Four Steps To Avoid Price Gouging Accusations

Patricia S. Mahlstedt, Esq., member and co-chair of hospitality and gaming at Pittsburgh, Penn.-based law firm Eckert Seamans, says that the most important precaution hoteliers can take against accusations of price gouging is to have a plan in place before a state of emergency is declared. Here are the steps she recommends that hoteliers take to protect themselves.

Have an established procedure.
“This can be done at the hotel level or by the ownership group or management company. One person should act as an alert system if a state of emergency is declared and notify any properties in that state. They should also be sharing information regarding price gouging laws at this time,” Mahlstedt explains.

Learn the laws.
“Every state has different statutes surrounding a state of emergency, and 25 states have price gouging statutes that state that lodging is an essential service covered under the statute. Compliance with these statutes is a necessity,” Mahlstedt says.

Document everything.
“Documentation is key because you may have to make some judgement calls. You need to establish that you have a procedure in place that complies with the law, you made an effort to follow that procedure, and all of the decisions you made about rates were informed,” Mahlstedt explains.


Stay on top of automatic pricing.
“Lots of properties use automatic rate-setting revenue management systems. During a state of emergency, you need to be monitoring to make sure the automatic system is not establishing rates that will be in violation of price gouging statutes,” Mahlstedt explains.

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