Texas Attorney General Ken Paxton has won a $9.5 million settlement with Booking Holdings Inc., operator of the Booking.com site, for deceptively marketing hotel room prices to consumers by omitting mandatory fees. This settlement marks the largest amount recovered by a state related to “junk fee” practices against any hotel or online travel agency.
Paxton’s lawsuit against the company, which operates Booking.com, Priceline.com, and Kayak.com, alleged that Booking engaged in illegal practices by enticing consumers initially with artificially low room rates that were not actually available. The lawsuit also argued that Booking obscured mandatory fees by grouping them with funds owed to the government as part of the “Taxes and Fees” line item at checkout. This gave Booking an unfair and unlawful advantage over honest companies that were transparent in displaying the actual initial price of rooms.
“Deceiving Texans by hiding fees is both a deeply unethical business practice and a violation of the law. Yet, that’s exactly what Booking chose to do, and now it’s time for the company to pay for their unlawful actions,” said Paxton. “I will always stand up for Texas consumers and ensure that corporations are fully complying with state law. Texans deserve transparency when looking at prices, and there will be accountability for any company that chooses to unlawfully mislead consumers.”
The settlement’s terms require Booking to disclose any fees added on to a hotel room’s price upfront, allowing consumers to more efficiently shop and compare prices.
Paxton has previously reached agreements with Marriott, Omni, Choice Hotels, and Hilton to ensure that hotel companies are transparent and disclose any fees upfront to consumers. Additionally, his efforts helped spur new federal regulations cracking down on “junk fees.”