$1000/night hotel rooms

[Pure]

there are news reports of this in the San Diego area, because of evacuations and home loss.

[ADDED 10-29 : so far, we lack confirmation of this remark from CNN news; so it's best if we treat the situation as a hypothetical, and as a standin for any number of common examples of price gouging after this and other natural disasters.]


leaving aside the legal issues and approach, what do you think of a hotel owner/corporation who charges such prices [ADDED: for 'ordinary rooms,' not luxury] in the present context:

[NOTE ADDED: we are talking about some cases whose number is not known; the behavior of 'good corporate citizens' and public spirited business owners is not the issue raised in the above question. see my post #9, below]

 

[3113]

there are news reports of this in the San Diego area, because of evacuations and home loss.

leaving aside the legal issues and approach, what do you think of a hotel owner/corporation who charges such prices in the present context:

Well, first, which hotels are these? Some already charge nearly that much for some of their rooms. Hotel prices in S.D. are pretty outrageous, many running at least $400 a night. Also, if the resources for S.D. are strained and the hotels themselves need to pay out more to upkeep the hotel (water, electricity, etc.), then I can see hotel owners needing to up the prices.

BUT, I do have a hard time seeing even the upscale ones needing to jack those prices from $500 a night to $1000 a night even with strained resources. So, yes, I'd guess this is price-gouging and reprehensible. I'd also guess that they're assuming everyone's insurance will pay and that's why they're doing it. It's why so many of them already charge $400+ a night--because San Diego is a big convention town and companies sending employees to meeting and such pay for those rooms. Likewise here, the hotels probably think they're only gouging the insurance companies.

Still wrong. And supply/demand capitalism aside, not wise. It makes them look bad and loses them a good reputation and repeat customers.

 

[neonlyte]

Pure, everything has a market, the price is really immaterial... if you can afford it. I have friends who spend obscene amounts of money far beyond anything I could realistically describe. It doesn't buy them anything other than a certain status between their peers.

Supply and demand drive a market economy. I'm willing to bet there are also people in the SD area taking in strangers just to provide shelter... but we don't really hear about them. Gouging to take advantage of a catastrophe is a different matter, any action to prevent it will inevitably be retrospective since we all like to believe 'fellows' wouldn't take advantage. They do. Every time. Unitl someone tells them to stop.

 

[JAMESBJOHNSON]

Hotels are in business to make money. They arent charities. The high prices actually have a positive effect on government. When the prices are outrageous people complain, and officials take the pains to increase the resources people need to survive.

Even if the rooms were ONE DOLLAR a night you cant increase the rooms available to the homeless, because there arent enough rooms for more than a small fraction of the people needing shelter.

Besides when did you Lefties start caring about the rich homeless? These arent Katrina Poor People.

 

[Jenny_Jackson]

Pure,
How do we answer this question. Some up-scale hotels in Southern California, as well as elsewhere, normally charge $1,000 per night. There are rooms in Las Vegas that are $30,000 per night.

Are we to assume that Tom Bodet is now charging $1000 for a room at Motel 6 or what is your point? What were the cost of the rooms before the wildfires?

 

[Pure]

JB These arent Katrina Poor People.

who managed to drown or die or simply disappear in large numbers.

 

[Vermilion]

Much the same thing happened (if I recall correctly) in London after the 7/7 bombings a while back. I thought it was reprehensible then and I think it reprehensible now. Sure increase prices a little to cover any increased costs, but extortion? Immoral.

 

[Vermilion]

Besides when did you Lefties start caring about the rich homeless? These arent Katrina Poor People.

No. Some were very rich people who'll be able to buy it all again. Some were just moderately comfortable people whose every penny was sunk in their property and belongings, who had no liquid capital and are now Katrina poor.

