Priceline owner faces FTC crackdown over misleading hotel ads

Picture sitting at the front desk of a hotel when an angry guest demands a refund for a room that cost way more than expected. Booking Holdings, the parent company of Priceline, is now staring down a federal investigation that could cost the giant more than $500 million in penalties. Two sources familiar with the matter revealed that the US Federal Trade Commission is gearing up to take action over online ads that direct consumers to what looks like a hotel's official website, but actually lands them on a third-party booking site called Guest Reservations. These separate sites often charge higher prices and tacked-on fees that catch travelers completely off guard. "For tens of millions of Americans, they don’t notice until they’ve checked out and they’ve paid exorbitant fees," FTC Chairman Andrew Ferguson said. Guest Reservations has already racked up more than 1,000 complaints at the Better Business Bureau from customers who thought they were booking directly with the property. Booking supplies room inventory to Guest Reservations through its Priceline Partner Solutions division. Laura Lee Blake, CEO of the Asian American Hotel Owners Association representing nearly 20,000 hotel owners, admitted she made the exact same mistake herself. "If someone who works in the hotel industry can make that mistake, imagine how easily the average traveler can be confused," she said. Booking shares slipped 1.4% following the news. For your own business travel or family vacations, double-check every web address before you type in your credit card number, or you might end up paying a steep middleman tax.