If the OP actually showed up and was walked, without compensation, I can see that Priceline would have to refund the money--at a bare minimum. Otherwise, it seems to me that the OP just called the hotel and got a brush-off by a careless clerk, but had the OP actually shown up at the hotel might have been given a room. The clerk probably spoke too soon. Yes, the hotel might have been sold out--to new reservations--but they would likely honor a Priceline guest.

People get wrong information all the time on the telephone, perhaps by new employees--in this case by an employee who might have misunderstood the situation--and sometimes we just have to stay with an issue and explain it further, until we have communicated--or spoken to a supervisor.

The OP appears to have jumped to conclusions that the clerk's statement was the final word and didn't give the hotel itself a chance to honor the reservation.

It is not Priceline's fault that (a) the hotel clerk might have given off-the-cuff information that was wrong, and would have been recognized as wrong eventually, or that (b) the guest did not follow procedure and just show up.

At least that is the way I am reading the account of the situation. Maybe the OP can clarify?