A drive along Highway 22 shows what buildings are still standing and others that were damaged by fires in September 2020.
When he was forced to evacuate from his Gates home due to the Santiam Fire early Tuesday morning, Daniel Tucker followed a line of Santiam Canyon residents down Highway 22 into Salem.
He felt fortunate to find a hotel room in Salem. But he was charged $700 for four nights.
Wildfires have displaced thousands of Santiam Canyon residents forced to evacuate their homes.
After reports of price gouging at hotels, Gov. Kate Brown issued an executive order declaring an abnormal market disruption Thursday, which allows the Attorney General and Oregon Department of Justice to investigate businesses where price gouging is reported.
“During a statewide emergency, it is absolutely unacceptable to price gouge Oregonians who have already been hard hit and are facing devastating loss,” Brown said in a statement.
The site of a future hotel on Hawthorne Ave. SE near State St. in Salem on Sep. 6, 2019. (Photo: ANNA REED / STATESMAN JOURNAL)
OSU-Cascades professor Todd Montgomery said price gouging in hotels is harder to define than it is in other industries.
He said demand-based pricing systems for many hotel chains allow them to change their prices nearly instantaneously.
Many chain hotels automate their pricing on a real-time basis, and prices can surge in minutes.
“Price gouging is a hard, hard thing to define because it’s so relative,” Montgomery said. “It’s even harder to prove.”
Hotels are limited on their highest prices by “rack rates,” the maximum they charge for a room when demand is highest.
Montgomery said the “rack rates” are often capped by a government or city ordinance, but consumers rarely pay that much for a room as they’re normally heavily discounted.
With no state fair this year, demand for hotels in the past few weeks was soft; in the days after the wildfires, most hotels have been sold out
“Once again, it becomes is that price gouging or is that just a normal part of business?” Montgomery said.
Evacuations: Oregon wildfires: See full list of evacuation levels, orders county by county
The hotel industry was one of the hardest hit in Oregon during the pandemic.
It lost 15,700 of its 25,200 jobs by April, according to the Oregon Employment Department.
While hotels in some areas of the state such as Central Oregon and the Oregon Coast have slightly rebounded over the summer, some hotels in Portland have issued notices with the state that they are making some of their layoffs permanent.
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A few months ago, some hotels in Salem were closed entirely.
Wednesday night, there were few parking spots available at any of those hotels.
“Supply was already at some of its lowest points in years due to COVID,” Montgomery said. “A lot of travel companies are on the financial brink because of COVID.”
Independence, which includes 75 rooms, electric-vehicle charging stations and a private massage facility. It is unlike anything seen before in its namesake city, home to about 10,000 people west of Salem.
While the hotels may make a short-term gain by charging more, the hotels that raise their rates to the maximum during a natural disaster risk long-term losses of goodwill.
“When you’re on the financial brink already, this is truly a remarkably bad situation that is incredibly complex,” Montgomery said.
Brown’s order allows for businesses found in violation of price gouging to be issued fines, and other actions can be taken by them.
A similar order by Brown on retail businesses in March after the COVID-19 pandemic netted a number of citations and fines.
“To any who would take advantage of neighbors in need, the Governor’s order on price gouging is a reminder that the Oregon Department of Justice will stop them in their tracks,” Attorney General Ellen Rosenblum said in a statement.
People who believe they have been forced to pay excessive prices for essential goods and services can report them to the Department of Justice at 877-877-9392 or www.OregonConsumer.gov.
Many of those who were forced to evacuate their homes don’t know how long it will be until they can return home.
Tucker feels fortunate he was able to get his recreational vehicle from his home and park it at the State Fairgrounds in Salem.
“Our fifth wheel is at the fairgrounds and if we have to stay Friday night, we’ll be camping at the fairgrounds,” Tucker said.
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Bill Poehler covers Marion County for the Statesman Journal. Contact him at [email protected] or Twitter.com/bpoehler
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