Booking Holdings, the parent company of online travel platforms such as Booking.com, Priceline, and Kayak, has agreed to a $9.5 million settlement with the state of Texas over allegations of deceptive pricing practices.

The settlement, announced by Texas Attorney General Ken Paxton, is the largest of its kind involving a hotel or online travel agency in the United States.

Deceptive pricing practices

The lawsuit claimed that Booking Holdings misled consumers by advertising hotel room rates without disclosing mandatory fees—such as resort, amenity, destination, and utility charges—until later in the booking process.

This practice, known as "drip pricing," created the illusion of lower costs and gave the company an unfair advantage over competitors that provided transparent pricing.

Settlement terms

Under the settlement, Booking Holdings will pay $9.5 million, with $8 million allocated to the Supreme Court Judicial Fund and $1.5 million to cover the state's legal expenses.

Additionally, the company is required to disclose the total price—including all mandatory fees—upfront during the booking process.

While Booking Holdings did not admit to any wrongdoing, it expressed a commitment to transparency and aligning with federal efforts to standardise price displays.

Broader regulatory context

This settlement is part of a broader initiative by U.S. regulators to address hidden fees in the travel industry.

In December 2024, the Federal Trade Commission (FTC) implemented a "Junk Fees Rule," requiring hotels, ticket sellers, and vacation rental operators to disclose the total price upfront.

Attorney General Paxton's office has previously reached similar agreements with hotel chains such as Marriott, Hilton, and Choice Hotels to combat deceptive pricing practices.