Published on:

Hotel Lawyer: California’s AB 537 mandates transparent pricing for all short-term lodging as of July 1, 2024 — $10,000 penalty for violation

17 June 2024

See how JMBM’s Global Hospitality Group® can help you.
Click here for the latest articles on Junk Fee Litigation.

Note: If you are a consumer with a Junk Fee issue, please do NOT contact us! We do not represent consumers. We represent owners, developers, lenders, and management of hotels, restaurants, and other hospitality-related properties. We advise them on litigation, labor, regulatory compliance, contracts, transactions, financing, development, and strategies.

As of July 2, 1024, California’s Business and Professions Code is amended to impose a civil penalty of up to $10,000 for each knowing violation of strict transparent pricing standards for short-term lodging.

AB 537 applies to any hotel, residence or other place offering short-term” lodging (for 30 days or less), as well as any person or entity advertising a short term lodging price in California or from California (such as an internet site or platform).

The new law will be enforced by city, county and state legal officers. There is not private right of action under this statute.

AB 537 requires transparent pricing for all short-term lodging
Effective July 1, 2024


Mark S. Adams
Hotel Dispute Lawyer, Partner & Senior Member
JMBM’s Global Hospitality Group

AB 537, the California Resort Fee Law is misnamed. It should be the “Transparent Pricing for Short-Term Lodging Law”

Assembly Bill 537 (AB 537) was signed into law by Governor Gavin Newsom on October 13, 2023. It becomes effective on July 1, 2024, and adds a new Section 17568.6 to the California Business and Professions Code applicable to all advertising for short-term lodging.

The bill was originally nicknamed the “California Resort Fee Law,” but it applies to so much more than just “resort fees.” It applies to any advertising of a rate or charge for short-term lodging (hotel, motel, residence or other place for 30 days or less) in this state or from this state

What activity is covered?

The amended B&P Code section applies to all advertising (in this state or from this state) for short-term lodging.

What is short-term lodging?

Short-term lodging is defined to include hotels, motels, bed and breakfast inns, or other transient lodging.

It also includes any residential property advertised on a centralized platform and rented to a visitor for 30 consecutive days or less.

Who is covered?

The law applies to all of the following:

  • Place of short-term lodging
  • Internet website, application, or other similar centralized platform — such as a brand website, Airbnb, Expedia, Travelocity,,, or other travel booking platforms
  • Any other person

What 2 things are required or prohibited to avoid violation?

There are two prongs or tests for transparency in short-term lodging under AB 537. It is a violation if a covered person does either of the following:

  1. Advertises a rate for the lodging, which does not include all mandatory fees, except taxes and government charges. (no drip pricing at any time)
  2. Takes a reservation from a consumer before disclosing the “total price” of the lodging with all taxes and government charges included.

AB 537 is the only legislation we know of that requires disclosure of all taxes and government charges before taking a reservation from a guest.

Who can enforce AB 537?

The new transparency in advertising short-term lodging rates can be enforced by

  • City Attorney
  • County Counsel or DA
  • State Attorney General

Unlike many Junk Fee laws or proposals, AB 537 does not provide consumers with a private right of action to sue directly.

What is the civil penalty?

Any person who knew or should have known that it has advertised, displayed, or offered a room rate in violation of B&P Code Section 17568.6 is subject to a civil penalty not exceeding ten thousand dollars ($10,000) for each violation.

We expect that city, county, and State enforcement officers will send each violator a written notice of apparent violation so that when enforcement starts, there will be no question as to the “knowing” violation.

Impact on Short-Term Lodging

Under AB 537, “short-term lodging” refers to temporary accommodations rented to visitors for a brief period, typically less than 30 consecutive days. This category includes various lodging options such as hotels, motels, bed and breakfast inns, and similar transient lodging establishments.

Additionally, it encompasses short-term rentals of residential properties, which are often facilitated through online platforms like Airbnb, VRBO, and similar websites or applications. AB 537’s definition is broad to cover different types of accommodations that are rented out for temporary stays. This ensures that all forms of short-term lodging are subject to the same transparency requirements regarding the inclusion of all mandatory taxes and fees in advertised room rates.

