bill.
A second law, also taking effect July 1, specifically targets the sometimes hefty hidden resort and cleaning fees at hotels.
“Earlier this year I was charged a destination fee at a hotel,” wrote California state Assembly member Marc Berman, who wrote the second letter Billsaid in a statement. “This is a hotel. Being a destination is not a special added feature; it is truly the essence of a hotel.”
Mr. Bhavnani spent his proposal getaway at a hotel that cost about $600 per night, including a $25-per-night resort fee. Despite the change in plans — and even though he forgot the ring and had to propose with “a big, gaudy fake” ring he bought from TJ Maxx — she still said yes.
Here are some things to know about how California's new junk fee law will affect hotels and short-term rentals.
What does it mean if you are booking a room in a hotel?
Some hotels are still trying to figure it out, said AJ Rossitto, advocacy director. California Hotel and Lodging Association,
But all resort fees, destination fees and facility fees — either those that appear in the list of charges just before you confirm your booking, or the “mandatory” ones that the hotel desk clerk might add to your bill at checkout — must be included in the initial price you see when you shop for options.
Some hotel chains, such as Choice, Hilton and Marriott, have begun reflecting all mandatory fees in the upfront prices for their listings nationwide, according to spokespeople for the three companies.
InterContinental, which operates other brands including Kimpton, Crowne Plaza and Staybridge Suites, has begun modifying its system so that room rates include all amenities and other mandatory fees, according to company spokesman Jamie Cwalinski. He said fee-inclusive displays will appear on all U.S. listings in the coming weeks.
What fees do hotels have to list?
Mr. Rossitto said it all comes down to one question: Is this fee mandatory? If a service is optional, it will not be included. But there should be a mandatory fee within an optional service, he explained.
“For example, if you purchase a massage and a 10 percent gratuity is mandatory, that 10 percent gratuity will be included in the listed massage price,” he said.
What is your opinion about short term rentals?
Cleaning fees, service fees, host fees: These types of mandatory fees often appear in a listing right before a booking ends on a short-term rental site like Airbnb or Vrbo.
For example, Airbnb has put a button on its website that allows all properties that appear in your initial search to display their prices as a “total before taxes.” For listings in California after July 1, travelers will always see these as part of the advertised price rather than at the end of the reservation process.
For those booking outside the state, if you turn on this feature, the price displayed in the results will include all mandatory charges.
Currently, Vrbo lists two prices in its initial search results: First, the per night rate without fees is shown in bold. Then, just below the per night rate, the total price for the entire stay is displayed, including all mandatory fees.
Will other states also follow this?
several other states Minnesota recently considered legislation targeting junk fees. passed its own junk fee lawWhich will come into effect from next year. California's laws, the first to be implemented in the US, come at a time when the federal government is considering action on this.
In October, President Biden announced an attempt to rein in junk fees—which, according to the statement, cost Americans billions of dollars each year. In November, the Federal Trade Commission proposed a decision This would prevent businesses across the country from misrepresenting the total costs of goods and services by omitting mandatory fees from advertised prices. Last April, the Federal Trade Commission an informal hearing The committee is open to hearing public comments on its proposed rule, which it will use to decide how to move forward with its proposal.
Will all this lead to higher prices?
This shouldn’t be the case, although it may seem so starting in July, as hotels and short-term rentals include the mandatory fee in their advertised prices.
This change may also reduce some costs.
Pam Knudson, an expert in short-term rental regulation AvalaraThe company, which makes tax compliance software, said short-term rental hosts and property managers may start to reevaluate what types of fees they're charging and decide to cut some fees to stay competitive.
“It really will depend on how they want to be seen compared to others listed on the same platform and in the same area,” Ms. Knudsen said.