Hotel rate change

source

Hi all,

Just a quick question from another thread on the Limerick City Forum. A man had a hotel booked and confirmed, he then got an email from the hotel saying that because the booking was on a Heineken Cup weekend the rate would be increased.

My question is, what are the legalities around hotels drastically increasing their prices around big events? To me it smacks of greed, I know on a business principle it's simple supply and demand. But on a legal principle is there anything wrong with changing a room rate from €69 to €150 (or more) just because of large volume of expected guests.

Or is it simply wrong on a moral standpoint?

Tom Young

Offer + Acceptance = Agreement.
Agreement + Consideration = Legally Enforceable Contract.

Work it out for yourself. Consideration as a word, is not a fluffy thought but a legal principle.

source

Tom Young wrote: »

Offer + Acceptance = Agreement.
Agreement + Consideration = Legally Enforceable Contract.

Work it out for yourself. Consideration as a word, is not a fluffy thought but a legal principle.

No I get the contract side of thing.

I'm looking more for whether the arbitrary raising of the prices stands on any legal or regulatory basis. Or are they free to just raise and drop their prices as they see fit based on demand? Taxis cannot randomly raise their prices because of demand, nor can restaurants, my question is why can hotels do this?

Tom Young

What do you think? If there is a reservation in being then then the answer should be obvious.

source

Tom Young wrote: »

What do you think? If there is a reservation in being then then the answer should be obvious.

You're not getting where i'm coming from, forget about the reservation in my original post.

I'm asking about hotels deciding to up their prices overnight when a large event is on, similar to airlines.

usernamegoes

source wrote: »

You're not getting where i'm coming from, forget about the reservation in my original post.

I'm asking about hotels deciding to up their prices overnight when a large event is on, similar to airlines.

I think what you mean is that is there legal market regulation of prices in the hotel sector. Similar to something like the groceries order stopping below cost selling, i.e. setting parameters on prices.

No, the hotel industry is a free market and in my view should be.

source

usernamegoes wrote: »

I think what you mean is that is there legal market regulation of prices in the hotel sector. Similar to something like the groceries order stopping below cost selling, i.e. setting parameters on prices.

No, the hotel industry is a free market and in my view should be.

Yes that's what I'm asking. Do you not think that it is ridiculous that they same room with the same service in the same hotel can have a massive price difference all because of an event going on in the locality. It's greed plain and simple, the hotels know that there is limited number of hotel rooms in the area and know there's going to be large crowds so they up the prices massively to make more profit. Not to even consider the amount they'll make in the bar and restaurants.

I agree it should be a free market and of course hotels should be free to set their own prices, but I think there should be a rule that says hotels cannot just up their prices by 300-400% in some cases just because of a match.

Tom Young

Ah Jaysis.

source

Tom Young wrote: »

Ah Jaysis.

What?!

You fancy making a point or just exclaiming inanely?

usernamegoes

source wrote: »

Yes that's what I'm asking. Do you not think that it is ridiculous that they same room with the same service in the same hotel can have a massive price difference all because of an event going on in the locality. It's greed plain and simple, the hotels know that there is limited number of hotel rooms in the area and know there's going to be large crowds so they up the prices massively to make more profit. Not to even consider the amount they'll make in the bar and restaurants.

I agree it should be a free market but I think there should be a rule that says hotels cannot just up their prices by 300-400% in some cases just because of a match.

Hi, it may be greedy, but it may also be related to other costs, or probably in the hotel sector at the moment it could be subsidizing the rest of the time when the make losses.

However, even if it was greed, I don't think that the State should try to regulate prices in the market, for the most part if not in all parts.

Tom Young

source wrote: »

What?!

You fancy making a point or just exclaiming inanely?

Not really. It's quite a waste of time.

source

usernamegoes wrote: »

or probably in the hotel sector at the moment it could be subsidizing the rest of the time when the make losses.

No this isn't it, Even in the middle of the Celtic Tiger they were doing the same. I'm lucky enough to live within 3km of Thomond Park, but I've been listening to people giving out about this for at least the last 6/7 years.

There's a difference between interfering with pricing and ensuring that the customer doesn't get ripped off.

usernamegoes

source wrote: »

There's a difference between interfering with pricing and ensuring that the customer doesn't get ripped off.

