Help us fight price gouging in a natural disaster

February 21, 2011 7:42 PM

How should we address an incident of price gouging at the motel we're staying at? (Longish, despicable details below).

Thousands of homes in our town will be without power for days and we had no way to keep warm apart from going to a motel. The first night, when we called to see if a room was available, a friendly young woman quoted a rate of $71 per night "because we're local." The normal rate for this room is $89. At check-in we asked whether the room would be available for additional nights should we need them and the clerk told us it would. When in the morning we told the day manager of our intention to extend our stay he balked. By this time many others in town wanted rooms and we sensed that he hoped to rent them at a greater rate. We told him of the night clerk's indication that we could extend our stay and he promised to "work something out." We went out to breakfast and called before returning and a fourth staff member, Steve, told us we had been extended but our rate had increased to $109 per night. When we explained about the other quote he told us that $139 is the usual rate. An easy search shows that our room type has never been listed for more than $89. When we returned and passed-by the lobby the the day manager told us our rate would be $129 per night.

What recourse do we have when we check out in a couple of days? Should we pay the higher rate and take it up with the national chain office later (It's a Best Western)? We don't want to say something now and be turned out on our ears. We have a pet to think about, too. (We asked whether our pet would be welcome when we first called to see about a room and the nice young woman gave us a resounding "yes." No additional rate was discussed. We would be happy to pay a pet fee if that's what it really is. This might be a factor as the day manager said at our first meeting, before any rate increase, that there might be a pet fee.

posted by tangram1 to law & government (20 answers total)

You should report it to the Attorney General in whatever state you are in. They are the people who take on the hotels and the gas stations who price gouge during natural disasters in Texas and Florida at least. I'm guessing that the whole town without heat probably falls under that same sort of thing.

It isn't really a pet fee. I feel like if it were a pet fee they would happily tell you that because that is an easy "policy" reason for the rate hike.
posted by magnetsphere at 7:50 PM on February 21, 2011 [2 favorites]

I would suggest you contact your state Attorney General's office after you check out. You need to stay there, so letting them know you intend to do so may not be helpful since you need a place to stay. In many states, the AG will prosecute cases of price-gouging, especially during natural disasters. Also, make sure you keep any and all documentation.
posted by fyrebelley at 7:51 PM on February 21, 2011 [1 favorite]

How is this illegal? Icky maybe, but illegal? Was the deskclerk authorized to set rates?
posted by Ideefixe at 8:04 PM on February 21, 2011

At this point, it doesn't matter if the deskclerk was authorized to set rates. Someone who WAS authorized made them a deal for $109 per night like the manager said, then the rates increased again to $129.

Seconding the first two responses.
posted by plaintiff6r at 8:12 PM on February 21, 2011 [1 favorite]

It would help to know what state you're in. There's a relevant law in Wisconsin, it looks like, if the area is declared in a state of emergency.
posted by Andrhia at 8:12 PM on February 21, 2011

Don't listen to people who don't actually know about the laws and/or regulations in the posters' jurisdiction, or who think that the market = the law.

I've found the NY AG to be very responsive to various concerns I've had about things like health insurance. They were polite and gave me information about the law and my options. They also offered to intercede on my behalf if things continued to go bad. They are elected officials, after all, and like votes.

Contact your AG's office, it shouldn't take too much effort and if they're not interested, well, so be it. The worst that will happen is that they'll politely tell you that there's not much that they can do. They might point you to other relief programs, you never know!
posted by the young rope-rider at 8:15 PM on February 21, 2011 [4 favorites]

Local hotels don't advertise on the local eyewitness news.

And "Local business takes advantage of local disaster to gouge locals, instead of supporting the our community in our time of crisis" makes for a real good news story for enterprising local news director. Or, as other point out, for the local elected DA -- or the city councilman -- who has always wanted to run for Congress.
posted by orthogonality at 8:20 PM on February 21, 2011 [2 favorites]

It would help to know what state you're in.

Apparently it's Michigan, based on the OP's past questions.
posted by John Cohen at 8:36 PM on February 21, 2011

If you're in Michigan, here is the Michigan Attorney General's Consumer Complaint/Inquiry Filing Information page.
posted by amyms at 9:06 PM on February 21, 2011

My previously comment may have been a bit too glib and it was deleted.

However, here are some serious reasons why I think you shouldn't try to use the law to enforce your idea of price fairness.

1) The rooms should go to whoever needs them the most, and willingness to pay is an alright proxy for need. Obviously it's not perfect due to distributional concerns, but it's certainly better than a lottery (which artificially low prices are, essentially).

