NASHVILLE, Tennessee — Hotel pricing transparency from California is already changing how hoteliers present their rates nationwide, but those who haven't adjusted to the new regulations will soon have to as the California law is expected to soon go into effect across the U.S.
That's the prediction from Troy Flanagan, executive vice president of external government affairs and industry relations at the American Hotel & Lodging Association.
During the "HDC Insights: What Hidden Fee Legislation Means for You" session at the 2024 Hotel Data Conference, Flanagan said his organization has been pushing Congress to adopt a national model similar to what passed in California for the sake of consistency.
"In a situation like this where you've got consumers across political boundaries booking hotels or considering booking through the internet, this is an event where the solution should be a federal solution," he said. "We've been pushing on that for several years, and we're getting pretty close."
Under the California model passed into law via two separate bills in late 2023, as of July 1 hoteliers are required to include all required costs in their rates when advertised, as opposed to presenting a base rate then showing a list of fees attached to it underneath at booking or check-in. The rules also apply to how hotels present prices at restaurants and in-room food and beverage, but are not applicable to stand-alone restaurants.
"If I'm a California consumer, I need to, at every opportunity, see the full, mandatory price that I'm going to pay," Flanagan said. "That's exclusive of some things like government taxes and business improvement district fees, and things that are optional like parking or using the spa, but the things that you have to pay to use that room for the night must be disclosed."
One of the goals of a more wide-scale pricing transparency law is that it not only applies to hotels but "it should apply to the entire lodging ecosystem," including short-term rentals and third parties such as online travel agencies.
The regulation applies to not just hotels in California but hotels where Californians are likely to shop rates and stay. Potential penalties include fines of $10,000 per violation and potential litigation by consumers.
Flanagan added since the rules are still so new, there are still some gray areas on what may or may not apply, and hoteliers are urged to seek legal counsel for more comprehensive advice.
Part of the reason AHLA has put a focus on federal legislation is there have been various state-level solutions that have risen up in recent years, all with different rules that would complicate the regulatory landscape for hotels, Flanagan said. There was also belief that a nationwide regulation was inevitable given the increased focus on eliminating "junk fees" for consumers.
ALHA's efforts to standardize the rules have already made their way through the House of Representatives but were held up in the Senate by Kentucky Sen. Rand Paul.
Paul's opposition "was very principled," Flanagan said. "It's not just something against our industry. He doesn't understand why an industry would ask for more regulation, period."
Flanagan said the most likely scenario now is the national version of the pricing transparency rules would pass after the elections but before the end of the year, during the so-called lame duck session when most appropriation bills move through Congress.
"We have a pretty good chance of getting it tacked onto a spending bill and then sent to the President some time before the end of the year," he said.