California’s Governor signed SB 478 on Saturday. It bans hidden fees, though airlines and car rentals are excluded from the ban. That leaves hotels as the major offender in the travel space which will feel the brunt of the impact – and online travel agencies which sell hotel rooms, too.
Effective July 2024 the state will ban the practice of displaying a headline price that is lower than the actual price of a product or service, and which then “discloses additional required fees in smaller print, or reveals additional unavoidable charges later in the buying process.”
- Hyatt, Marriott, and even Hilton are moving to display all-in prices on their own websites – so that resort, destination, and other scam fees (like energy surcharges – pay extra for the light bulbs) won’t make it more difficult to comparison shop hotels. But other chains like IHG and Best Western (sometimes they have resort fees too) haven’t yet followed suit.
- And online travel agency sites like Expedia and Booking.com – where people compare not just within a chain but across chains – haven’t followed suit either. California is big enough that they’re going to have to, unless they can challenge the law.
Airline pricing is strictly a federal issue under the Airline Deregulation Act. State regulation is pre-empted, so California’s rules cannot apply. The Department of Transportation has been working on new fee disclosure rules for a year but the ones they’ve proposed actually hand more power to airlines, not less.
Meanwhile car rentals are excluded from these rules, and car rentals have the scammiest fees of all. They get almost no attention. From tourism commission recovery fees; customer transportation fees; parking recovery fees; premium location charges; energy surcharges; vehicle license recovery fees; air conditioning recovery fees; and seasonal tire fees, junk fees often add 50% – 100% to the cost of a car rental.
I anticipate California’s new law to reverberate across the hotel industry, and as is often the case California to effectively regulate the nation since in most industries it doesn’t make sense to exit the California market but it often doesn’t make sense to market to California consumers differently than other consumers.
(HT: Alex G.)