 

[Pure]

A capitalist outfit with heart! Manchester Grand Hyatt.

http://biz.yahoo.com/bw/071024/20071024006575.html?.v=1

Manchester Grand Hyatt San Diego Greatly Discounts Over 1,000 Hotel Rooms For Wildfire Evacuees Only - and Their Pets

Wednesday October 24,
8:35 pm ET

Is it, perhaps, in their long range best interest? Can you buy better advertising than this story?

Still, three cheers for these folks.

---
Public-spirited airlines:


http://windowseat.travelocity.com/2007/10/news_flash_impact_of_wildfires_on_travelers_t.html

Though the San Diego International Airport and John Wayne Airport (Orange County) remain open, travelers with immediate plans to visit Southern California can take advantage of airline policies to waive change fees to these and other area airports. Keep in mind policies vary, and in some cases travelers must commence their trips by November 1. Here, a list of airlines that have adjusted policies in the wake of the fires:

Alaska Airlines
American Airlines
ATA
Continental Airlines
Delta
Frontier Airlines
JetBlue
United Airlines
Northwest Airlines
US Airways
Qantas

 

[JAMESBJOHNSON]

VERMILLION

Around here the same people build homes on the water. Theyre not poor people. I assume most of the SD people have insurance. I assume most of them will rebuild on the same sites.

 

[Pure]

Jb,

I don't suppose you have any factual material documenting an alleged scarcity of middle income and poor people among evacuees?

 

[JAMESBJOHNSON]

PURE

Youre arguing that most women are childless because some women are childless. I imagine some deer and coyote were displaced...and birds and snakes. But I think I'm safe with my contention that the bulk of the homeless have the resources they need to take care of themselves. And money or no money wont create one additional hotel room in the immediate future.

Where the poor will get fucked is with apartment and home rentals. You can bet landlords will toss them on the street to accommodate the folks with the insurance money.

Get your own facts to dispute me. You wont believe mine so the effort is a fool's errand.

 

[Pure]

numbers

http://thelede.blogs.nytimes.com/2007/10/23/tracking-the-california-wildfires/

Other facts from the census: San Diego’s evacuation area was far richer, with about 24 percent of its households making more than $100,000 (New Orleans stood at 8 percent). And roughly double the percentage of households in New Orleans made less than $30,000 a year. New Orleans’ poverty rate was triple that of San Diego.

Ethnically, San Diego County was two-thirds white and around a quarter Hispanic. New Orleans was about two-thirds black and around a quarter white.
----

http://www.usatoday.com/news/nation/2005-09-18-new-orleans-rebuilding_x.htm

The poverty rate in New Orleans is 23.2%, almost twice the national rate of 12.7%, according to the Census Bureau. Thirty-five percent of the city's black residents are considered poor, compared with 11.5% of its white residents. (By federal standards, a family of four earning less than $19,307 a year is considered poor.)

=======
note by pure. it would appear then that the San Diego evacuation area had a poverty rate somewhat below the national average,

namely about 8%

 

[Liar]

there are news reports of this in the San Diego area, because of evacuations and home loss.

leaving aside the legal issues and approach, what do you think of a hotel owner/corporation who charges such prices in the present context:

What jenny said.

Is this cheap hotels overcharging to profit of fire evacuees?
Or is it the pricey hortels charging what the pricey hotels always charge?

The former would be a bit dickish.
The latter... well, they're just being who they are. Is there an obligation for a business to be charitable?

 

[3113]

Is there an obligation for a business to be charitable?

No, but there are laws about price gouging. For example, when the last big earthquake hit, a liquor store down the street from me started charging outrageous prices for bottled water and batteries. This is illegal and the store was penalized for it afterwards. The law recognizes a difference between something in scarce supply that people want (say, a popular automobile that everyone wants and, there being only so many made, the dealers can charge more), and things that are scarce in an emergency that people must/are forced to have.

