Booking Holdings Inc., which operates the website Booking.com, was sued by Texas for allegedly engaging in deceptive trade practices in citing hotel room prices.
(Bloomberg) — Booking Holdings Inc., which operates the website Booking.com, was sued by Texas for allegedly engaging in deceptive trade practices in citing hotel room prices.
The state claims in a lawsuit filed Thursday that the big travel reservations company leaves mandatory fees out of the prices it advertises, presenting falsely lower rates to prospective guests. Booking Holdings runs five other consumer-facing brands, according to the suit: Priceline, Kayak, Agoda, Rentalcars and Opentable.
“For years, Booking has duped unsuspecting Texans who shop for room rates on its various websites by omitting mandatory fees from the advertised room rate,” Texas said in the lawsuit. That practice “thwarts comparison shopping and, consequently, allows Booking to lure unwitting consumers with artificially low room prices,” the state alleged.
A representative of the company didn’t immediately respond to a request for comment on the lawsuit.
Read more: Booking.com Changes Way It Presents Prices After EU Criticisms
The suit includes images of Booking.com as a user searches for a hotel room in San Antonio. It shows the rate listed on the website for a room at the JW Marriott Hill Country Resort & Spa is $409, but once the user clicks through to make a reservation, the rate jumps to just over $546. The increase is due to a mandatory $56 fee charged by the hotel, plus $81 in taxes, according to the complaint.
Texas claims that the practice benefits the company, which allegedly “retains a percentage of the total amount charged on mandatory fees.”
The travel-search company, which also allows reservations of flights, car rentals and attractions, makes most of its revenue from collecting commissions through facilitating accommodation bookings on Booking.com, according to a May prospectus document.
Booking and other hotel booking sites, including main competitor Expedia Group, have faced similar probes in 2017-19 from UK and EU watchdogs over alleged lack of clarity and accuracy that could mislead users when looking for the best deals.
As part of a deal to resolve those complaints, Booking and others agreed to make changes, including the way they present online users with prices and offers on their websites across the EU.
The case is Texas v. Booking Holdings, 2023CI16493, Bexar County District Court (166th District).
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