Hotel Price Gouging After the Derecho — Immoral, but Is It Illegal?

The violent storms that ripped through D.C. last Friday cut off power for more than 2 million people.  Blame it on the derecho (I had never heard of it either!).  Now, I was willing to wait 24-48 hours for the power to be restored even in 100 plus degree weather. But as Day 3 approached, and our feisty Wheaten Terrier’s wonderful demeanor turned progressively more sour, my patience wore thin.  It turned out that we would have to wait 5 days for the power to come back on.  After Day 3, my better half convinced me that it was hotel time.  And luckily, we found a hotel that took dogs as well as charged a reasonable price.

But then I started hearing stories of other derecho refugees who were being gouged.  $500/night for a one-star hotel?  Aside from the immorality of taking advantage of people in this way, I wondered whether it was illegal.

It turns out that at least 27 states have anti-gouging laws (including D.C. and Virginia, but NOT Maryland).  In D.C., the law goes into effect whenever a natural disaster occurs or a state of emergency is declared.  Is a “derecho” a natural disaster?  Hmmmm. 

Anyway, the anti-gouging statute prohibits hotels and other commercial enterprises from charging greater than 10% more than their ordinary price.  Unfortunately, the penalty is pretty weak: up to $1,000 per violation and possible suspension of license or permit.

It is interesting that Maryland does not have an anti-gouging statute and that most hotel gouging I anecdotally heard about was in Maryland.  Coincidence?  While Maryland may not have an anti-gouging statute, it does — like most states — have a Consumer Protection Act that might prohibit such activities.  And Consumer Protection statutes often carry hefty penalties.

Were you gouged during the derecho?  If so, let us hear about it.


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