Booking.com parent in US$9.5 million ‘junk fee’ settlement with Texas

The parent of Booking.com and other travel websites will pay US$9.5 million to settle a Texas lawsuit claiming it deceptively marketed hotel rooms by omitting mandatory “junk” fees, enticing consumers with artificially low prices.

Texas Attorney General Ken Paxton said on Tuesday the settlement with Booking Holdings is the largest by a U.S. state related to junk fee practices against any hotel or online travel agency.

Booking also operates the websites Priceline.com and Kayak.

Paxton accused Booking of “drip pricing” in which it improperly bundled hotels’ resort fees, amenity fees, destination fees and utility fees in a taxes and fees line item at checkout.

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The practice gave Booking an unfair advantage over rivals that avoided such “bait and switch” tactics, he said.

The settlement agreement requires Booking to disclose fees up front. A copy was not immediately available.

Paxton said he reached similar settlements in 2023 with the Choice, Hilton and Marriott hotel chains.

Booking, headquartered in Norwalk, Connecticut, denied wrongdoing and said it remained committed to transparency and providing accurate information.

It also said that while hotels typically set and keep resort fees, “we are aligned with recent Federal Trade Commission efforts to bring greater consistency to price displays.”

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Cracking down on fees that boost consumer costs without visible benefits had been a goal of former U.S. President Joe Biden.

In December, the FTC announced a final Junk Fees Rule requiring hotels, ticket sellers and vacation rental operators to disclose total prices up front.

Current FTC Chairman Andrew Ferguson dissented, saying Biden was about to leave office and the incoming Trump administration should decide which rules to adopt.

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Reporting by Jonathan Stempel in New York; Editing by Franklin Paul, Leslie Adler and Sandra Maler