Booking Holdings Settles Texas Lawsuit Alleging It Obscured Mandatory Fees

Texas Attorney General Ken Paxton secured a $9.5 million settlement with Booking Holdings to resolve a lawsuit in which Paxton alleged that the online travel agency engaged in deceptive “junk fee” practices.

The lawsuit alleged that Booking Holdings, which operates Booking.com, Priceline.com and Kayak.com, marketed room rates that were not actually available and obscured its mandatory fees at checkout by grouping them with funds owed to the government, the Office of the Attorney General of Texas said in a Tuesday (Aug. 19) press release.

The settlement requires the company to disclose any fees added to the price of a hotel room upfront, according to the release.

“Deceiving Texans by hiding fees is both a deeply unethical business practice and a violation of the law,” Paxton said in the release. “Yet, that’s exactly what Booking chose to do, and now it’s time for the company to pay for their unlawful actions.”

Reached by PYMNTS, a Booking Holdings spokesperson said in an email that the settlement includes no admission of wrongdoing, enables the company to avoid prolonged litigation and allows it to move forward.

“We respectfully disagree with the Texas Attorney General’s characterization of this settlement and reject any suggestion that we engaged in unlawful, deceptive or unethical practices,” the spokesperson said.

“Booking Holdings has long supported a clear national standard for displaying total prices, and we remain committed to transparency and providing travelers with accurate information,” the spokesperson said. “While resort fees are typically set and retained by hotel partners, we are aligned with recent Federal Trade Commission efforts to bring greater consistency to price displays.”

The Federal Trade Commission approved a Junk Fees Rule in December, saying the rule is designed to ensure that consumers seeking hotels or tickets for concerts or sporting events won’t be surprised by “resort,” “convenience” or “service” fees.

The regulator said the rule doesn’t limit the types or amounts of fees or specific pricing strategies, but rather requires businesses to be upfront about prices.

The Office of the Attorney General of Texas filed its lawsuit against Booking Holdings in August 2023, alleging that Booking Holdings violated the Texas Deceptive Trade Practices Act by engaging in false, misleading, or deceptive acts or practices.