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 pretax rate, and a “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 for rent 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 of listings 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 such as cleaning and service fees into the advertised nightly rate 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 advertise the total price of booking lodging throughout Europe, which means adding all mandatory fees into the 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 such as Airbnb.
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.
“The Hotel Advertising Transparency Act applies to all listings for short-term lodging; this means that short-term rentals like those found on websites like Airbnb and VRBO are subject to the same provisions in this bill that hotels and motels are,” Johnson said.
An Airbnb spokeswoman 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 spokeswoman 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 that don’t include the extra fees that are added once it’s time to book the stay.
“If I’m comparing prices of different places in a specific area, it’s very misleading because you don’t see all the extra fees like the cleaning fees until you go to reserve it,” said Jonah Lupton, who runs a Boston-based painting company. “Dozens of times I’ve gone to reserve a place only to see the cleaning fee and get annoyed because it’s ridiculously high.”
The cleaning fees are among the highest charges added to most short-term rentals. In some cases the fees can be nearly as much as the daily rate.
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.
Written by Hugo Martin for detroitnews.com.