Priceline's parent company Booking Holdings recorded a $1 billion accounting charge while negotiating a potential Federal Trade Commission settlement over Guest Reservations, a Priceline partner accused of deceiving hotel customers into overpaying.
Guest Reservations advertised rates up to 85% higher than booking directly with hotels. A refundable room at San Francisco's Palace Hotel cost $419 on Marriott's website but $775 through Guest Reservations for the same cancellation terms. At Denver's Westin Airport, a two-night stay ran $237 more through Guest Reservations than direct booking.
The booking site allegedly misled customers into believing they were booking directly with hotels. Google searches for "palace hotel sf" displayed palacesanfrancisco.guestreservations.com above Marriott's official site. The Guest Reservations page showed hotel photos and a disclaimer stating "An independent travel network" that San Francisco's lawsuit claims was easy to miss and ambiguous. The domain name "Guest Reservations" itself suggested an official hotel department.
In one case documented by the New York Times, an 85-year-old woman searching for Bologna's Grand Hotel Majestic was charged $16,559 for a suite, including $4,276 in taxes and fees, when she requested a standard room for eight nights. Priceline Partner Solutions, the merchant of record, initially resisted a chargeback dispute before Guest Reservations eventually issued a refund.
Customers also reported difficulty obtaining refunds after discovering the intermediary. Booking through the third party cost travelers hotel loyalty points and elite benefits.
Priceline Partner Solutions supplied Guest Reservations with hotel inventory, booking technology, and payment processing while earning revenue from completed reservations, though Guest Reservations is not owned or operated by Priceline. Booking also owns BookOnline.com, which San Francisco's lawsuit targets.
Priceline told the New York Times that fewer than 0.09% of Guest Reservations transactions generated complaints and that it takes action when violations are identified.
The FTC's settlement with Booking Holdings remains under negotiation. Any agreement would likely include payments to the agency, refunds to U.S. consumers, and changes to Priceline's practices.