Understanding Hotel Fee Transparency Legislation & Its Impact To Online Reservations

By Kevin Hibbs, Senior Director, Product Management, Agilysys.

California has recently introduced Senate Bill 537, which requires hoteliers to display all fees required to stay at the property. This primarily applies to resort fees although it can apply to any other mandatory fees not included in the room rate. For more information you can read the law here.

Impact On Operations 

This new California law is going to change how hoteliers choose to market and display rooms and rates on various channels. The possible long-term impacts of this law on marketing and pricing strategies are still unknown, but it is likely to become a significant factor in conversations moving forward.  

The Future 

This California law will undoubtedly serve as a template for other states in the future. Even Congress has introduced the “Hotel Fees Transparency Act” to ensure that mandatory fees are disclosed to guests while booking. While Congress has not yet passed the new act, the California law goes into effect July 1, 2024.  

Agilysys Book 

Agilysys Book allows you to control how you want to display rates to your guests. Rates can be shown as an average room rate with the resort fee price prominently displayed. Or you can choose to have the resort fee included in the displayed room price.  
When choosing to show the resort fee as a separate line item, that fee is shown throughout the booking process and it is shown as part of the grand total when the guest is completing their booking.  

Do you waive resort fees for your high tier guests, or for complimentary nights? With the multitude of configurable options available in Agilysys PMS & Agilysys Book, you can automatically wave resort fees for specific guests.  

In all cases you have the option to create a custom popup that can detail all the amenities the resort fee unlocks for a guest.  

All the options do not impact how your PMS will post the resort fee. 

• Display Room Rates Plus Resort Fee Message. Here the Room rate is displayed, and the resort fees are shown as a separate line item. 
• With this configurable verbiage you can also create a custom popup box that highlights what the resort fee includes.
• With this option the resort fee and related taxes are shown prominently in the rate breakdown of each room type.
• In the booking summary page, right before the guest enters their name and payment details, we again show the rate breakdown including resort fees.
• Even on the confirmation page, room and resort fee and related taxes are clearly shown.
• If you choose to have Agilysys Book include the resort fee in the room price, you can still include a message explaining that the price already includes the resort fee.
• This still provides the option of a popup to describe what the guest is getting with the resort fee.
• In the booking summary, prior to the guest providing their contact and billing details; we don’t separate it because we include it in the room and tax totals.
• Then finally on the confirmation page we show the total room rate as inclusive of the resort fee. But it will still post separately in the Agilysys PMS.

In conclusion, the introduction of Senate Bill 537 in California marks a significant shift towards greater fee transparency in the hospitality industry. This legislation mandates that all mandatory fees, including resort fees, be prominently displayed at the time of booking, ensuring guests are fully informed of their total stay costs. While the long-term effects on marketing and pricing strategies are still uncertain, this move sets a precedent that could inspire similar laws across other states and even at the federal level. For hoteliers, tools like Agilysys Book offer versatile solutions to comply with these regulations, enabling customizable display options for fees to enhance guest transparency and trust. As the industry adapts to these changes, maintaining clarity in fee presentation will be crucial in fostering positive guest experiences and operational efficiency.