If there is a difference, then it's a very subtle one. In my view the best way for consumers not to get ripped off is to decide not to pay it.

Sorry if my responses seem blunt or augmentative, it's not my intention but I am a big believer in letting people choose how to spend their money.

R

source

Tom Young wrote: »

Not really. It's quite a waste of time.

If you're not interested in the topic then don't bother posting.

Tom Young

I am not interested. You're dead right. I've also closed this thread as it is not a legal discussion at all.

You answered the question you were seeking an answer for in your original post.

This post is better off being placed in a capital economics forum, not here.

Sorry that I have appeared to be quite exasperated by where this was going, but it's not a legal discussion at all. It is pure economics and capitalist economics at that.

Tom

Tom Young

Subject to a couple of PMs from the OP I am reopening this thread.

While I don't believe there is any material legislation or regulation in this area, perhaps someone else does.

While I focussed primarily on contract at the top of the thread, the subsequent posts from the OP define better what precisely is sought.

Tom

Milk & Honey

There is a maximum prices order on hotel rooms in effect. This puts an overall cap on what can be charged for each hotel room. The maximum is quite high. I stayed in the West County Inn in Ennis a couple of years ago. The maximum price for the room was €295. I was paying €59! Effectively there is a price per room with the hotels free to discount in times of slackness.

MyKeyG

Legally speaking once the hotel stays below a certain price cap they can do what they like with the prices. It's called Revenue Management and it's perfectly legal. In essence something like an airline or hotel can anticipate at what price a service will yield the maximum amount of revenue and adjust cost accordingly. That it smacks of greed or is immoral is purely a matter of opinion.

People tend to think that hotels raise their prices at busy periods when the truth is the high price is usually the set price. It's that they're forced to drop their prices during quite periods to try and get something for their rooms.

source

Tom thank you for re-opening this thread, I've now got the answer I've been looking for. I got a pm last night from another poster, with the following quoted:

Bord Failte Hotel Classification

"Display of prices:
The business shall be conducted in accordance with charges not exceeding those specified in the scale of charges which have been duly furnished to the Board or the Board’s
appointed contractor in accordance with section 26(2)(d) of the Tourist Traffic Act, 1939. The scale of maximum charges shall be displayed in a prominent place in the reception
area of the premises and bedrooms in accordance with Section 43 of the said Act together with a copy of the current registration certificate applicable to the premises."

So it does appear as has been pointed out above that under the Tourist Traffic Act 39, this practice is perfectly legal. It would appear to be the case that this applies across the board for Hotels and Airlines and ferries alike.

FreudianSlippers

Moved to Consumer Issues.

Victor

source wrote: »

What?!

You fancy making a point or just exclaiming inanely?

I think you are being innocent / naive.

TeaServer

In my head there is no difference in a hotel, airline or any other business raising prices based on demand. This is what capitalism is all about.

Why do you think the Irish banks (people) are in so much debt right now? Supply Vs demand. A few years ago it was mortgages and houses. Big demand => prices increase. Small demand => prices decrease.

In your case its hotel prices for a rugby game. The hotel know they can fill (or as close to full as is reasonable) the hotel based on the increased prices. Why would anyone sell anything cheaper than the market can bear?

/T

source

TeaServer wrote: »

In my head there is no difference in a hotel, airline or any other business raising prices based on demand. This is what capitalism is all about.

Why do you think the Irish banks (people) are in so much debt right now? Supply Vs demand. A few years ago it was mortgages and houses. Big demand => prices increase. Small demand => prices decrease.

In your case its hotel prices for a rugby game. The hotel know they can fill (or as close to full as is reasonable) the hotel based on the increased prices. Why would anyone sell anything cheaper than the market can bear?

/T

OH sweet Jesus!!!!! This is why I posted in Legal, I wanted to know the legislation and regulations surround this topic. I didn't want a consumer related conversation or an economic one.

I've already gotten my answer, and I have requested this thread be closed before it got moved. Why it's still here I don't know.

victor wrote:

I think you are being innocent / naive.

Great contribution. I didn't know if the practice was legal or regulated, and asked if it was and under what legislation (hence posting in the legal forum). I now know that it is, end of story. Case closed. So long, Farewell, auf weidersein, Goodbye!