San Francisco suing to stop allegedly ‘brazen hotel booking scam’

Leading up to Labor Day weekend last year, San Francisco resident Shipra Shukla booked a hotel reservation online for a trip to Wyoming and fell for a widespread travel scam that allegedly deceives people into overpaying for a room.

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Shukla knew the name of the hotel where she wanted to stay and did what many people would do next. She typed the name into Google and clicked one of the top results. “I thought it was the website for the hotel. It looked really pretty, and it had a phone number on it,” she told SFGATE. “The way I function is that I’ll always call the phone number first.”

After speaking with a person who allegedly claimed they represented the Snow King Resort in Jackson, Shukla reserved a room. However, she was unaware that she was actually speaking with someone from a third party called Guest Reservations and that she had just paid more for the room than if she had just gone to the hotel’s actual website. “When I called, I thought I was talking to the hotel,” Shukla said. “I feel like that was deception.”

According to numerous complaints from customers, travel websites such as Guest Reservations and another called Book Online are accused of overcharging through extra fees and services and then pocketing the difference.

For years, one wrong click on a misleading URL while booking a hotel reservation online has tricked travelers into overpaying for a room, sometimes by up to 85% the actual rate. This week, San Francisco’s city attorney is trying to crack down.

“We’re filing a lawsuit to stop a brazen hotel booking scam that’s misleading travelers, inflating prices and harming our local hospitality industry,” City Attorney David Chiu told SFGATE on Tuesday. 

According to a consumer protection lawsuit filed on Wednesday, “scam websites” with unassuming names in the URL like Guest Reservations and Book Online have allegedly targeted travelers both to and from California since 2022.

The City Attorney’s Office is taking action against two out-of-state companies that operate each of the websites, as well as against the hospitality giant Booking Holdings, which owns metasearch engines such as Booking.com, Priceline.com and Kayak. The suit alleges that Booking Holdings is participating in the “scheme” by knowingly providing hotel inventory and other services.

SFGATE reached out to representatives of Booking Holdings, Guest Reservations and Book Online but did not head back before the time of publication.

The suit aims to put an end to the allegedly deceptive practice through California’s Unfair Competition Law, which allows an office like that of the city attorney to pursue such accountability. “In this instance, a number of entities are impersonating real hotels,” Chiu said. “As a result, they gain an unfair market advantage.”

The suit also seeks restitution for Californians who may have been harmed and asks that the companies pay a civil penalty of $2,500 for each alleged violation. The city has an online form or complaint hotline for anyone who wants to log a report.

In the case of Guest Reservations, which is part of a Texas-based corporation called Infinite Choice, the penalties could reach millions of dollars. The Better Business Bureau, an independent nonprofit focused on consumer education, has logged more than 1,000 total complaints against Guest Reservations in the last three years, with nearly a majority filed in the last 12 months. 

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Guest Reservations is able to sell hotel room space because the company Priceline Partner Solutions, owned by Booking Holdings, provides it with hotel inventory. The New York Times found that Guest Reservations purchases hundreds of thousands of ads from Google through a separate company so that it can appear at the top of a search.

Representatives for Priceline and Google told the Times that Guest Reservations does not violate their rules. 

This isn’t the first time these types of websites have faced legal scrutiny. Booking Holdings purchased a website called Getaroom.com in 2021 that “was the subject of numerous consumer complaints and a 2020 consumer class action alleging it spoofed authentic hotel websites via sponsored web search results,” according to the suit. Getaroom’s CEO Matt Davis joined Booking as the CEO of Priceline Partner Solutions before leaving to lead Infinite Choice, which operates Guest Reservations.

The city attorney’s office found that most affected travelers didn’t realize they were overcharged until they tried to update or cancel the reservation. According to Wednesday’s suit, the third-party entities allegedly create further obstacles, such as requiring full up-front payment and having stricter cancellation terms.

“It’s so pernicious,” Chiu said. “These entities are marking up the hotel inventory … and the consumers don’t realize it.”

That was the case for Shuckla. After unknowingly booking through Guest Reservations for a four-night stay that cost over $2,500, Shukla said her travel plans changed and that she returned a couple of days later for a refund. A simple phone call turned into several more as she was passed from one person to the next, ultimately ending up speaking with someone in Texas about a hotel reservation in Wyoming.

“To make it more confusing, I don’t even know their real name — on the phone they identify themselves as Priceline Partner Solutions, but the website URL says Guest Services Reservations,” Shukla said.

Two weeks after the initial charge, Shukla said she was fully reimbursed and that she filed a complaint to the Better Business Bureau the following month.

Between Guest Reservations and Book Online, the Better Business Bureau reported over 1,800 nationwide consumer complaints. “The complaints logged with the BBB could be the tip of the iceberg for the tens of thousands of Californians that have been scammed by these entities,” Chiu said. 

While speaking to the actual front desk for the Snow King Resort about the refund last year, Shukla said the clerk was helpful and understanding of the situation. “Snow King said, ‘We get this all the time,’” Shukla said. “They said, ‘We had to do this for an elderly couple last week.’”