Federal Regulators Reportedly Eye Hotel Ads That Pretend to Be the Hotel

Reuters reported on October 7, citing two unnamed sources, that the Federal Trade Commission is preparing action against Booking Holdings over misleading hotel ads. The ads appear to link to a hotel’s own website but send users to a third-party booking site that often charges extra. Regulators are reportedly examining Booking’s ties to a company called Guest Reservations.

Investigators are said to be looking at whether the conduct violates the FTC’s ban on impersonating other businesses, and Reuters says the case could involve penalties of more than 500 million dollars. This remains a reported investigation, so no violations have been established.

The scale described in supporting data is large. An Operto report found 1.1 million predatory ads over 31 days through June 21, affecting 204,000 hotels, with nearly half from GuestReservations.com. Among 232 Better Business Bureau complaints against that site, 38 percent of guests thought they had booked directly with the hotel.

In late July, San Francisco’s city attorney sued GuestReservations.com and BookOnline.com and named Booking Holdings as well. A Booking spokesperson said the company takes consumer protection seriously and believes that lawsuit lacks merit. For travelers, the lesson is to check the web address before entering payment details and to book through a hotel’s verified site.

Sources: Travel Weekly, Hotel Online (Reuters)