The financial impact stemmed from a Federal Trade Commission probe into deceptive hotel ads, fee disclosures, and billing practices tied to Priceline's partner operations. The Norwalk, Connecticut-based firm absorbed a $900 million revenue reduction alongside a $100 million loss accrual, driving quarterly revenue down 1 percent year-over-year to $8.89 billion. In addition to the federal scrutiny, both Priceline and Guest Reservations are contending with an ongoing legal challenge filed by the city of San Francisco.
Key points
Priceline and Guest Reservations face persistent legal pressure, including an active laws…: Priceline and Guest Reservations face persistent legal pressure, including an active lawsuit brought by the city of San Francisco.
Resilient affluent traveler spending helped push profit per share to four dollars and six…: Resilient affluent traveler spending helped push profit per share to four dollars and sixty-six cents, beating analyst targets.
Third-party affiliate practices can expose major travel booking platforms to massive regu…: Third-party affiliate practices can expose major travel booking platforms to massive regulatory penalties and revenue clawbacks.
Sources checked by our analysis pipeline: 1
Nov 3 : Priceline parent Booking Holdings said on Tuesday it recorded a $900 million reduction in revenue and accrued a loss of $100 million related to an FTC action involving its subsidiary's connection to deceptive hotel ads.
As a result, the online travel agency's third-quarter revenue declined 1 per cent year-over-year. Shares of the company were down 1.8 per cent in extended trading.
Booking disclosed in August that the FTC was considering suing Priceline and an affiliate over disclosures, fees, customer support and billing practices.
The FTC had been investigating Priceline's relationship with Guest Reservations, a third-party website that advertises stays at specific hotels. The company previously said it was in talks with the FTC to resolve the matter.
The agency was considering whether Guest Reservations' websites, which often charge higher prices and fees for hotel rooms, violate a rule against impersonating other businesses, along with other potential violations regarding fees.
Reuters reported in October that the case could carry more than $500 million in potential penalties.
Priceline supplies hotel room inventory to Guest Reservations through Priceline Partner Solutions,…
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