Booking Holdings has taken a $1 billion accounting charge while negotiating a possible settlement with the US Federal Trade Commission over its Priceline unit's role supplying rooms to Guest Reservations, a booking site accused of intercepting travellers who had already picked their hotel and charging them far more than the official rate.
The scheme, as described in a lawsuit filed by the City of San Francisco, worked through search ads. Someone Googling 'palace hotel sf' on an iPhone would see a sponsored result for palacesanfrancisco.guestreservations.com sitting above the hotel's real Marriott page. The site was decked out with the property's photos and branding, with only a small, easy-to-miss note that it was 'an independent travel network'. Many travellers assumed they'd reached the hotel's own reservations desk.
The price gap was substantial. On July 1, San Francisco's suit compared rates for a July 8 stay at the Palace Hotel: a refundable king room was $419 booking direct with Marriott and $775 through Guest Reservations — an 85% markup for identical cancellation terms. Another room carried a 56% premium. A separate check found a two-night stay at the Westin Denver Airport costing $237 more through the intermediary.
Booking through the site also meant losing out on hotel loyalty points and elite perks, and customers reported difficulty getting money back once they realised what had happened. The problem wasn't hypothetical: a New York Times investigation documented an 85-year-old woman charged $16,559 — including $4,276 in taxes and fees — for a suite at Bologna's Grand Hotel Majestic when she'd requested a standard room for eight nights. When she disputed the charge with American Express, Priceline Partner Solutions, acting as merchant of record, fought to have it reinstated. Guest Reservations later refunded her.
Guest Reservations isn't owned by Priceline, but Priceline Partner Solutions was reportedly its exclusive hotel inventory supplier, providing the room stock, booking technology and payment processing in exchange for revenue on completed bookings. The company says it clearly identifies itself as independent, complies with Google's ad rules and discloses fees before purchase, and points out that fewer than 0.09% of transactions drew complaints. Priceline argues the lawsuit lacks merit.
Booking Holdings' quarterly filing shows the charge split into a $900 million revenue reduction and a $100 million general and administrative loss — and the company warns the FTC could seek more. A settlement would likely involve payments to the agency, refunds to US consumers and changes to Priceline's practices, with civil penalties of up to $53,088 per qualifying violation on the table.
The practical lesson for travellers is simple regardless of how the legal fight ends: before entering payment details, check the URL in full. Search results are crowded with third-party sites designed to look like official hotel pages, and the difference can be hundreds of dollars a night, plus forfeited points and a much harder time changing plans. If a rate looks steep, go to the hotel brand's own site or call the property directly.
Story via View from the Wing
