Economics: The Value of "Price Gouging"

[Montegriffo]

So how does this fit into your price gouging is for the common good narrative?
Hotels in the UK are cashing in on the fact that people can't get home through the snow by raising the price of a room.
They are not bringing in services from outside at their own expense. They are simply taking advantage of the adverse conditions to earn a higher profit for themselves.

[DBTrek]

Families that may have been inclined to rent larger rooms, or multiple rooms will self-ration. They’ll be inclined to pay for the minimum necessary space to meet their needs, leaving more hotel space open for other desperate travelers, who will also only pay to meet their minimum needs.

More hotel space will be available to more people rather than the first arrivals taking up more space than necessary based upon the accommodations they’re accustomed to when traveling.

[Speaker to Animals]

Families that may have been inclined to rent larger rooms, or multiple rooms will self-ration. They’ll be inclined to pay for the minimum necessary space to meet their needs, leaving more hotel space open for other desperate travelers, who will also only pay to meet their minimum needs.

More hotel space will be available to more people rather than the first arrivals taking up more space than necessary based upon the accommodations they’re accustomed to when traveling.

LMFAO

How old are you? Remember what happened after Andrew??

[SuburbanFarmer]

Families that may have been inclined to rent larger rooms, or multiple rooms will self-ration. They’ll be inclined to pay for the minimum necessary space to meet their needs, leaving more hotel space open for other desperate travelers, who will also only pay to meet their minimum needs.

More hotel space will be available to more people rather than the first arrivals taking up more space than necessary based upon the accommodations they’re accustomed to when traveling.

LMFAO

How old are you? Remember what happened after Andrew??

I do, and it was terrible.

Again, I don't think we can trust every hotel/quickiemart manager to use an accurate 'demand pricing model' when it's needed. There is massive inefficiency, and genuine gouging in that environment.

There has to be some kind of middle-ground. You can't go laissez-faire, but you can't clamp prices either.

[DBTrek]

How old are you? Remember what happened after Andrew??

No, enlighten me.

I remember what happened during Sandy - grocery stores looking like locusts had wiped them out as the media reminded citizens to kindly leave some of the price-fixed goods for others and not to hoard.

What happened with Andrew?

[Speaker to Animals]

Families that may have been inclined to rent larger rooms, or multiple rooms will self-ration. They’ll be inclined to pay for the minimum necessary space to meet their needs, leaving more hotel space open for other desperate travelers, who will also only pay to meet their minimum needs.

More hotel space will be available to more people rather than the first arrivals taking up more space than necessary based upon the accommodations they’re accustomed to when traveling.

LMFAO

How old are you? Remember what happened after Andrew??

I do, and it was terrible.

Again, I don't think we can trust every hotel/quickiemart manager to use an accurate 'demand pricing model' when it's needed. There is massive inefficiency, and genuine gouging in that environment.

There has to be some kind of middle-ground. You can't go laissez-faire, but you can't clamp prices either.

My recollection of Central Florida in the aftermath: there was a huge amount of vacant rooms because the hotels found it was more profitable to gouge a few wealthy refugees than to lower prices. The narrative that DB is peddling is ass backwards from what happened after Andrew and the reason why Florida now has laws against it. Gouging results in a lot of surplus not even getting sold because it's actually more efficient to charge sky-high rates that the wealthy can afford.

[Speaker to Animals]

Think about it just for two minutes. You have a hotel with, say, twenty rooms. You have more refugees wanting rooms than rooms available. The one thing you probably cannot get away with without getting shot is open price discrimination where the wealthy can actually see you charging them far more for their rooms than you charge everybody else. So you have to choose between gouged prices or slightly higher prices commensurate with demand. But consider what happens if you charge something like $1,000 per night. You might only fill half your rooms at that rate, but if you charged $200 per night, which is still pretty high for most non-luxury motels and hotels, you'd actually make less than had you filled only to half occupancy at $1,000. With no laws prohibiting the practice, what do you think happens?

I can tell you from experience what happens: thousands of people sleeping on the highway because the local hotels and motels charge $1,000 per night even though they never hit occupancy.

That's exactly what happened too.


Price gouging is the economic analogy to Titanic lifeboat seating. Fucking clown.

[Speaker to Animals]

Really, that's your answer right there: Titanic. Lifeboat space was at a premium. Plenty of empty seats though!!

[DBTrek]

Think about it just for two minutes. You have a hotel with, say, twenty rooms. You have more refugees wanting rooms than rooms available. The one thing you probably cannot get away with without getting shot is open price discrimination where the wealthy can actually see you charging them far more for their rooms than you charge everybody else. So you have to choose between gouged prices or slightly higher prices commensurate with demand. But consider what happens if you charge something like $1,000 per night. You might only fill half your rooms at that rate, but if you charged $200 per night, which is still pretty high for most non-luxury motels and hotels, you'd actually make less than had you filled only to half occupancy at $1,000. With no laws prohibiting the practice, what do you think happens?

I can tell you from experience what happens: thousands of people sleeping on the highway because the local hotels and motels charge $1,000 per night even though they never hit occupancy.

That's exactly what happened too.

Google has never heard of this.

The one article about Andrew, mid way down the page, says a lady complained because she was charged $67 for a motel room, representing a 35% increase over normal prices.

Anyone have links to the vacant $1000 per night hotel rooms during Hurricane Andrew?

[SuburbanFarmer]

Think about it just for two minutes. You have a hotel with, say, twenty rooms. You have more refugees wanting rooms than rooms available. The one thing you probably cannot get away with without getting shot is open price discrimination where the wealthy can actually see you charging them far more for their rooms than you charge everybody else. So you have to choose between gouged prices or slightly higher prices commensurate with demand. But consider what happens if you charge something like $1,000 per night. You might only fill half your rooms at that rate, but if you charged $200 per night, which is still pretty high for most non-luxury motels and hotels, you'd actually make less than had you filled only to half occupancy at $1,000. With no laws prohibiting the practice, what do you think happens?

I can tell you from experience what happens: thousands of people sleeping on the highway because the local hotels and motels charge $1,000 per night even though they never hit occupancy.

That's exactly what happened too.

Google has never heard of this.

The one article about Andrew, mid way down the page, says a lady complained because she was charged $67 for a motel room, representing a 35% increase over normal prices.

Anyone have links to the vacant $1000 per night hotel rooms during Hurricane Andrew?

Probably saw some $1000 rooms in Miami, or on the beaches. But StA's right - the pricing went completely out of control, to get tourist money. The locals (as always) were fucked.

That said, there are always public shelters available. The water/food situation was equally fucked though.