PORTLAND, Ore. — Airbnb is looking at a new way of listing nightly rates for rental properties after customers complained about extra, poorly disclosed fees.
“We've heard from guests that it can be confusing when the price of a listing changes,” explained Airbnb spokesman Tim Rathschmidt.
Airbnb is testing a new way of displaying rental prices in various markets. During the test, when a customer enters their dates and number of guests, they’ll see the full nightly rate, including cleaning and service fees.
The change is intended to help prospective customers see the full price and accurately compare properties.
“This test is an important step toward bringing more consistency and transparency to price displays across Airbnb,” said Rathschmidt.
Consumer advocates complain Airbnb, Vrbo and other short-term rental platforms routinely charge cleaning fees, service fees and other extra costs that aren’t factored into the nightly rate. That means the prices displayed during an initial search don’t reflect the true cost of a stay.
“They’re showing you one price — $120 a night — but the true price is actually $180 a night,” explained Kevin Brasler, executive editor of Consumers’ Checkbook.
The nonprofit consumer organization looked at 600 property listings worldwide on Vrbo and Airbnb. Every listing had at least one hidden fee; often, there was more than one surcharge.
On average the fees increased prices by more than 25%, according to Consumers’ Checkbook research.
“It is very frustrating,” warned Brasler.
For example, a Portland-area apartment recently listed on Vrbo.com for $105 per night. But dig deeper you’d find it actually costs $320 for a one-night stay when the $65 cleaning fee, $5 laundry fee, $32 service fee and $39 lodging tax were added. Even more, there was a $75 “additional guest” fee for a family of five, despite the listing offering to sleep five people.
There was no disclosure or warning about additional fees for parties beyond two guests. The fee only displayed when you clicked through to book the property.
The property host did not respond for comment when contacted by KGW. The listing has since been removed from Vrbo.com. The company did not respond to two separate requests for comment for this story.
Several property owners and managers would like to see greater transparency in pricing.
“We have guests who are complaining,” explained Debi Hertert, founder of Host2Host, an association of homeowners who operate short-term rentals in Portland.
Hertert doesn’t think it would be hard for short-term rental platforms like Airbnb and Vrbo to add all mandatory fees into the nightly rate.
“I mean these computers can do so much,” explained Herter. “Why can’t they tell us exactly what is going on?”
Cleaning fees are among the highest charges added to most short-term rental properties.
KGW analyzed 4,700 Airbnb listings in Portland provided by Inside Airbnb, a website not affiliate with Airbnb that collects and shares data from the booking site.
The data showed 88% of the vacation rentals in Portland had cleaning fees, ranging from $5 to $650.
The average cleaning fee for an Airbnb rental in Portland was $66.
The cleaning fee was equal to or higher than the nightly rate in 10% of the listings in Portland.
It is important to keep in mind, cleaning fees are almost always charged only once per stay, so costs are higher for guests who book for one night versus those who stay a full week or month, explained property managers.
Additionally, the cleaning costs tend to be higher for larger properties.
“I manage everything from studios where the cleaning fee is $40 all the way to nine bedroom homes where the cleaning fee can be $400 and it takes two cleaners all day to clean the house,” explained Ryan Tigner, who manages dozens of short-term rental properties in the Portland-area.
Tigner believes most property owners are charging reasonable rates for cleaning.
“We are paying them (the cleaners) a living wage and need to be fair,” explained Tigner.
Hotels and airlines have come under fire for the exact same thing: nickel and diming travelers for unexpected fees.
In 2011, consumer outrage prompted the U.S. Department of Transportation to implement a rule requiring airlines to including mandatory taxes and fees in the advertised price of a plane ticket.
A bill titled the Hotel Advertising Transparency Act, introduced in the U.S. House of Representatives, would require hotels to add all mandatory fees into the nightly rate. Under the proposed legislation, the same rule would also apply to online booking platforms like Airbnb and Vrbo.
“Consumers deserve full transparency when making their travel plans,” said Rep. Eddie Bernice Johnson (D-Texas) on the House floor after introducing the bill in September.
Airbnb said it will provide updates on the changes to how nightly prices are displayed in the coming months. Currently, taxes are not included in nightly prices, although taxes are highlighted in the price breakdown and reflected in the total price of the stay.
It’s not clear which markets are being tested for this new way of listing nightly rates on Airbnb.
Some regions, including the European Union, Switzerland, Australia, Canada, South Korea and China already require the online booking platform to add all mandatory taxes and fees into the nightly rate. In those markets, changes will not apply.
In the meantime, a consumer advocate suggests guests research each property closely before booking a vacation rental.
“If you’re going to book on Vrbo or Airbnb I’d say, be ready to do some math,” said Brasler of Consumers’ Checkbook. “You might be a couple clicks away from really finding out what your true costs are going to be.”