Advertised Rate

The advertised rate is the headline nightly price guests first see, while the total cost is what they actually pay for the stay. Under Australian Consumer Law’s component pricing rules, accommodation providers must present a single upfront price that includes all mandatory charges such as cleaning, compulsory platform fees, taxes and levies—drip pricing is unlawful. For short-term rentals, this makes the total cost the key figure for compliance and for guest decision-making.

Major platforms in Australia increasingly surface the total price. Airbnb ranks and displays listings based on the all-in amount (including cleaning and service fees), and Booking.com shows a final price with mandatory charges before payment. With Victoria’s 7.5% Short Stay Levy commencing on 1 January 2025, the gap between a low nightly rate and the guest’s total will widen if not priced thoughtfully.

Definition and Purpose in STR

In short-term rentals, the advertised nightly rate is a marketing anchor, whereas the total cost reflects the real, payable price for the booking. The law requires that the single, prominent total include all unavoidable charges that can be quantified, ensuring guests are not misled by low base rates and late-added fees.

Platforms have aligned with this expectation: Airbnb and Booking.com itemise mandatory fees and show guests the full amount prior to payment. Listings that lean on low nightly prices and high add-ons tend to perform poorly in visibility and conversion because guests and algorithms prioritise transparent, all-in value.

How It Works in Practice

If you display a price, you must also display a single total that captures all mandatory components for the selected dates and party size—cleaning fees, compulsory platform or service fees, any applicable GST, and taxes or levies. The ACCC has named online drip pricing an enforcement priority for 2024–25, and NSW guidance echoes that unavoidable fees must not be added late and that “from” prices must be genuine.

Typically, search results show a nightly rate, then a final price appears once dates and guests are entered, with mandatory items clearly itemised before payment. Prices presented to consumers must be GST-inclusive where GST applies. If card surcharges are unavoidable, they must be included in the single price; they may be excluded only if a genuine fee-free payment option is available.

Platform Rules or Legal Requirements

Section 48 of the Australian Consumer Law requires a prominent single total price where the amounts are quantifiable, and prohibits drip pricing. Breaches can attract penalties up to the greater of $50 million, three times the benefit, or 30% of adjusted turnover. In 2023, the Federal Court ordered Airbnb to pay $15 million in penalties and $15 million in consumer compensation for misleading Australians with USD pricing, underscoring the need for clear, accurate AUD presentation.

Platform policies also require that all mandatory charges—like cleaning and service fees—are disclosed and charged on-platform. Adding compulsory fees after booking or requesting off-platform payments can lead to penalties, guest complaints, reduced search visibility, or listing removal.

Impact on Bookings or Revenue

Airbnb factors total price into search ranking, so higher all-in costs can reduce visibility and depress booking volume. Hidden or late-added fees not only risk significant penalties under the strengthened 2024 drip pricing reforms, they also prompt checkout abandonment and damage review scores—both harmful to conversion and revenue.

From 1 January 2025, Victoria’s 7.5% Short Stay Levy must be incorporated into the total price for eligible bookings. Owners who recalibrate nightly rates, cleaning fees and listing copy to reflect the all-in value can mitigate demand impacts and protect conversion as the gap between the headline rate and total grows.

Conclusion

The key to compliant, high-performing pricing is simple: present a single, upfront total that includes all mandatory fees, taxes and levies. This aligns with Australian Consumer Law, avoids drip pricing risks that can carry penalties up to $50 million per contravention, and supports better guest trust and platform ranking.

For Victorian listings, ensure the 7.5% short-stay accommodation levy is included in the total from 1 January 2025. Keep prices GST-inclusive where applicable and avoid late-added fees or off-platform charges to maintain compliance and conversion.

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