SAN FRANCISCO (KCBS RADIO) – Thanks to Federal Trade Commission rule that’s kicking in a few weeks, people searching for short-term rentals on Airbnb should expect the site to look a bit different.
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Bloomberg’s Natalie Lung joined KCBS Radio news anchor Holly Quan this week to discuss the change.
“Airbnb announced it will, by default, show customers the total price of stays – including the cleaning fees and service fees in their search results,” Lung explained. So now whenever you see the price… whenever you browse a listing, it will show all [fees]; include all the cleaning, fees and services.”
Last December, the FTC announced that it had passed a rule prohibiting what it called “bait-and-switch pricing,” and other tactics on short term rental sites such as Airbnb and Vrbo. Lung said that rule will go into effect May 12.
She said that Vrbo, a short-term rental site owned by Expedia, already displays its fees. Airbnb has also done so in other countries with similar regulations since around 2019, but now U.S. customers will have the benefit of seeing them. While Airbnb is making the change a few weeks in advance of the FTC deadline, it would have had to comply by next month.
“When Airbnb sort of slowly introduced this concept of total price display using an optional display option in the last two years… hosts have lowered their cleaning fees – obviously because, you know, so that the total price won’t appear that expensive to customers,” said Lung. “So yeah, you might see hosts lowering or even removing their cleaning fees to remain competitive.”
She told Quan it isn’t exactly clear if Airbnb hosts were making money off cleaning fees or the other fees the FTC now requires the site to show.
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“That’s the difficult part because it’s an arbitrary one-off amount that hosts can set on top of the rental price,” Lung explained. “So, hopefully this would encourage them to keep it competitive and affordable.”
Even though hosts can still charge the fees, customers can now compare different listings and their fees to determine the deal they want. Therefore, hosts will have more incentive to set competitive prices. Lung added that the rule will also apply to hotels and live event ticket sites
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