KXAN price gouging investigation leads to 40 hotel refunds

The Robstown Best Western Plus was charging $300 for rooms on August 26, 2017 as Hurricane Harvey pounded the Texas coast. The TX Attorney General's Office confirmed finding 40 total instances of "price gouging" at this hotel. (KXAN Photo)
The Robstown Best Western Plus was charging $300 for rooms on August 26, 2017 as Hurricane Harvey pounded the Texas coast. The TX Attorney General's Office confirmed finding 40 total instances of "price gouging" at this hotel. (KXAN Photo)

AUSTIN (KXAN) – As Hurricane Harvey pounded the Texas coast Friday and Saturday night, thousands of people evacuated, sending many to hotels and shelters.

And, for some, they sought refuge in the path of more trouble.

Saturday, a KXAN crew booked a room at the Best Western Plus in Robstown, a small town 20 miles west of Corpus Christi. An internet search showed room rates for a two queen bed priced between $120 and $149 a night. But, when it came time to book the room at the hotel’s counter, that price nearly tripled.

“What’s the total going to be?” reporter Wes Rapaport asked the hotel clerk. “$321.89,” the clerk responded.

A few minutes of questioning ensued about why the price nearly tripled. In a video recorded conversation, the clerk admits the $289 room rates are not what the hotel normally charges.

“Weekends start at $149, sometimes we start at $189,” the clerk tells the KXAN crew. “But, why is it so much?” Rapaport asked. “Because people are calling to take rooms, we need to (inaudible) the price. I don’t have any control on the price,” the clerk responded.

The next morning, Rapaport and his photographer confronted the hotel’s clerk about the charges, asking for a manager. The clerk told the KXAN crew there was no manager available. The clerk is seen on the video checking the room rate on the computer.

“Yeah, that was your rate — $289,” the clerk confirmed. “What’s it normally?” Rapaport asked. “Uh, I’m not aware. I’m not sure,” the clerk responded.

This is the receipt for total charges for the August 26 hotel stay in Robstown, Texas. The Texas Attorney General’s Office said it found 39 other cases with similar charges.

The clerk later confirmed room rates were normally around $119 a night, but could not explain the nearly tripling of the room rate the weekend Harvey hit the Texas coast, “It’s not that I’m jacking up the price, it’s because I have no control over that,” the clerk explained. “I know it’s not you,” Rapaport responded.

“And, you and 18 other guests — 18 other people paid that rate,” the clerk told the KXAN crew.

“So, $119 is a lot different than $289, right?” Rapaport asked the hotel clerk. “Correct,” the clerk replied.

During a Sunday afternoon interview with Texas Attorney General Ken Paxton, we showed his office a copy of the invoice from the Robstown Best Western Plus. Paxton took the invoice and handed it off to his team of lawyers working price gouging complaints.

“We had a team go out immediately and we found out there was some truth to the claim that there was price gouging going on at the hotel,” Deputy Attorney General Jim Davis told KXAN during an interview Monday morning.

Within three hours, Davis and his team uncovered 39 other hotel guests with charges similar to the KXAN charge. In a phone call Sunday evening, the hotel promised the AG’s office to refund what it charged guests above the normal rate.

“We later learned from our efforts that 40 people had been refunded — nearly immediately. We’re going to validate that and check for the rest of the story,” Davis said.

Best Western Hotels & Resorts issued a statement Monday, telling KXAN, “In advance of the storm, we proactively advised hotels on prohibitions against price-gouging and communicated our position as a brand that compassion be exercised during this time of crisis,” company spokeswoman Courtney McCurry wrote in a statement.

McCurry’s statement went on to state the chain “is dedicated to providing the highest level of customer care. We take reports of price-gouging very seriously and immediately contacted the property in question when we learned of this report. The hotel advised they would be reimbursing guests on Aug. 28 all amounts charged in excess of their average daily rate for this time period.”

The AG’s office fears this example could be just one example of potentially hundreds of price gouging cases related to Harvey’s path of destruction.

“We’re working hard to get quick closure and get the message out that: don’t break this law because we will find you and we’ll do our best to stop it,” Davis said.

The Attorney General’s Office’s (800) 252-8011 complaint line and the agency’s online complaint unit already fielded more than 350 price gouging complaints since Hurricane Harvey’s impact. The main thing the AG’s office needs when the public reports a suspected price gouging event is proof.

“If you see it happening, take a photograph. Use your cell phone. That’s one of the things of this storm that’s different, is the social media effect and the information we get,” Davis said. The office is searching social media postings for price gouging allegations and putting agents on the ground to investigate.

“So, getting a photograph of a receipt like we got on Sunday is the fastest way for us to identify the location and the problem and get a quick resolution,” Davis told KXAN.

“Texans know right from wrong. This is an easy one: don’t take advantage of people who are vulnerable because they’re running away from a flood or affected by a hurricane,” Davis said.

The hotel also assessed $31.90 in state and local taxes. The day before, Texas Gov. Greg Abbott announced a proclamation, suspended all tax collections on hotel and motel occupancy taxes from the “victims of Hurricane Harvey or personnel participating in relief operations.”

That exemption would have included news outlets and any other person fleeing the storm, according to the AG’s office.

“Yes, we’re going to waive that,” the clerk told our KXAN crew during the confrontation over the charges.

The AG’s office delivered a subpoena for records to the Best Western Plus – Tropic Inn today. The subpoena is called a Civil Investigative Demand and requires a business to produce financial records to the AG’s investigators.

Once a business produces the records and the Attorney General’s Civil Litigation unit reviews them, the AG’s office could decide to file a lawsuit against the business for violations of the Texas Deceptive Trade Practices Act.

Penalties for violating the act run up to $20,000 for each offense and up to $250,000 if the victim is 65 years old or older. The attorney general’s office is continuing to investigate this hotel’s charges, but has not made a decision on whether penalties might come later.

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