HomeToGo’s Response to California’s Junk Fee Law: Show Total Price INCLUDING Taxes

HomeToGo, the short-term rental price comparison business, plans to go a couple of steps further than Airbnb to comply with the California junk fee law that kicks in July 1.

In an interview with Skift Thursday, HomeToGo co-founder and CEO Patrick Andrae said his company will show total prices, including fees and taxes. And it will do so throughout the U.S., not only in California.

He said this will be HomeToGo’s practice regardless of whether it is processing a vacation rental booking on its own channels on behalf of a partner or whether it is directing a guest to a third-party site to book.

Travel companies that do business in California need to comply the new state law, SB 478, which requires that all mandatory costs are displayed upfront, as opposed to later in the booking process. But they aren’t required to display taxes.

Airbnb, like many online retailers (with the exception of major cruise lines), plans to show the nightly rate and fees upfront by default in California, but excluding taxes. In the rest of the U.S., Airbnb users would continue to have the option to toggle to view nightly rates and fees, minus the taxes, or merely the nightly rates.

“We’re going a step further than Airbnb and offering a better travel search experience by including all mandatory fees and taxes in our display price, nationwide,” Andrae said.

Airbnb declined to comment.

HomeToGo Will Do What’s the Norm in the EU

Companies in Germany, where HomeToGo is based, and throughout the European Union, whether supermarkets or online travel agencies, have been required to show the total price upfront, including taxes, for years.

Andrae said it feels artificial not to show the total price.

“It’s the right way to do it from a transparency perspective on the customer side,” he said.

Ironically, when HomeToGo entered the U.S. market in 2015, it displayed the total price, including taxes and fees upfront, but later reverted to just showing the nightly rate, just as its competitors did.

Beta testing showing the total price in the U.S. is underway, and HomeToGo plans to launch the feature throughout the U.S. on July 1.

Displaying the Total Price Isn’t Overly Complex

Some rivals argue it is difficult to include taxes because they vary so widely by city, county and state.

“I don’t get that argument,” Andrae said, adding that retailers need to show the taxes when people are ready to book anyway. “Prices don’t change, it’s only where you display them.”

Risky Strategy for HomeToGo

Will users appreciate HomeToGo’s transparent approach or will they shop elsewhere when a competitor’s price appears lower because it doesn’t include fees and taxes?

“We need to see what the consequences will be in the end,” Andrae said. “Do people understand or do they not understand.”

HomeToGo plans to be aggressive in messaging on its platform that is showing the total price to help educate consumers, and perhaps benefit from a positive reaction.

Andrae said displaying total price, including taxes and fees, wouldn’t disadvantage HomeToGo in Google Search because the company doesn’t usually including pricing in AdWords.