If people MUST have these items, like water and batteries, then it's illegal to over charge for them for the duration of the emergency. This actually does relate back to market reality, by the way; if you favor a free market, what you favor is competition. But the people in the emergency CAN'T go competitive shopping, they have to buy from the store near to hand, and so it's against the spirit of real capitalism for the store near to hand to take advantage of that. Not to mention that if they can't afford to buy your overpriced water, they'll die and you won't have customers

Now I don't know if hotel rooms would come under the same heading here as the batteries and water, but they could given that people have been left, quite literally homeless and haven't any option (?) but to pay that price.

Once again, however, I'd have to know more details before rendering judgement.

 

[cantdog]

Is there an obligation for a business to be charitable?

No. There is an obligation, however, for a person to be charitable. I have citations for that notion if you need them. For me, though, the sense of the common good doesn't derive from authorities, so I am actually citing myself.

People who are fine folks in themselves frequently do behave most ruthlessly in a business context. If a business makes a policy to gouge, let us remember, it is a person or persons who have actually made the decision.

Weird tells me I am overstating it when I point to bottom line driven heartlessness. Yet many thousands of such decisions are made all the time. No one is liable, personally. That helps.

 

[Pure]

good point about individuals, cant.

came across this article about the opposite extreme to the one which is the subject of this thread.

http://www.hotelchatter.com/tag/Hotel News

The Malibu Beach Inn Hosting Firefighters and Rescuers for Free

Where: 22878 Pacific Coast Highway [map], Malibu, CA, United States, 90265

10/23/2007 at 2:22 PM

Tags: Hotel News, Malibu Hotels, Hotel Emergencies

Thanks to commenter DanS we were pointed to a CNN article that mentioned the Malibu Beach Inn owned by Hollywood mogul David Geffen, is hosting firefighters and rescuers who are battling the Malibu fires. Even better, Geffen's spot is hosting them for free.

 

[rgraham666]

In a world where economics is ethics, why are we surprised?

 

[Weird Harold]

Is this cheap hotels overcharging to profit off fire evacuees?
Or is it the pricey hortels charging what the pricey hotels always charge?

I supect that it's the former or it wouldn't be newsworthy.

Unless they're auctioning off scarce rooms to the highest bidder instead of working on afirst come, first served basis, the rooms should rent for whatever the published prices are.

My 2004 Best Western Road Atlas and Travel Guide says that Best Western hotels/motels in the San Diego area run $59-$129, (Double Occupancy, 9/6-12/31). I'd guess that is a fair representation of motel/hotel market prices for this time of year; ten to twenty times "fair market value" certainly looks like illegal price gouging to me.

 

[Darkniciad]

I supect that it's the former or it wouldn't be newsworthy.

Scanning about a half dozen LA and SanDiego TV websites, I see several "Tell us if you're a victim of price gouging" items, and nothing about $1000 hotel rooms.

So maybe it isn't newsworthy.

 

[Guest]

I supect that it's the former or it wouldn't be newsworthy.

Unless they're auctioning off scarce rooms to the highest bidder instead of working on afirst come, first served basis, the rooms should rent for whatever the published prices are.

My 2004 Best Western Road Atlas and Travel Guide says that Best Western hotels/motels in the San Diego area run $59-$129, (Double Occupancy, 9/6-12/31). I'd guess that is a fair representation of motel/hotel market prices for this time of year; ten to twenty times "fair market value" certainly looks like illegal price gouging to me.

That's what it looks like to me.

When W. began his war a few gas stations in the neighborhood raised prices astronomically. In momentary panic, many people paid.

By nightfall cooler heads had prevailed as people realized the world wasn't coming to an end, and those station owners who inflated prices were fined and forced to reimburse customers.

 

[Roxanne Appleby]

First, this story has a whiff of urban legendry about it. Second, the narrow range of responses allowed in the poll say much more about Pure's passionate anti-capitalism than anything else.

