Expedia.com, Priceline Participate In NAD Forum

New York, NY – Jan. 15,  2009 – The National Advertising Division of the Council of Better Business Bureaus has recommended Priceline.com, the online travel booking service, modify broadcast advertising to assure consumers understand that the company charges a booking fee for flights selected through Priceline’s “Name Your Own Price” service. NAD determined that Website advertising and Priceline’s MySpace pages, both modified during the course of NAD’s inquiry, adequately disclosed the booking fee.

NAD, the advertising industry’s self-regulatory forum, examined advertising from Priceline.com following a challenge by Expedia.com, a competing online travel service.  Expedia challenged the claim that Priceline does not charge booking fees for airline reservations placed through the Priceline service.

NAD noted in its decision that Priceline.com offers consumers two different methods for booking flights. The “Name Your Own Price” service, which has been offered since Priceline’s inception, allows the consumer to name a price for a requested flight; Priceline searches for and finds a flight that matches the consumer’s criteria, but does not reveal the details to the consumer until the flight is book.

The “published price” flight booking service, introduced in 2005, allows consumers the option of selecting from a list of “published price” flights. Currently, Priceline.com charges a booking fee for flights booked using its “Name Your Own Price” booking service, but not for flights booked using its “published price” booking service.

NAD noted that Priceline.com modified its broadcast, Website and MySpace advertising during the course of the NAD review. NAD determined that the Website and MySpace page as modified, included adequate disclosures and provided consumers with the clear understanding that the “no booking fee” offer applies only to its published price airfare reservation service.

However, NAD recommended that the company further modify broadcast advertising.

In its original form, the commercial included a disclaimer that stated “No Booking Fee Does Not Include Name Your Own Price Purchases.” The modified commercial more clearly qualified the “no booking fee” claims, while removing the time-limited claim “introducing.”

NAD recommended that the advertiser set up the commercial to make it clear that the service being advertised is the “published price” service and the “no booking fee” offer only applies to that service.  

In its advertiser’s statement, Priceline said that while it “believes that its television commercial also adequately discloses that its ‘no booking fee’ policy pertains to published price flights, Priceline supports industry self regulation, and will take NAD’s recommendations into account if it decides to air the commercial again.”