Four Oregon hotels have been fined a total of $105,600 for price gouging during last year's historic wildfires.
In addition to settlements paid to the state, the hotels will be required to reimburse an estimated 100 customers who were overcharged for rooms, according to a press release from the Oregon Attorney General's Office.
In September 2020, as the fires forced mass evacuations across the state, Gov. Kate Brown issued an executive order declaring an "abnormal disruption of the market" after receiving multiple reports of exorbitant fees for lodging at Oregon hotels. The order gave the Department of Justice authority to investigate claims of businesses charging "unconscionably excessive prices" for goods and services during the statewide emergency.
Capital Inn & Suites in Salem, Rodeway Inn Willamette River in Corvallis, Days Inn by Wyndham in Roseburg, and Le Chateau Inn in Florence were found to have charged more than 15% above their regular rates—the threshold for being considered "unconscionably excessive."
The governor has declared market disruptions two other times in the past year: first at the outset of the pandemic, in response to businesses overcharging for high-demand products, such as toilet paper and disinfectant, and last month as the ice storms and subsequent power outages again displaced thousands of people around the state.
But identifying price gouging in the hotel industry is difficult, says Todd Montgomery, a professor in the hospitality management program at Oregon State University-Cascades in Bend. Room rates at most hotel chains are automated based on demand, and prices can increase almost instantly.
"Gouging comes down to intent, and the intent is to take advantage of a difficult situation," he says. "In a lot of situations, that's not the intent, it's just the algorithm determining the optimal price you're willing to pay."
The Department of Justice has not yet announced any settlements related to the recent power failures, and it is continuing to investigate further gouging claims from the time of the wildfires.