California’s latest consumer protection legislation is here – if your adventure tourism business operates in the state, it’s crucial to understand how it might impact you.
Signed into law in October 2024, California’s new drip pricing law is designed to protect consumers from hidden fees and surprise charges at checkout.
This law directly affects how businesses, including those in the adventure tourism industry, present prices to customers.
This blog will unpack what the new legislation entails, why it matters, and how you can adapt to stay compliant while maintaining customer trust.
What Is Drip Pricing?
Drip pricing is a practice where businesses advertise a base price but add mandatory fees or charges during the checkout process. These fees often catch consumers off guard and can lead to frustration or lost trust.
Common examples include:
- Service fees
- Processing fees
- Mandatory equipment rental charges that aren’t disclosed upfront.
For adventure tourism operators, this might look like advertising a $100 guided rafting tour, only to tack on additional fees for safety gear or insurance at checkout.
What Does the New Law Require?
Effective July 1, 2025, businesses in California must disclose the full price of goods and services upfront. This means that all mandatory fees must be included in the initially advertised price. The law applies to:
- Online pricing: Websites, booking platforms, and mobile apps.
- In-person pricing: Flyers, posters, and verbal quotes.
- Third-party platforms: If you list your services on platforms like Groupon, FareHarbor, or TripAdvisor, you must ensure compliance there too.
Optional add-ons, like upgrades or premium services, can still be listed separately, as long as they are genuinely optional and clearly marked as such.
Why Was the Law Introduced?
California’s Attorney General noted that “drip pricing misleads consumers, hinders comparison shopping, and creates an uneven playing field“. Customers often feel duped when they see a final price far higher than what was initially advertised.
In tourism, transparency is especially critical. Travelers want to plan their trips with confidence and don’t appreciate feeling “nickel-and-dimed.” This law aims to restore fairness and trust in pricing practices.
How Will It Impact Adventure Tourism Businesses?
1. Changes in Price Presentation
You’ll need to advertise all-inclusive pricing. For example:
- Old Format: “Scenic Zipline Tour – $75* (*plus gear rental and processing fees).”
- New Format: “Scenic Zipline Tour – $95 (includes gear rental and processing fees).”
While it might seem like your advertised prices are increasing, this transparency can actually enhance your credibility.
2. Adjustments to Booking Processes
Your reservation and payment systems must reflect the new law. Ensure your website or app displays the full price at the start of the booking process, not just at the final step.
If you use a third-party booking system, coordinate with your provider to update pricing displays. They may already have tools or updates to assist with compliance.
3. Customer Communication
Be proactive in communicating pricing changes to customers. For instance:
- Use your email list to inform repeat customers about new all-inclusive pricing.
- Update FAQs on your website to clarify what’s included in the price.
4. Competitive Considerations
While the law only applies to California-based businesses, it may set expectations for travelers coming from other states or countries.
Highlighting “no hidden fees” in your marketing can differentiate your business and appeal to customers nationwide.
Penalties for Non-Compliance
Non-compliance with the law can result in fines and potential lawsuits.
The penalties may vary based on the nature and frequency of violations. It’s always best to consult legal counsel to ensure your business is fully compliant.
Tips for Transitioning to Transparent Pricing
1. Audit Your Pricing Structure
Review your pricing strategy to identify all mandatory fees. Incorporate these into your advertised prices.
2. Train Your Team
Make sure your staff understands the new requirements, especially if they handle customer inquiries or sales. Consistent messaging across all touchpoints is critical.
3. Update Your Marketing Materials
From your website to social media ads, ensure all promotional materials reflect all-inclusive pricing.
4. Test Your Booking Systems
Conduct a thorough review of your online booking process to identify and resolve any discrepancies in pricing displays.
What’s the Upside?
While compliance requires effort, there are benefits:
- Increased Trust: Transparent pricing builds customer loyalty.
- Reduced Cart Abandonment: Customers are less likely to abandon bookings if they know the total cost upfront.
- Competitive Edge: Being upfront about pricing can set you apart from competitors who aren’t yet transparent.
Looking Ahead
Drip pricing laws in California may signal a broader trend across the U.S. If your adventure tourism business operates in multiple states, it’s worth considering adopting transparent pricing universally to stay ahead of potential regulatory changes.
By aligning with the new law, you’re not just avoiding penalties—you’re creating a better experience for your customers. When your guests feel they can trust you, they’re more likely to return, recommend, and leave positive reviews.
Final Thoughts
California’s drip pricing law marks a shift toward fairness and transparency in the tourism industry. For adventure tourism operators, compliance is not just a legal obligation but an opportunity to build stronger relationships with your customers.
Take the time now to adapt your pricing strategy and processes. The effort you invest today will pay off in customer satisfaction and long-term success.
If you’d like more guidance on implementing these changes or have questions about your specific business setup, feel free to reach out to us at Wherewolf—your partner in adventure tourism success.