Skift Travel News Blog

California Governor Gavin Newsom signed into law on October 7 a bill to ban mandatory hidden fees — also called junk fees — starting July 1, 2024.

“The price Californians see will be the price they pay,” said Rob Bonta, the state attorney general.

As Skift previewed, the law broadly requires upfront disclosure of any mandatory fees by hotel companies, online travel agencies, car rental companies, online concert ticket sellers, and others.

If a company doesn’t comply, a consumer could seek “at least $1,000” in damages via the state’s existing consumer protection claims processes. (See the law, embedded below.)

Junk Fee Reform

It’s unclear how California’s new law will impact companies in mid-2024.

California has the largest population of any state in the U.S., and so some big companies choose to apply its requirements nationally.

Yet there could be lawsuits from industry groups, and corporations could find workarounds to keep profitable fees. California has rules on fees for car rentals, but many online travel agencies choose to display those fees in ways that vary depending on jurisdiction.

Another wrinkle: Newsom hasn’t yet taken a position on another bill awaiting his signature, Senate Bill 537. He has until Saturday night to decide whether to let that bill pass into law. The bill would prohibit businesses that sell lodging for up to 30 days in California from displaying a room rate that doesn’t include all fees or charges (except government-imposed taxes) as of July 1, 2024.

It’s possible the Governor may feel the bill he’s signed already covers this, making a law specific to hotels unnecessary. Either way, the state’s 6,000 hotels and thousands of short-term rentals are currently facing new rules about the display of so-called junk fees, such as resort fees and housekeeping fees. 

Here’s the legislation that’s just passed:

Telluride, Colorado, is lifting its moratorium on new short-term rental licenses and introducing a $857 annual per-bedroom regulatory fee for property owners who rent to vacationers. This move is aimed at boosting revenue for housing initiatives and alleviating housing shortages.

A recent study by Economic and Planning Systems in Telluride offered various per-bedroom regulatory fee options to help address the impacts of short-term rentals and support affordable housing. 

_{A Vrbo listing in Como, Colorado. Source: Vrbo}

One of the options included a 100% mitigation rate, charging $2,608 per short-term rental bedroom to generate $3.9 million for affordable housing, and a 20% mitigation rate, which would levy a $522 fee per bedroom, generating $778,000. The council chose a rate targeting about $1.5 million annually for affordable housing.

The Telluride council introduced three tiers of short-term rental licenses exempting residents who rent for under 29 days a year from the new per-bedroom regulatory fees, while “classic” license holders will pay the full fees.

Telluride now joins three other communities in adopting regulatory fees to fund affordable housing. Breckenridge charges $756 per bedroom. Pagosa Springs charges $500 a bedroom. 

The town is also mulling a ballot measure for 2024, seeking voter approval for an excise tax on vacation rental homes. Additionally, Colorado Governor Jared Polis is exploring legislation to categorize short-term rental properties under commercial lodging properties for tax purposes, arguing that they should be taxed at commercial rates rather than residential property tax rates.

The European Union is on track to ban marketing claims such as “climate neutral” by 2026 that scientifically based certification can’t validate.

Claims such as “carbon neutral,” “environmentally friendly,” and “eco” will require companies to verify their products’ merits through third-party certification schemes. 

Travel companies are among the industries that may be affected by the looming ban. For example, airlines may need to change booking interfaces that offer “climate-neutral” flights in exchange for buying carbon offsets supporting projects that lack credibility.

The rules okayed on Wednesday still need formal approval from the European Union parliament and its member states — expected in November. But it would be procedurally rare for the rules to be denied.

The move came on the same day United Nations Secretary-General Antonio Guterres said “humanity has opened the gates to hell” in its failure to stop rising carbon emissions and a forecasted increase in extreme weather.

During a press conference on Monday, President Joe Biden endorsed a new proposal from the U.S. Transportation Department that would make airlines disclose relevant fees early in a consumer’s shopping process. (See full document, below).

“You should know the full cost of your ticket right when you’re comparison shopping,” Biden said in brief remarks. He said that any “fees for things like sitting next to your child, checking your bag” should be made plain upfront.

The Transportation Department said airlines too often inform customers about fees either too far down in the booking process or after tickets have been purchased, “which is not sufficient disclosure.”

Airlines for America, a lobbying group, said carriers were already transparent about ticket fees.

Here’s the regulatory proposal:

Airbnb announced Friday that it selected Jay Carney, most recently head of corporate affairs at Amazon and a former White House press secretary with ties to President Joe Biden, to replace Chris Lehane as global head of policy and communications.

Lehane, known for his hardball tactics in running campaigns opposing tougher municipal and state regulation of Airbnb, left Airbnb months ago, and joined a crypto fund. Lehane has many political jobs on his resume, including serving as press secretary for then-Vice President Al Gore from 1994-2000.

Carney has ties to President Joe Biden, having served as his director of communications when Biden was vice president. A former journalist, Carney was White House press secretary under Obama from 2011-2014.

Carney, who will begin his role at Airbnb in September, will be part of Airbnb’s executive team and will “work with co-founder and CEO Brian Chesky to ensure that as Airbnb grows, we strengthen the communities we are in.”

In a statement, Chesky said Carney is adept at community engagement “and is committed to ensuring that Airbnb is a force for good.”

Airbnb’s impact on communities can be multifaceted. On the one hand, it generates revenue for local businesses, including hosts, and makes travel affordable for many who otherwise wouldn’t be able to vacation in such fashion.

On the regulatory front, Airbnb faces an outcry in many communities around the world that it is hurting the quality of life, and contributing to a housing crisis as long-term rental properties get taken off the market, and turned into short-term rentals for tourists.

“The potential for travel to promote economic and social good has never been greater,” Carney said of his Airbnb appointment in a statement. “I’m thrilled to be joining Airbnb to help guide its work to connect communities and people through travel, drive economic participation, and help us discover that while our differences are real, they are overwhelmed by our similarities.”

Carney is a board member of Urban Institute, which Airbnb said works on issues such as affordable housing, racism and healthcare matters.

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Citing a substantial increase in Airbnb listings, UK government agencies Wednesday issued an “open call for evidence” about the impact of short-term rentals, and floated remedies such as physical inspections of properties and a registration requirement.

The UK Department for Digital, Culture, Media & Sport, the Department for Levelling Up, Housing & Communities, as well as two MPs stated that the call for evidence would last 12 weeks. The announcement cited a 33 percent increase in Airbnb’s UK listings in the 2017-2018 period.

The aim is to improve the lives of people living in tourism destinations, and to understand the impact on housing, among other goals. the announcement said.

The announcement stated:

“The scheme, proposed in a new government review looking at the impact of increases in short-term and holiday lets in England, could involve physical checks of premises to ensure regulations in areas including health and safety, noise and anti-social behaviour are obeyed.

“Further measures the Government is considering include a registration ‘kitemark’ scheme with spot checks for compliance with rules on issues such as gas safety, a self-certification scheme for hosts to register with before they can operate, and better information or a single source of guidance setting out the legal requirements for providers.”

Reacting to the announcement, Merilee Karr, chair of the UK Short Term Accommodation Association and CEO of UnderTheDoormat, urged the government to distinguish between short-term rentals that hosts live in and those that are investment properties.

Karr said her association has previously called for a national registration plan as a precursor to collecting data and to develop any policies. She said short-term rentals “play a vital role in the English tourism economy, contributing to local jobs and businesses, providing a vital income stream for many individuals and families at this time of rising cost of living.”