Prices increase as Swifties flock to performances in various places around the globe. However, this is not a problem.
Some people were disappointed by Taylor Swift's most recent visit to Pittsburgh. One outraged resident writes in a letter to the editor, "It's a shame when people visiting Pittsburgh for a reunion, wedding, graduation, or some other event have to pay three times the cost of a hotel room because greedy owners are gouging patrons because of a concert at the stadium, which the visitors were not in town for to begin with."
This issue is not exclusive to Pittsburgh. The cost of hotels is increasing as Swifties ravage the globe. In addition, Dublin lodging establishments were charged with "price gouging" around the time of a Swift concert. That's awful, right?
The unexpected response is no. Even while paying an unusually high rate for a hotel stay in Pittsburgh, Dublin, or any other place may be annoying, it's actually for the best.
The price a hotel can charge for rooms rises due to the increased demand for lodging in advance of a Swift event. They raise the price out of self-interest or what is frequently referred to as "greed," but doing so helps those who are more willing to pay for the rooms by clearing the market. Lack of a price increase would result in a shortage, sometimes known as angry customers.
Consider a situation in which prices did not increase. Swifties reserve hotel rooms at steep discounts in advance of the show. The outcome? People who write to us from Pittsburgh, for example, are unable to even get a hotel room, much less one that costs more.
Reunion attendees, wedding crashers, and parents of graduating students would not be allowed to reserve a room, forcing them to choose a less desirable solution like room-sharing or spending the night in a friend or relative's living room. They might decide not to travel at all.
In the end, price increases, or "price gouging," as it is known in the media, enable the most eager consumer to book a room. A graduating student's mom, I dare say, is generally more eager than a Taylor Swift fan. Swifties can go to another city to watch Taylor perform, wait for the next tour, or just use Spotify.
Shame on Mayor Ed Gainey, Allegheny County Executive Rich Fitzgerald, and Gov. Josh Shapiro for tolerating legalized robbery, the letter-to-the-editor writer writes, slamming politicians. There should be caps on the percentage growth of supply-and-demand markets.
The firms have the full right to charge whatever price they choose because they are the legal owners of the hotels; "price gouging" is not a kind of legalized robbery. In fact, requiring them to maintain low pricing is a form of theft. All of the Democrats mentioned as being the politicians astonished me that they took no action. They ought to be praised, not worried.
Why is a Taylor Swift concert less valuable than a vacation or family reunion, too? I have no doubt that many young Swifties would prefer Taylor Swift to almost anything else. A Swiftie can lose their hotel room if they suggest a rule that would allow them to book a room at a lower rate. The idea of restrictions also demonstrates greed, if the hotels do. Advocates of low prices are no better than the hotels that initially raised the rates. The cost of hotels would be $0.00 if travelers had their way.
Furthermore, the long-term effects of a market that prohibits or regulates price gouging are rarely considered. In the future, there might be fewer hotels and thus fewer hotel rooms since resources would be diverted away from hotels and into other lucrative endeavors. The lesser supply meant that future guests would have to fight harder than previously to get hotel rooms.
The creation of additional "junk fees" would raise the cost of price-controlled hotel rooms and expose them to the possibility of discrimination based on arbitrary traits. The same objections to rent control also apply to price controls on hotel rooms.
A self-interested business engaging in "price gouging" tries to set a price that maximizes profits, making the market obvious and equating amount supplied and quantity sought.
The hotels shouldn't be subject to our criticism. If anything, we ought to express our gratitude to them for keeping hotels open despite the extreme demand.
