Key facts
- The FTC is preparing to take action against Booking Holdings over online ads.
- Guest Reservations, an affiliate of Booking Holdings, allegedly charges extra fees for hotel rooms.
- The FTC is investigating if Guest Reservations violates rules against impersonating other businesses.
- The case could result in potential penalties exceeding $500 million.
- Guest Reservations has received over 1,000 consumer complaints to the Better Business Bureau.
- Booking supplies hotel room inventory to Guest Reservations through Priceline Partner Solutions.
The US Federal Trade Commission (FTC) is preparing to take action against Booking Holdings, the parent company of Priceline, concerning online advertisements that allegedly mislead consumers. According to sources familiar with the matter, these ads appear to direct users to hotel websites but instead route them to a third-party site, Guest Reservations, where they are often charged higher prices and additional fees.
The FTC has been scrutinizing Booking's relationship with Guest Reservations, which advertises hotel stays. The agency is considering whether Guest Reservations' websites violate rules against impersonating other businesses and other potential fee-related violations. One source indicated that the potential penalties in this case could exceed $500 million.
In August, Booking Holdings had disclosed that the FTC was contemplating legal action against Priceline and an affiliate regarding disclosures, fees, customer support, and billing practices, without specifying the affiliate or the exact issues. The company stated it was in discussions with the FTC to resolve the matter.
Guest Reservations has been the subject of over 1,000 consumer complaints filed with the Better Business Bureau. Many consumers reported believing they were booking directly with hotels and subsequently encountered surprise fees and poor customer service. Booking Holdings supplies hotel inventory to Guest Reservations via Priceline Partner Solutions, according to a lawsuit filed by the city of San Francisco.
FTC Chairman Andrew Ferguson confirmed the investigation in September, highlighting the agency's focus on issues that increase living costs for Americans, including misleading ads that lead to sites appearing to be run by hotels. He noted that consumers often do not realize they have been overcharged until after checkout.
Industry groups, such as the American Hotel and Lodging Association, have noted that third-party booking sites that misrepresent their affiliations or advertise misleading rates have been a long-standing problem. Hotel chains often encourage direct bookings to avoid intermediary fees, though aggregator sites remain a significant source of business. Representatives for Guest Reservations and Booking Holdings declined to comment.