The issue of price transparency in the short-term rental industry is becoming more complex as varying state laws come into play. Airbnb has recently implemented changes to comply with a new California law, SB 478, which requires total pricing to be displayed upfront to expose hidden fees. This includes host cleaning fees and service fees, which have been a source of contention for consumers. The law applies to companies with operations in California and covers consumers in the state, meaning guests booking from other states may not see the total price automatically.
Airbnb introduced a toggle button for total price display in December 2022 and rolled it out across the U.S. by May 2023. This change not only benefits consumers in making informed decisions about their accommodation choices but also helps hosts to set competitive prices by viewing rates of similar properties. The default view on Airbnb in the U.S. currently shows the nightly rate prominently with the total price in a lighter font, but in California, starting July 1, the total price will be displayed upfront. This includes search results, maps, filters, listings, and wish lists on the platform.
Other major players in the short-term rental industry, such as Booking.com and Expedia Group, are also looking to comply with the California law by displaying total prices inclusive of fees. While Booking.com currently displays total prices before taxes in California, Vrbo shows nightly rates prominently with the total price in a lighter font. The law would also impact property managers with operations in the state, adding another layer of complexity to price transparency regulations. All three platforms are advocating for consistent federal standards on pricing transparency to avoid dealing with varying state laws.
One challenge faced by short-term rental platforms in displaying total prices is the variation in taxes across different municipalities, counties, and states. This complexity makes it difficult to provide an accurate total price upfront, leading to a preference for including fees but excluding taxes in the displayed total. Despite these challenges, the industry is moving towards improved transparency to benefit both consumers and hosts. The total price toggle introduced by Airbnb and similar measures taken by other platforms indicate a commitment to providing more clarity for users.
The issue of price transparency is not unique to short-term rentals, as consumers have also expressed concerns about hidden fees in hotels and other travel accommodations. Resort fees and cleaning fees are among the charges that often catch consumers by surprise, leading to a call for more upfront pricing information. The new California law is a step towards addressing these concerns and ensuring that consumers have access to clear pricing details when booking accommodation. By aligning with this law, major players in the short-term rental industry are taking a proactive approach to improving transparency and consumer satisfaction.
