You search for a hotel, click what looks like its reservation page and book a room. Then you find out you went through a middleman that charged hundreds of dollars more per night.
That is the deception alleged against Guest Reservations, a Priceline partner whose advertised rate could be up to 85% higher than booking directly, according to View from the Wing. Priceline’s parent company has now recorded a $1 billion accounting charge tied to a possible settlement with the Federal Trade Commission.
$419 On Marriott’s Website, $775 From Guest Reservations For The Same Cancellation Deadline
The clearest example comes from San Francisco’s Palace Hotel. A refundable room cost $419 on Marriott’s own website, while Guest Reservations wanted $775 for a comparable room with the same cancellation deadline.
That is a gap of $356 for one room. The city of San Francisco is suing, and its lawsuit says the booking site was designed to make travelers think they were dealing with the hotel directly.
The city compared prices within minutes of each other on July 1 for a July 8 stay. Those were Marriott’s public nonmember rates, including taxes.
The Top Sponsored Result Sat Above The Hotel’s Own Website
The suit includes a Google search for “palace hotel sf” on an iPhone. The top sponsored result displayed palacesanfrancisco.guestreservations.com, above Marriott’s own hotel website.
Clicking led to a page devoted to the Palace Hotel. The city says the small words “An independent travel network” on the site were easy to miss and ambiguous.
The name itself does a lot of the work, the writer at View from the Wing points out. “Guest reservations” sounds like a department of the hotel you are trying to book, and with the property’s name in front and hotel photos on the page, a traveler can easily think they have reached the front desk.
A separate investigation found a two-night stay at the Westin Denver Airport cost $237 more through Guest Reservations than booking the same stay directly.
Guest Reservations Says It “Clearly Identifies Itself As An Independent Platform”
Guest Reservations tells a different story. The company says it clearly identifies itself as an independent platform, follows Google’s advertising rules, and discloses its taxes and service fees before purchase.
Customers, however, describe trouble getting refunds after discovering who they had booked with. Booking through a third party also means giving up hotel points and elite benefits, along with the ability to deal directly with the property when plans change.
Guest Reservations is not owned or operated by Priceline. Priceline Partner Solutions was reportedly its exclusive hotel inventory supplier, furnishing the hotel information, booking technology and payment processing, and earning revenue from completed reservations.
The Company With The Rooms Is Accused Of Knowing How The Sites Found Customers
The city’s case also targets BookOnline.com. It alleges that Booking, the parent of Priceline and Booking.com, knew how the sites were acquiring customers and kept helping them sell rooms.
The intercept method it describes is simple. Guests who had already chosen a hotel were met by a page that made them think they had reached the hotel’s own site, and then they were charged more.
Booking responded that it takes consumer protection seriously and believes the lawsuit lacks merit.
An 85-Year-Old Woman Was Charged $16,559 For A Suite
One example of Priceline’s involvement comes from Seth Kugel’s New York Times investigation. An 85-year-old woman searching for Bologna’s Grand Hotel Majestic reached Guest Reservations and asked for an eight night standard room stay.
She was charged $16,559 for a suite, including $4,276 in taxes and fees.
When she disputed the charge with American Express, Priceline Partner Solutions was the merchant of record and successfully sought to have the charge reinstated. Guest Reservations later told the paper it had issued her a refund.
Priceline told the Times that fewer than 0.09% of Guest Reservations transactions generated complaints, that partners must comply with laws and contractual obligations, and that it takes action when it identifies violations.
The View from the Wing writer argues that a low complaint rate understates how many people were misled, since many consumers never complain or blame the hotel instead.
It Is A $1 Billion Accounting Charge, Not A Fine
The $1 billion is an accounting charge, not a fine. Booking Holdings, which also owns Booking.com, took the charge in its latest quarterly filing while negotiating a possible settlement with the FTC over its involvement.
The potential penalties and consumer refunds are still being negotiated. Booking says the FTC could seek even more.
A negotiated agreement would likely include payments to the agency, money back to U.S. consumers and changes to Priceline’s practices. There are also civil penalties for qualifying rule violations, with a current ceiling of $53,088 per violation.
The FTC’s business impersonation rule covers falsely posing as another company or misrepresenting an affiliation, including by implication. The writer notes the government likely needs to show Priceline knew about the deception and took part in it or had authority to control it, and that Priceline can argue it only supplied rooms as ordinary distribution.
How To Make Sure You Are Booking With The Hotel
You do not need a legal degree to protect your wallet. A few habits can keep a hotel booking from turning into a costly lesson.
- Skip the sponsored ads at the top of search results and type the hotel chain’s web address yourself, or call the hotel directly.
- Look closely at the page for small print such as “independent travel network” before entering a card number.
- Compare the total price, taxes included, against the hotel’s own site before you pay.
- Remember that third-party bookings can mean losing hotel points and elite benefits.
- If you are charged more than you expected, contact your card company and the seller promptly and keep screenshots.
A hotel’s real website is usually a click or a phone call away. Spending two minutes to confirm it could save you hundreds of dollars on your next trip.
