20 CALIFORNIA LODGING NEWS www.calodging.com REGULATIONS California hoteliers face a new pricing regulation this summer that will affect how properties advertise their room rates to potential guests, part of a nationwide push to eliminate what some call “hidden” or “junk” fees. In 2023, Governor Gavin Newsom signed two measures into law that essentially require not only hotels but most businesses to inform consumers about the full cost of a purchase in advance. The two laws, Senate Bill 478 (Dodd, 2023) and Assembly Bill 537 (Berman, 2023), take effect on July 1, 2024. California’s new laws follow legal action that began in 2019 when three attorneys general—Karl A. Racine of Washington, D.C., Doug Peterson of Nebraska, and Michelle Henry of Pennsylvania—attacked what they called “deceptive resort fees” charged at some Marriott International and Hilton properties. Those fees were not included in the room rate initially quoted to guests but were added to their bills prior to checking out. That action drove national media coverage around the existence of those fees across many industries, such as transportation, and led to calls for legislation to require more transparent business practices, including hidden fees that are common in online shortterm rental sites. In President Joe Biden’s 2023 State of the Union Address he took a firm stance on tackling “junk” fees and “surprise resort fees that hotels tack on to your bill.” According to a 2019 survey by Consumer Reports, in the two years prior, only 34% of respondents reported experiencing a hidden hotel fee. The American Hotel & Lodging Association’s most recent data shows just 6% of hotels charge a mandatory fee nationwide, amounting to $26 per night for resort, destination, or amenity fees. While consumers have the private right of action, according to the Consumer Legal Remedies Act, Consumer Reports’ survey finds that just three in ten people who experienced a hidden charge fought it. California Attorney General Rob Bonta, who was instrumental in pushing for SB 478, asserts that California has implemented an “effective” piece of legislation aimed at addressing cost concealment for a product or service, positioning it as a significant legal ‘win’ for the state. SB 478 adds to the list of unfair and deceptive acts “Advertising, displaying, or offering a price for a good or service that does not include all mandatory fees or charges,” excluding government assessed taxes and fees. The law covers any business providing goods or services in the state of California, including vacation rentals, airlines, entertainment CALIFORNIA CLAMPDOWN ON HIDDEN FEES
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