More than two years after Hurricane Sandy, price gouging accusations, fines, and settlements continue to plague multiple hotels. To protect yourself from costly price gouging penalties—which in some states run as high as $10,000 or more per violation (or every time that rate is charged)—familiarize yourself with your state’s price gouging statute before you face an emergency-related guest surge, says attorney Stephen Barth, professor at the University of Houston and founder of HospitalityLawyer.com. “Price gouging fines can be substantial. They are very serious about this.”
Anti-gouging statutes typically apply only during declared local, state, or national emergencies. The definition of price gouging differs with each state, ranging from any increase at all, to more than 10 percent higher than the pre-emergency price, to simply “unconscionable prices.”
To find out your state’s stance, Barth recommends checking the website of your state’s attorney general or local district attorney. Check, too, with your state and local professional association. If you’re still unclear, consider hiring a local attorney to advise you on the matter.
The cost of a professional legal opinion, after all, is minimal compared to the potential cost of noncompliance.
While experts interviewed for this article consider it their fiduciary responsibility to raise room rates a reasonable amount during a planned local draw, all agreed that rates should never be raised for an emergency-related guest surge.