2) Being able to reap producer surplus is a good incentive to provide emergency supplies - even largely fixed ones like motel rooms.
posted by ripley_ at 10:24 PM on February 21, 2011 [2 favorites]

1) The rooms should go to whoever needs them the most, and willingness to pay is an alright proxy for need. Obviously it's not perfect due to distributional concerns, but it's certainly better than a lottery (which artificially low prices are, essentially).

Rich people have more rights than poor people, is what you're arguing here. Nice.

No. Definitely make a stink about this ASAP. Not just for you, but for anyone who needs shelter and can't afford to be gouged.
posted by Sys Rq at 11:11 PM on February 21, 2011 [8 favorites]

Everything ripley_ said is wrong, go with others advice. For the record, I did not see the previous comment, but I suspect this one should be deleted too. I say this with the hopes that no one else will comment on ripley_ and we can keep this on the op's track.
posted by Felex at 11:14 PM on February 21, 2011

FWIW during what I assume is a similar instance (a frozen water main meaning no running water over Christmas) local hotels and gyms offered us discounted rates instead of price gouging us. I guess bathing is more optional than heat, but still.

This is what I would do:

I would go to an internet cafe and write a formal printed letter addressed tot he day manager, dispassionately stating events. Provide your Best Western address and room number for a return address. provide your normal address and your email address below your signature.

Start with a summary of the background - that following XX natural disaster, your household called around for rates at local hotels and was quoted $71 per night at XYZ Best Western. Be specific in what you are asking for: an extended rate of $71 per night. At the bottom of the letter, put:

CC: Best Western Corporate Headquarters
By FAX

And send a faxed copy of the letter to the corporate head office. It may help.
posted by DarlingBri at 11:36 PM on February 21, 2011 [1 favorite]

Thanks everyone. You're all great as usual!
posted by tangram1 at 12:55 AM on February 22, 2011

I can understand your frustration, but I doubt you have a legal leg to stand on. The natural consequences of supply and demand don't go away in a disaster unless someone is feeling charitable, in which case stable pricing is just that -- charity. From your initial post it sounds like you were promised a low rate for one night, which was honored, and then were told that the room was available for successive nights, which was also apparently true. You assumed the rate would be the same, but I don't see where you were told that by a hotel representative. You say the room has never been listed for more than $89, but I would bet that those listings include fine print saying that prices can change without notice.

It's easy enough to inquire with the AG's office, and you should do that; there might be stronger consumer protections in place than I'm guessing. But you should have a backup plan.
posted by jon1270 at 4:50 AM on February 22, 2011 [2 favorites]

You were quoted a price and terms, but then the hotel changed the price and terms; this may be illegal. Try to get the newspaper and teevee station interested in the story; people have long memories for stuff like this.
posted by theora55 at 7:11 AM on February 22, 2011 [1 favorite]

Availability of room is not a guarantee in price. Your expectation of the old price is your own, it does not have any relation to the reality of supply and demand, or market price. In all transactions, *every buyers* expect the price to be low and *every sellers* expect the price to be high. The notion of "price gouge" is simply your dissatisfaction at the changing circumstances; your justification is not any more valid than the owner's.

Legally speaking, there was no contract between you and the owner for the said price. In order for you to have a contract, there usually should be consideration: you must give up something for something. Had you prepaid for the days in advance, you would have a case. Or, more precisely, had you paid for the "option" of keeping the price the same, that would give you the right to demand the same price. As it was, you didn't do that. Your inquiries and their answers are simply price checking. Imagine had you been buying something else, like gasoline, for example. You wouldn't expect a gas-station to honor the price you saw on their sign last night, would you? The price is what it is right now; you have the choice to buy it now or not. You don't get to tell the seller what price they should sell at, be it yesterday's price, or last year price.
posted by curiousZ at 1:37 PM on February 22, 2011 [2 favorites]

Based on the rack rate notices I've seen posted on hotel room doors, depending on the state, hotels can't just choose to raise the prices whenever they want to whatever they want - they have to honor their posted rack rates.

Here's a thread at FlyerTalk: You Can't Charge More than Rack Rate ... Right?
posted by kristi at 9:08 AM on February 23, 2011

Prior to checkout I called the front desk and explained the situation to the clerk on duty. She was wonderful and agreed that what had occurred did not represent the hotel well. She contacted someone who authorized the first night's rate for what turned out tow be two nights, plus the pet fee, which she said was standard and which seemed fair to us.

It was clear from our conversation that the owner had been trying to take advantage of the situation. I plan to write to him directly and send a copy to the corporate office as well. I believe it helped to be able to suggest that this might be something for our attorney general's office.
posted by tangram1 at 1:49 PM on February 23, 2011

Send this info to local newspapers/ tv station
posted by WizKid at 2:18 PM on February 23, 2011