If you’re looking to book a holiday in California, it may have been worth waiting until July, as a new law is set to be implemented that could make things a lot more affordable. Here are the details.
California’s New Law
California is cracking down on hidden fees that have long plagued hotel bookings and hoping to provide consumers with full transparency starting July 1. Two new state laws are set to revolutionize the way Californians book their accommodations.
Overview of Senate Bill 478
Senate Bill 478 is the star of the show here, tweaking California’s Consumer Legal Remedies Act to force hotels to lay bare all those extra fees before you even think about hitting the book button.
Cracking Down on Surprise Fees
These so-called “surprise fees,” often hidden until the checkout process, include resort fees, cleaning charges, and other additional costs. They are notorious in the hospitality, cruise, and airline industries and often inflate a final bill with unexpected charges, causing a lot of frustration.
Legal Pressure on Major Hotel Chains
In response to lawsuits and a bit of federal arm-twisting, many major hotel chains like Marriott, Hilton, Hyatt, and Choice Hotels have already started to come clean about resort destination fees right from the booking stage.
Marriott’s Legal Settlement as a Turning Point
In 2021, Marriott reached a settlement with the Pennsylvania attorney general to display resort fees in future bookings, setting an example that other U.S. hotel chains have followed.
Senate Bill 478’s Scope Beyond Hotels
Senate Bill 478 makes it illegal for any business to advertise or show a price that doesn’t include all the mandatory fees (excluding government-imposed taxes or fees.)
Expanding to Other Services
It’s a move that doesn’t only affect hotels; food delivery services, event tickets, and even cruise lines will have to stop hiding costs if they want to avoid hefty fees in California.
Statement from California’s Attorney General
“Today, California is eliminating hidden fees. These deceptive fees prevent us from knowing how much we will be charged at the outset,” said California Attorney General Rob Bonta in an October 2023 statement.
“The Price They See Will Be The Price They Pay”
“They penalize companies that are upfront and transparent with their prices. The price Californians see will be the price they pay.”
Governor Gavin Newsom’s Support for Transparency
Governor Gavin Newsom also signed Assembly Bill 537 into law last year, which specifically targets hidden cleaning and service fees at resorts.
Overview of Assembly Bill 537
This law will also take effect on July 1, meaning hotels will have to disclose any additional costs alongside room rates.
Forcing Airbnb’s Hand
Even the home-sharing giant Airbnb isn’t off the hook. Currently, users need to toggle a switch to display nightly rates, including all fees. With the new legislation, this function will become redundant, as total costs will have to be displayed upfront by default.
Industry Response to the Legislation
While representatives from Hyatt, Hilton, and Airbnb have not commented on the new legislation, industry experts predict it won’t drive prices through the roof. Instead, it should make it easier for people to figure out the real cost of their stay across different hotels.
Consumer Benefits
“The new rule should make it easier for consumers to compare the true total cost of their stay, factoring in the base rate, taxes, and mandatory fees, between various hotels,” said Henry Harteveldt, Founder of Atmosphere Research.
Expectations for Price Stability
“This should be especially helpful on price comparison sites and online travel agency sites and apps, where today a hotel that has a lower rate but a high resort or destination fee may appear first.”
National Efforts to Combat Junk Fees
The Biden administration has been on a mission to eliminate junk fees nationwide since 2021.
Taking Aim At Hidden Airline Fees
Recently, the U.S. Department of Transportation told airlines that by 2025, they must display the full cost of flights upfront – including bag and seat assignment fees. Airlines are pushing back, but the message is clear: transparency matters.
Potential Impact on Other States
With California leading the charge against hidden fees, other states might just follow suit.
Future Outlook
For now, travelers booking hotels in California can look forward to a more straightforward and honest experience, free from the frustration of surprise charges at checkout.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