With regard to the issue of "price gouging" in the wake of a disaster, I posted this in an earlier discussion about high prices being charged for ice after a hurricane. The following was a response to an article that discussed the perverse effect of price controls that impose a subjective definition of "excessive" price (they essentially ensure that no one can get the commodity at any price):

The excellent article about how price controls explained very well how supressing the rationing effect of prices causes perverse and harmful effects. Brown explained how consumers are better off if retailers engage in “price gouging” by raising the price of ice from its usual $1 to $15 in the wake of a hurricane. This avoids the problem of “the first five people who want to buy ice might obtain the entire stock, (while) one or more of the last five applicants may need the ice more desperately than any of the first five.”

One important addendum to this is addressing the "compassion" issue for people who "can't afford" $15 bags of ice and whose "need" is great.

Let's say the 10th person needs the ice to keep insulin fresh for his diabetic daughter, who will die without it. Where is the ‘compassion’ in a law that prevents the market from operating in such a way as to ensure that the lifesaving ice is available for this customer?

Now, let's say the this person can’t afford $15 ice. That raises a separate issue, which is charity. THIS is the proper realm for compassion. Government is too big and clumsy to exercise effective compassion. Not so individuals, and the institutions of civil society. Odds are, when the situation was explained, the store owner would donate the ice for free to save the diabetic daughter. If not, how hard would it be to raise the money through the institutions that make up what we call civil society: The network of private institutions, community associations, religious organizations, families, friends, coworkers, and their voluntary, from-the-heart interactions? Not very hard at all.

 

[JAMESBJOHNSON]

More to the point, government never responds to emergencies quickly (except for first responders). And entrepreneurs do. Greed motivates entrepreneurs to provide ice and everything else while bureaucrats spin their wheels. If government ice is free, but not available, $15 ice may be a bargain.

 

[Pure]

thanks mr brown!

roxanne said or quoted: Brown explained how consumers are better off if retailers engage in “price gouging” by raising the price of ice from its usual $1 to $15 in the wake of a hurricane.


thanks, mr. B [and roxanne], for the "explanation". i suspect it's on a par with Roxanne's "explanation" why the government's monitoring of meat production or drug quality is a bad thing. or her "explanation" how the health care approaches of most western nations of the last 50 years can never 'work.'

 

[Pure]

regarding roxanne and 'urban legend.'

if price gouging is not common in California, perhaps this has something to do with it?

ohmigod, roxanne, California legislators and its Republican Governor apparently missed your "explanation" of the merits of gouging! indeed, they are "subjectively" fixing prices and instituting a "command economy". can the gulags be far behind?



http://www.insurancejournal.com/news/west/2007/10/25/84538.htm

While the declaration should help to speed claims processing, state Attorney General Edmund G. Brown Jr. announced that he was prepared to investigate and prosecute any businesses that attempt to wrongfully profit from the situation.

"It is illegal to exploit the state of emergency for personal gain," Brown said. "Fires have ravaged communities across Southern California, and the state's anti-price gouging law is now in full force. Anyone who tries to wrongfully profit from the suffering of others will be investigated by the California Department of Justice."

California's anti-price gouging statute, Penal Code Section 396, became immediately effective after the state of emergency was declared on Sunday, October 21. It prohibits charging a price that exceeds, by more than 10 percent, the price of an item before the emergency declaration. The law applies to those who sell food, emergency supplies, medical supplies, building materials and gasoline. The law also applies to repair or reconstruction services, emergency cleanup services, transportation, freight and storage services, and housing and hotel accommodations.


Violators can result in criminal prosecution, imprisonment, a fine up to $10,000 or civil enforcement actions.
People who have been victimized by price gouging are being directed to visit www.ag.ca.gov/consumers or call 800-925-5225.

---

note to rox: as to the 'narrow range' of choices from wholly approve (and applaud), to wholly disapprove:

rox said the narrow range of responses allowed in the poll say much more about Pure's passionate anti-capitalism than anything else.

sorry, you have the guts to go on record.
----

john stossel, channeling roxanne, "explains" the benefits of price gouging: it provides for fairer distribution.

http://abcnews.go.com/2020/Stossel/story?id=1954352&page=1