Juan Herrera, a graduate student from San Diego, was searching the Airbnb booking site for a place to rent in Los Angeles for New Year’s Eve when he was surprised to see that several extra fees were added to the nightly rate, pushing the total cost of the trip out of his price range.
In addition to the nightly rates of $100 to $120 for a private room, nearly every place he considered renting charged a “service fee” of about 13% of the pre-tax rate and a one-time “cleaning fee” of about $45. It prompted him to instead book a comparably priced hotel room.
“I definitely felt surprised and preferred to book a regular hotel because I do not feel now that Airbnb is transparent with prices,” Herrera said.
Properties listed on Airbnb routinely charge cleaning and other fees, some substantial, but such extra costs seldom are factored into the nightly rate that turns up in the initial lodging search, according to an analysis by the Los Angeles Times.
Now, lawmakers and consumer groups are pressuring Airbnb, Vrbo, and other short-term rental platforms — as well as conventional hotels — to include all mandatory charges into advertised rates so that prospective customers can accurately compare prices.
The European Commission reached an agreement with Airbnb last year that requires the online booking platform to include all mandatory fees into the advertised nightly rate. A bill introduced in September in the U.S. House of Representatives would impose similar requirements for all short-term lodging in the United States, including hotels and home-sharing platforms.
Advertising the full rate “shouldn’t be hard to do,” said Anna Laitin, director of financial policy for Consumer Reports, which endorsed the legislation by Reps. Eddie Bernice Johnson (D., Texas) and Jeff Fortenberry (R., Neb.). “There are ways to do it and do it well.”
The bill, titled the Hotel Advertising Transparency Act, is awaiting a vote in the House Energy and Commerce Committee.
An Airbnb spokesperson said the booking site shows both the nightly rate, without fees, and the full price, but only after guests plug in the number of days they plan to rent lodging.
“We are fully committed to price transparency and display both a nightly price and a fee-inclusive total price in our search results,” Airbnb spokesperson Mattie Zazueta said. “We are always working to improve our customer experience and welcome the opportunity to work with lawmakers on this important topic.”
Home-sharing gained popularity primarily because such lodging, ranging from a single room to an entire house, was typically offered for a much lower rate than rooms at traditional hotels. But Airbnb customers have begun to complain on social media sites that short-term rental hosts have become increasingly misleading by advertising nightly rates without fees.
“Dozens of times I’ve gone to reserve a place only to see the cleaning fee and get annoyed because it’s ridiculously high,” said Jonah Lupton, who runs a Boston-based painting company.
Cleaning fees — in some cases nearly as much as the daily rate — are among the highest charges added to most short-term rentals.
Because cleaning fees are almost always charged only once per stay, the cleaning costs are a bigger hit for customers who book only one night than those who book for several days.
“Only after the consumers click on a specific listing, then they can see the price structures that show the breakdown of the total cost, including the expenses for the stay, cleaning fee, service fee, and occupancy taxes and fees,” said Linchi Kwok, an associate professor at the Collins College of Hospitality Management at California State Polytechnic University Pomona. “As a result, many people may not pay attention to how much they end up paying for the fees.”
That explains why a “penthouse resort” in downtown Los Angeles was advertised on Vrbo.com recently for $199 a night but actually costs $369 when the $95 cleaning fee, $34 service fee, and $41 lodging tax are added.
According to Airbnb, hosts who advertise a property on the booking platform must collect a standard service fee of about 13% of the total pre-taxed price, which pays for the operation of the Airbnb site. The Vrbo website says it charges a service fee that “may change from time to time.” Both platforms also collect a transient occupancy tax from renters in areas where such a tax is required.
But neither of the booking platforms regulates how much property hosts are allowed to charge for other costs or services, such as cleaning, parking, hosting a pet, or checking in early.
Airlines faced similar criticism about a decade ago when many air carriers advertised fares that did not include many fees, including to check luggage. The outcry prompted the U.S. Department of Transportation in 2011 to adopt a rule that required all airlines to include in the advertised price any mandatory fees, including taxes.