Hotels claim awards after unprecedented weather hits Texas power grid
Gary Leff at 16. February 2021.
Texas is experiencing weather phenomena not seen in a generation. We don’t do single digit temperatures, negative winds or heavy snow. The problem was compounded when the state’s power grid could not meet demand. Due to the freezing temperatures, the power went out (due to freezing of the gas pipes) at a time when everyone was turning on their heaters.
The head of the state’s power grid (most of which is not connected to the eastern or western U.S. power grid to avoid federal regulation) has ordered local utilities to conduct rotating blackouts to reduce consumption. The houses had to lose power for 10 to 45 minutes each time. In some cases, people lose power for more than a day. Everyone in Austin has to deal with power outages that don’t share a circuit breaker with an essential service like a hospital or fire station.
Residents who have no electricity complain about the scam with hotel prices. And yet, I see
- The Indigo Hotel in the center of town can be booked for $72.
- Hilton Garden Inn in Cedar Park for $76.
- DoubleTree by UT Austin for $68.
Currently the Fairmont charges $421, the Four Seasons $1,406, but the Four Seasons is sold out if you go to the website. So you can’t blame online travel agencies for what they do here at the Four Seasons itself.
It is strange to criticize hotels affected by the pandemic, many of which are closing their doors or making too much profit. How would you like to lose less money in a few nights?
Incidentally, hotels are also experiencing an increase in demand because the airport is closed due to weather conditions, forcing travelers to unexpectedly extend their stays (although this is offset by the fact that people who don’t fly to Austin don’t always cancel their reservations, so hotels don’t always know in advance what inventory is available).
Fully equipped hotels charge more for their newest rooms, especially if their inventory is managed far from the level of the establishment. This equipment is automated or processed by persons outside the State, either at the chain level or by a group of owners who are not usually present on site.
Focusing on hotel room rates rather than those who run the network, and not planning for the long term (this has already happened) seems to be a mistake. And the state even orders the network operator to raise the prices of local public services, retroactively. Rising prices are an important signal for savings and investment, although it is not clear what retroactive price changes do other than shift costs. And if we understand the importance of price signals in shifting resources and investments, why can’t we do it consistently and stop complaining about hotels?
I’m currently stuck at home, luckily I have electricity because I wouldn’t be able to get to the hotel.