Part of a greater consumer and regulatory backlash

The push for greater transparency in pricing, as embodied by AB 537, is part of a larger effort to protect consumers from misleading advertising and hidden costs, such as SB 478 (known as the “Truth in Advertising Act”), HR 6543 (known as the “No Hidden FEES Act of 2023”), and a new proposed FTC rule (known as the “Trade Regulation Rule on Unfair or Deceptive Fees”).

If enacted, one or more of the federal bills, such as HR 6543, would preempt state laws on the same issue, at least to the extent the state bill is more lenient on its requirements.

Click here to read the bill text for CA AB537.



Mark S. Adams, Hotel Dispute Lawyer, is an experienced trial lawyer and a senior member of JMBM’s Global Hospitality Group®. A primary focus of Mark’s practice is devoted to representing clients on hundreds of matters involving Hospitality Litigation, Arbitration & Dispute Resolution – from avoiding litigation to conducting complex, multi-state litigation, arbitration, and mediation.

Mark’s expertise is in business litigation involving contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in various commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and domestic and international arbitrations and is a frequent author and speaker on trial practice. Forbes, Reuters, and other publications have covered Mark’s trial wins. He obtained two of California’s 50 largest jury verdicts in the same year.

Mark has taken or defended nearly 1,000 depositions throughout North America, Europe, and the Middle East. The Wall Street Journal has quoted him as an expert on noncompete agreements. For more information, contact Mark at 949.623.7230 or

For more recent articles written by Mark S. Adams, please see the following links:

Junk Fee Law: Exception for California restaurants moves forward

California’s AB 537 mandates transparent pricing for all short-term lodging as of July 1, 2024 — $10,000 penalty for violation

New Federal Junk Fee Law – The No Hidden FEES Act of 2023 (HR 6543)

Jim Butler asks Mark S. Adams for update on California Junk Fee law: Would SB 1524 gut SB 478’s honest pricing for all?

Pricing transparency without hidden mandatory junk fees. Does this apply to restaurants too? New California proposed law (SB 1524 ) says “No!” Can this be right?

FTC’s proposed rule will end drip pricing and junk fees for hotels, restaurants, and many other businesses. Goodbye to resort fees, destination fees, service charges and other miscellaneous fees?

California bans Junk Fees as of July 1, 2024. Good bye to junk fees, resort fees, mandatory service charges, and drip pricing. Hello to – the fruits of SB 478.

Disclosing Mandatory Resort Fees – What Hoteliers Need to Know

Why Judicial Reference is better than Arbitration for resolving Hotel Management Agreements & Hotel Franchise Agreements. Advanced Analysis of Judicial Reference features.

The better way to resolve hotel contract disputes: Judicial Reference or Arbitration? 

What’s best for hospitality contract dispute clauses? Arbitration, court litigation, or judicial reference in hotel management and franchise agreements?

Should New York law govern your hospitality contract? How about Texas, California or Florida law?

Meet Mark S. Adams, Hotel Dispute Lawyer – Hospitality Litigation, Arbitration & Dispute Resolution

How Pennsylvania Resort Fees Settlements Could Play Out for US Hotel Industry

Force Majeure – Contract provisions and governing law are important

History & origins of Force Majeure as a contract defense

JMBM’s Global Hospitality Group® announces 5th edition of The HMA & Franchise Agreement Handbook

Hotel Lawyer on HMAs: “The shrinking terms of hotel management agreements”

Losing the expectation of privacy bit by bit, byte by byte

Picture of Jim Butler

This is Jim Butler, author of and founding partner of JMBM and JMBM’s Global Hospitality Group®. We provide business and legal advice to hotel owners, developers, independent operators, and investors. This advice covers critical hotel issues such as hotel purchase, sale, development, financing, franchise, management, ADA, and IP matters. We also have compelling experience in hotel litigation, union avoidance and union negotiations, and cybersecurity & data privacy.

JMBM’s Global Hospitality Group® has been involved in more than $125 billion of hotel transactions and more than 4,700 hotel properties located around the globe. Contact me at +1-310-201-3526 or to discuss how we can help.

How can we help? Brochure Credentials Photo Gallery

Contact Information