According to the suit, the booking companies place online ads near the top of search results for a hotel that are designed to look like the hotel’s website. Customers who click on the links are connected to a website that appears to be a hotel’s reservation portal, the city’s lawsuit said.
The companies, Guest Reservations and Book Online, aided by Booking Holdings, the world’s largest online travel company, “trick customers into believing that they are making a reservation directly with their desired hotel, not a middleman charging a markup,” City Attorney David Chiu’s office said in a suit filed Wednesday in Superior Court against the three companies.
For example, the suit said, one local hotel charges $381 for a reservation that can be refunded up to a day after booking, while Guest Reservations charges $595 and Book Online $526 for the same room, with no refunds allowed. Booking Holdings provides both companies with tools to locate the hotels and book their guests, the city’s lawyers said.
“These websites offer no value to consumers,” but enable the three companies to “siphon millions of dollars away from consumers and the hospitality and tourism industries each year,” Deputy City Attorney Michael Levin-Gesundheit wrote in the court filing.
One self-described victim is state Assembly Member Catherine Stefani, D-San Francisco. She didn’t specify which company or hotel she patronized or how much she was charged, but said she’s prepared to introduce legislation if they don’t change their practices.
“You think you are booking directly with a hotel, only to find out later that you were misled and overcharged,” Stefani said by email on Wednesday. “When I realized what had happened, they refused to refund my money. … If these companies think they can keep ripping off Californians, they are wrong.”
The lawsuit seeks refunds to customers of all overcharges, without specifying how those will be calculated, along with penalties of $2,500 for each fraudulent action and a court order against such practices in the future.
The companies did not immediately respond to requests for comment. Guest Reservations and Book Online are both based in Texas, and Booking Holdings is headquartered in Connecticut.
Both companies’ websites say they are “independent travel” networks, but the Guest Reservation notation is in fine print at the top of the page, and the Book Online statement remains in view only briefly before disappearing, the suit said.
Bob Egelko
