Room Pricing During a Disaster
If the Governor declares a disaster, certain limitations are in effect for the private sector.
For lodging operators, we advise that a hotel not raise its rates to levels that are higher than the rates the hotel would normally charge for that level of occupancy when there is not an emergency.
Hotels should review their prior rate history for comparable rooms at the various levels of occupancy at their property.
- The pricing for the rooms during an emergency should be comparable to those rates at those occupancy levels. For example, if a guest calls for a room and the hotel is at 30 percent occupancy, it should quote the rate that is traditional (or less) for that level of occupancy.
- As the hotel fills up, it can raise its rates as it has in the past for higher occupancy levels. However, a hotel’s reputation is benefited by considering a courtesy rate or reduction for individuals who are traveling due to the emergency.
- When the Texas Attorney General’s Office evaluates price gouging complaints, it may subpoena a hotel’s guest records to see what rates the property has received for comparable rooms in the past at the various levels of occupancy. They can use this information to determine if the rate during the emergency was significantly higher than what is normally charged under comparable non-emergency conditions during a similar time period.
- A hotel would be well advised not to immediately charge rack rates for rooms once an emergency is anticipated. Such rates should only be charged once the hotel reaches an occupancy level that it would warrant such a rate and for which the hotel has a history of receiving such a rate.
Please provide all possible courtesies, and do not use traditional yield management pricing during this emergency.