David Rowell notes in his latest weekly email that Florida has settled with 23 hotels that were accused of price gouging during last year’s hurricane season.
- the daily rate for rooms at the motel increased from $55 per night to $75 and, in some instances, $100 per night.
As a result
- the Airport Inn will provide restitution to guests affected by the price gouging practices, many of whom were over age 60.
(I’m not sure why being 60 years old makes paying $75 for a hotel night especially problematic?)
I addressed this issue when it came up last year:
The attorney general has issued a press release to let voters know he’s fighting evil, greedy corporations.
- “Hurricane Charley is the worst natural disaster to befall our state in a dozen years, and it is unthinkable that anyone would try to take advantage of neighbors at a time like this. We are taking a two-pronged approach to fight this egregious behavior, ” said Crist. “Families putting their lives back together should not have to worry about price gouging.”
The conduct in question is a Days Inn charging $109 for a room when a billboard advertised $50 rooms, and a Crossroads Motor Lodge charging $61.27 (including all taxes and fees) rather than $44.79.
My blood doesn’t really boil at $109 hotel nights, even when it’s for an airport Days Inn. While there may be an advertised teaser rate of $50, the cheapest rate over a range of dates on the Days Inn website and on Expedia is $62.99, although I also found a pre-paid rate at Res99.com for $55.99 – along with a “DAYS INN ROCK BOTTOM RATE PROMOTIONAL RATE” of $71.99 and a “Standard Rate” (presumably rack) of $79.99.
The complainant indicates that they were renting one of the last rooms at the hotel, and the rates charged are presumably within the maximum posted daily rate for the property (that absurd room rate printed on the back of your hotel room door). Naturally the last rooms available at a property fetch a higher price, hotels and airlines refer to this as ‘yield management’ and economists call this allocating scarce resources to their highest valued use.
The Florida Attorney General outlines the details of Florida’s anti-gouging rule:
- Florida’s price gouging statute requires that the cost of necessities like food and water must remain at the price that was average during the 30 days immediately preceding a major storm like Hurricane Charley.
I’m not even sure what it would mean to determine average prices for a 30 day period preceding an emergency. Hotels do calculate average daily room rates, but on any given day the price that any traveler will pay varies substantially. Would the Florida statute require not just avoiding price increases, but setting the mean price as the price ceiling for the duration of the declared emergency?
This seems an absurd conclusion given the industry’s status quo pricing practices, and an offensive one on basic freedom grounds. Thus I take umbrage with Chris Elliott who encourages readers to file complaints with the Florida Department of Agriculture and Consumer Services. Though I don’t take too much umbrage because there’s something cool about sending such a complaint to Florida’s Commussioner of Agriculture, one Charles Bronson.
Tyler Cowen offered some interesting thoughts on why we don’t see more price gouging after Hurricane Isabel last year.