Hotels Race to Comply with California's Junk Fee Laws
22.06.2024 - 15:11
/ skift.com
/ Sean Oneill
Come July 1, U.S. hotels will need to comply with a California state law that requires upfront disclosure of the total cost — including all mandatory fees — of hotel rooms, among other travel services like short-term rentals and cruises.
California Senate Bill 478 was designed to expose hidden “junk fees,” and marks a shift toward transparency about non-optional charges, including resort, destination, and parking or facility charges. A similar law, AB 537, creates the same restriction to let consumers do quick and accurate cost comparisons upfront.
The laws pose a compliance challenge for hotel operators selling directly and through third parties like Google and online travel agencies.
“We’re hearing from, hotels, large and small, varying levels of comfort with the implementation deadline looming,” said A.J. Rossitto, the advocacy director of the California Hotel and Lodging Association. “Definitely some implementation pains as folks are getting it sorted out, and it’s kind of a race to the finish at this point.”
Maulik Pandya, whose management company runs hotels in California, said his properties are now compliant after a week-and-a-half of work.
For example, Pandya runs an independent property on Route 66 in Victorville called GT Hotels Inn & Suites Extended Stay.
“I had to make sure all the OTAs [online travel agencies] and our own website list all the mandatory fees, mainly a resort fee,” Pandya said. “I updated all the rates and codes in the property management system, the revenue management system, the channel manager, and all the OTA extranets.”
Updating rates on countless smaller online travel agencies has been the biggest hurdle for some owners.
“It was straightforward to update the rates in the owner portals for main brands like Expedia and Booking.com,” Pandya said. “But I don’t have portal access for allthe subsidiary brands of Expedia Group, like Hotwire, and of Booking Holdings, like Agoda. Smaller OTAs keep displaying the wrong rates, and I’ve had to call to try to get things updated, and it’s been frustrating.”
Last-minute hiccups aside, most hotel owners don’t anticipate a problem on July 1, according to Laura Lee Blake, president and CEO of the Asian American Hotel Owners Association (AAHOA) — whose 20,000 members own about 60% of the country’s hotels.
Broadly speaking, small and large hoteliers have the existing tech tools to display advertised prices in compliance with the law.
“Getting into compliance with the California regulations should not be an issue for most hotels, even independent ones,” said Sebastien Leitner, vice president of partnerships at Cloudbeds, a property management system. “Transparent pricing is already standard in Europe — including showing the total cost