When ice and snow take the power out, many people look for a hotel to stay in and keep warm — until they see the price.
Wnter storm and extreme cold warnings in effect for Dallas-Fort Worth this weekend, and similar conditions are hitting most of Texas as well. As a result, concerns are mounting about how the grid will fare, and whether people will get heat in their homes.
Hotels, many of which have their own backup generators, offer a warm night’s sleep when your own home can’t ― but they only have so many rooms for so many people, so prices can spike.
As Paul Vaughn, a hotel pricing expert, explained, that doesn’t necessarily mean price gouging. That term represents a specific, predatory practice of exorbitantly raising prices during a state of emergency.
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That’s illegal, but raising prices to meet demand isn’t.
“Hotels work on a supply and demand pricing model, right?” said Vaughn, the director of data operations at Source Strategies, a Texas hotel pricing analytics company. “So if occupancy is very high, they charge a higher rate for the rooms because they’re in higher demand.”
Prices for Friday and Saturday night appear to be somewhat elevated at certain hotels in the region, based on rates posted to Google Hotels. But it’s unclear if that’s related to the storm, or simply because the booking would be last-minute.
In 2021, winter storms caused the worst grid failure in state history, leaving millions without power or heat for days on end. Folks turned to hotels for relief, but many reported seeing prices in the hundreds — bordering on a thousand dollars ― as near-term demand created a price surge.
Some of those rates were explained at the time as rogue automatic pricing algorithms reacting to unprecedented demand, and few vacancies. But to others, it seemed like price gouging.
If Gov. Greg Abbott declares a state of emergency, hotels are prohibited from raising prices beyond what they would normally be during times with similar occupancy levels. If they do, they are in violation of state law and can be sued by the attorney general’s office, as Ken Paxton did to a San Antonio La Quinta in 2021.
“If the hotel is at a 90% occupancy rate because there’s a big event, the World Cup is in town or something like that, those rooms left are going to be at a premium,” Vaughn said.
“But if they’re charging those kind of exorbitant rates and the hotel is only half full, that’s when they can really get into trouble.”
Because of this, he doesn’t expect to see unfair prices this weekend. But if the worst happens, and you need a hotel to shelter from the cold this weekend, be on the lookout for unfair pricing schemes.
And if you spot one, you can report it to the Texas Attorney General’s Office online.
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