Key Details:
In 2019, European regulators told Airbnb it had to show all fees upfront for EU users. More recently in the U.S., the Federal Trade Commission (FTC) has been cracking down on “junk fees,” and Congress just passed the Hotel Fees Transparency Act of 2025.
This worldwide move toward transparency gave researchers at UNLV's Lee Business School a chance to study how showing the full price up front - including cleaning fees - affects both hosts and guests on Airbnb.
The Study
Airbnb rolled out the new pricing policy in Europe in January 2019. From that point on, guests in the EU saw the full price before booking—including cleaning and service fees. Meanwhile, in places like the U.S., those fees were still hidden until the final step.
To study the effects, researchers focused on London, which has more Airbnb listings than any other European city.
Key Findings
1. Cleaning Fees Dropped a Bit
Listings hit hardest by the policy cut their cleaning fees by around 2–4%. With guests now seeing the total price upfront, there was less incentive to sneak costs into the cleaning fee.
2. Nightly Prices Went Up for Listings Without Cleaning Fees
About 27% of London listings didn’t charge a cleaning fee at all. After the change, those hosts raised their nightly rates by 5–6%. Why? Because they finally saw that their total prices were lower than competitors, giving them room to charge more.
3. Hosts Learned from Looking at Competitors
Before the change, it was tough for hosts to figure out what their competitors were really charging without clicking into every listing. With the full prices now out in the open, hosts could easily compare apples to apples. Many realized they’d been underpricing—or overpricing—and updated accordingly.
4. Mixed Results Overall
Cleaning fees dropped slightly, but nightly rates went up even more—especially for listings that looked like a better deal once total prices were shown. But here’s the twist: higher prices led to fewer bookings and shorter stays. So even though some hosts charged more per night, they actually made less money overall.
5. NYC as a Comparison Point
The researchers used New York City as a control group, since it wasn’t affected by the policy change. After the EU rule kicked in, London saw bigger drops in cleaning fees and bigger jumps in nightly prices compared to NYC. That adds confidence that the policy—not some unrelated trend—drove the changes.
Our Take
What this means for Hosts
What’s most interesting is that price transparency didn’t just affect guests—it reshaped how hosts set their prices too.
- Hosts with cleaning fees lowered them slightly—but often raised nightly rates to compensate.
- Hosts without cleaning fees realized they were underpriced and bumped up their prices.
In some cases, hosts may have overcorrected. According to the study, more affordable listings saw a drop of about $307 per month in revenue. Why? Even though nightly rates went up—higher prices led to guests booking shorter stays
What this means for Guests
Seeing the full cost upfront is a win. It makes shopping for a place more fair and less frustrating. But some of those gains were canceled out by higher base prices.
What this means for Policymakers
The lesson here: transparency has both good and bad sides.
- Good: Fewer hidden fees and easier price comparisons for consumers.
- Bad: Hosts respond by adjusting prices—sometimes pushing costs even higher.
Lesson: policymakers should think about both sides of the market. In marketplaces like Airbnb, rules meant to help consumers can accidentally hurt the cheapest options—and the hosts who offer them.
Platforms and regulators should ask: Are we making pricing clearer and keeping costs fair, or just shifting how prices are structured?
The Bottom Line
Airbnb’s EU policy led to a small drop in cleaning fees and a noticeable jump in nightly rates for listings without extra fees. This happened because hosts without cleaning fees realized they were underpriced once total prices were visible and raised nightly rates.
However, this change meant fewer bookings and less money for some hosts, showing the tricky balance between the benefits of transparency and its wider effects on the market.
Transparent pricing is spreading fast. If it hasn’t reached your area yet, odds are it will soon.
Hosts, take note: Don’t overreact to transparency. Raising prices might seem like a win—but if bookings drop, you could lose more than you gain.
