Did a Ramada Hotel Hike Room Rates to $999 to Exploit Freezing Customers Amid Power Outage in Texas?

Social media users claimed the hotel, located in Austin, Texas, was price-gouging customers by charging $999 a night.

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The state of Texas has been battered by a winter storm that pushed the state's power grid to the brink of collapse and millions of residents submerged into darkness without electricity amid freezing temperatures.

As residents across Texas struggled with power outages, a Ramada hotel in Austin drew criticism on social media for appearing to exploit people seeking shelter at the hotel from the extreme conditions.

Ramada Hotel Accused of Price-Gouging Freezing Texas Residents

Tony Plohetski, a senior reporter at KVUE-TV, took to Twitter to share screenshots of listings for the Ramada by Wyndham Austin South offering accommodation for $999 a night on Monday, Feb. 15.

We investigated the claim by looking up the room tariff on the hotel's official website the same day and found that the hotel was selling rooms for $999 a night each.

Ramada by Wyndham Austin South
The rates listed on the hotel's website. Wyndham

A simple Google search also revealed similar results on third-party websites:

Google Search results
Google Search

Wyndham Hotels Responds to Allegations

In the wake of the price-gouging allegations, Wyndham Hotels released the following statement:

"We do not tolerate price gouging and require that hotels comply with all local, state and federal laws. In speaking with the owner of this hotel, which is independently owned and operated as a franchise, it's our understanding that the temporary rate increases seen online were the result of the property working to close out its inventory as it managed the loss of power and other utilities. We have since been assured that no guests were charged, nor was there any intent to charge, the rates shown. While the hotel is not accepting new reservations, guests currently staying at the property are being allowed to extend their stay at no additional cost while they wait for conditions to improve."

Franchise Operator Claims It was an 'Employee Error'

Jay Mazur, a spokesperson for Travis Walk Associates LLC, the franchise operator of the hotel, told KXAN that the room prices were hiked, but it was caused by "an employee error" and should not have occurred. He said none of the guests were charged that amount and it was removed as soon as management learned of the error.

Mazur added that the high prices were a result of a power outage that occurred around that location at approximately 2 a.m. on Monday and the hotel uses a dynamic pricing model, in which the system dynamically chooses the best rate based on demand.

"Because the hotel didn't have power they were not able to go in and close out the rate system and block availability. So, an employee at another property who had multi-property access went in and manually raised it to the highest value in order to deter people from booking the hotel, which is a frequent practice among hotels during high occupancy times, but not during a pandemic, and this employee shouldn't have done that."

"As soon as we were made aware, we closed that. But it was visible for a period of time at that high rate," Mazur said. "Any reservation that came through was cancelled." He added that the hotel is providing food for free and a place to get warm for guests.

More than 4 million Texans remained without power as of Tuesday morning, prompting criticism of the Electric Reliability Council of Texas (ERCOT), the private group that monitors the state's electric grid.