Last May, Samir 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 the perfect spot on Vrbo: It offered a “cave spa,” a slide, and a swim-up bar, and it had plenty of five-star reviews.
He decided to book two nights, at $595 a night. But somehow, the total came to about $2,300.
“And $595 plus $595 does not equal $2,300,” Mr. Bhavnani said. “Taxes, hosting fees and service charges basically doubled the price. I asked the owner what the charge was and was told it was $300 for the cleaning and $300 for the “air conditioning”. This is Palm Springs. I expect every place to have air conditioning like it has running water.”
Soon, if you book a place to stay in California – whether you live in the state or not – this kind of sticker shock from hidden or “junk” fees will be much 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 all mandatory or last-minute fees in the advertised and displayed price their.
In short, “the price Californians see will be the price they pay,” Rob Bonda, the state’s attorney general, said in a statement in October when Gov. Gavin Newsom signed the bill into law.
A second law, which also takes 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,” Marc Berman, the California state lawmaker who authored the second bill, said in a statement. “It’s a hotel. Being a destination is not a special add-on. it is literally the essence of a hotel.”
Mr. Bhavnani spent his proposed getaway on a hotel that cost about $600 a night, which included a $25-a-night resort fee. Despite the change in plans — and even though he forgot the ring and had to propose with a “big, fancy fake” he picked up at a TJ Maxx — she said yes.
Here are some things to know about how California’s new trash law will affect hotels and short-term rentals.
What does this mean if you book a hotel room?
Some hotels are still trying to figure this out, said AJ Rossitto, director of advocacy at the California Hotel and Lodging Association.
However, all resort fees, destination fees, and facility fees — whether those shown on the list of charges just before you confirm your reservation, or the “must-haves” that a hotel desk clerk may add to your bill at checkout — will must be included in the original price you see while shopping for options.
Some hotel chains, including Choice, Hilton and Marriott, have already begun showing all mandatory fees in their upfront rates for listings across the country, according to spokespeople for the three companies.
InterContinental, which operates brands such as Kimpton, Crowne Plaza and Staybridge Suites, among others, has begun modifying its system so that room rates include all amenities and other mandatory charges, according to Jamie Cwalinski, a spokesman for company. The screens that will include a charge will be visible in all US listings in the coming weeks, he said.
What charges must hotels report?
It all boils down to one question, Mr. Rossitto said: Is this fee mandatory? If a service is optional, it will not be included. But there should be a mandatory fee for an optional service, he explained.
“For example,” he said, “if you buy a massage and there is a mandatory 10 percent tip, that 10 percent tip will be included in the listed massage price.”
How about short term rentals?
Cleaning fee, service fee, hospitality fee: These types of mandatory fees often appear in a list just before you complete your reservation on a short-term rental site like Airbnb or Vrbo.
Airbnb, for the first time, has installed a button on its website that allows all properties that appear in your initial search to display their prices as “total before taxes.” For California listings after July 1st, travelers will always see them as part of the advertised price instead of at the end of the booking process.
For those booking out of state, if you enable this feature, the results will include all mandatory charges in the displayed price.
Currently, Vrbo lists two prices in its initial search results: First, the free night is shown in bold. Then, just below the night’s stay, the total price of the entire stay is displayed, which includes all mandatory charges.
Will other states follow?
Several other states have considered legislation targeting litter fees. Minnesota recently passed its own trash law, which will go into effect next year. California’s laws, the first in the US to take effect, come as the federal government weighs a crackdown.
In October, President Biden announced an effort to curb garbage fees — which, according to the statement, cost Americans tens of billions of dollars each year. In November, the Federal Trade Commission proposed a ruling that would prohibit businesses 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 hearing that was open to the public to hear comments on its proposed rule, which it will use to decide how to proceed with its proposal.
Will all this raise prices?
It shouldn’t, although starting in July, it could make them look, as hotels and short-term rentals include mandatory fees in their advertised rates.
The change could even cut some costs.
Pam Knudsen, who specializes in short-term rental regulation at Avalara, a maker of tax compliance software, said short-term rental hosts and property managers may begin to reevaluate the types of fees they charge and decide to cut some fees to stay competitive. .
“It’s really going to depend,” Ms. Knudsen said, “on how they want to look compared to the other people who are listing on the same platform and in the same area.”
