Online Travel Reservations: Taxes and Fees
Online travel companies charged customers "taxes and fees" on hotel reservations. But they sent the government only some of the taxes, and they pocket the difference. For example, the online travel company might pay $50 for a hotel room that it rents to a customer for $100 plus tax. But then the travel company only paid occupancy taxes on the $50 it paid for the hotel room, rather than the $100 it charged the customer. In addition, by lumping the taxes and fees together, the companies made it very difficult for customers to know what they are really paying for the room.
We successfully obtained a settlement for customers of Hotwire. Under the settlement, Hotwire customers could choose to receive a cash refund of 25% of service fees they paid, or HotDollars towards future purchases equal to 65% of all service fees they paid. Details can be found at the Settlement Website.
Cases remain pending in courts around the country against Orbitz and Travelocity. A case against Priceline is on appeal.