What to do if you suspect hotel price gouging

Feb 16, 2021

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A winter storm in Texas has brought record-low temperatures, along with power outages, canceled flights and — in at least one hotel’s case — what appeared to be price-gouging. Luckily, that didn’t turn out to be the case.

Amid the low temperatures, social media users were appalled to see some hotels apparently jacking up their rates. One hotel, the two-star Ramada by Wyndham Austin South, offered rooms for a whopping $750 a night on Monday night — before dropping back down to $99 a night for Wednesday. This was an anomaly among several hotels in the area, including other Wyndham properties.

TPG reached out to Wyndham Hotels and Resorts about the Ramada Inn pricing and received clarification. The hotel was in the process of zeroing out inventory and for a short duration, out-of-the-norm pricing was shown on a few online booking engines. However, those were not the prices the hotel was charging and no one booked or paid for a room at the inflated price. The glitch was solved quickly.

According to Wyndham:

“We do not tolerate price gouging and require that hotels comply with all local, state and federal laws. In speaking with the owner of this hotel, which is independently owned and operated as a franchise, it’s our understanding that the temporary rate increases seen online were the result of the property working to close out its inventory as it managed the loss of power and other utilities.

We have since been assured that no guests were charged, nor was there any intent to charge, the rates shown. While the hotel is not accepting new reservations, guests currently staying at the property are being allowed to extend their stay at no additional cost while they wait for conditions to improve.”

That’s good news in this case. However, if you ever find yourself in a potential hotel price-gouging situation, here’s what you can do.

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Look at the maximum rate

Hotel room interior in the morning
(Photo by Edvard Nalbantjan/Shutterstock)

To find the maximum rate a hotel can charge you during a natural disaster, all you have to do is look at your hotel room door.

Texas requires hotels to post a maximum room rate notice in all of their rooms, according to the Texas Hotel & Lodging Association, the trade association representing the lodging and tourism industry.

According to Texas Hotel & Lodging Association, “There is no specific ‘maximum’ amount that a hotel is limited to, but it should post a rate that is high enough to cover what the hotel would expect to rent the room for in your highest demand period, but not so unrealistically high that the property would never receive such a rate.”

And if a disaster is declared, the association provides additional guidance on room rate pricing.

Call your state’s attorney general — then your credit card company

More than 4 million Texans woke up without power this morning, according to poweroutage.us, a site that tracks outages.

But price-gouging is illegal, according to Texas law. And businesses that engage in the practice can be prosecuted by the Office of the Attorney General after a disaster has been declared by the governor or president. The state of Texas urges residents to file a consumer complaint to report a suspected price-gouging incident.

However, the Office of the Attorney General noted that “high prices alone do not mean that price gouging has taken place,” because businesses are generally allowed to determine the prices for their products.

In this case, it would be illegal because Governor Greg Abbott issued a disaster declaration on Friday, and the White House granted his request for a federal emergency declaration.

If you’re not in Texas but have experienced price gouging, find the contact information for state attorneys general throughout the U.S.

Find out if your credit card’s travel insurance will help

(Photo by Artur Widak/NurPhoto via Getty Images)

And if this pandemic has taught us anything, it’s that everything we may have taken for granted before (our health, mobility and safety) is no longer a given.

But if you find yourself in a bind, your credit card might come in handy.

For instance, many travel rewards cards offer travel insurance when you use your card to purchase travel. Some cards, however, require you to pay for your entire trip with the card, while others will provide coverage even if you only pay taxes and fees on an award ticket.

See the links below for more information on these insurance types and the best cards for every kind of insurance.

Bottom line

Texas residents throughout the state have banded together to find shelter — not easy when so many customers are experiencing power outages. If you find yourself needing essentials, like shelter during a natural disaster, know that there are options. Contact your county and state’s emergency management departments for assistance.

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