When Best Western price gouges does anyone care?

July 7, 2013

Dyslexia mode

Summary:: Best Western took advantage of the Asiana Airways crash by price gouging customers. While there may be short term moral outrage, will that same outrage get channelled into a boycott? If past evidence is an indicator then I doubt it.

As San Francisco airport attempts to get back to some level of normality following the Asiana Airlines crash, NBC is reporting that Best Western Plus, 380 S Airport Boulevard South San Francisco is price gouging customers to the tune of $999 per night.

Before going on, it should be said that Best Western is possibly the most egregious of many hotels in the area which have increased prices in the wake of increased demand.

Other than the natural disgust one feels on these occasions, I wonder whether anyone will care in a few days' time. Even if they do, will the hotel's policy be influenced by the activities of those engaged with social media? According to one person on Facebook, the price noted was a 'mistake.' If that's the case then I suppose charging $310 is OK. (see image above.) My sense is that if there is any impact at all, it will likely be temporary and of little economic impact.

Time and again we see incidents of corporate malfeasance and abuse followed by moral outrage yet very little changes. The tone of those who are outraged at this incident looks like a replication of the outrage at BP following the Mexican oil disaster of 2010. Yet despite the many calls to boycott using BP products, the company goes on. Check its share price against that of Exxon Mobil and Royal Dutch Shell over the last five years (see image below) and you can see that apart from the stock price collapse following the disaster, BP is tracking its competitors reasonably well.

Now - before anyone takes issue on technical grounds, it seems that collectively, we have short memories. If you think that's true then does the customer voice on social media really matter in the long run?

There are plenty who will say 'yes' Alexa Curtis on Huffington Post waxes lyrical:

Social media is turning into a way for brands and companies to market themselves and appeal to every aspect of the industry, especially teenagers and young adults that are scrolling through sites every hour of every day looking for the cutest and edgiest trends...

... social media has given the world a new way to shop and be interested in clothing. Bloggers are taking over, and will be the new generation of advertisement for every item, from household and food, to clothing and accessories. Don't expect us to disappear anytime soon.

If true - and I am not yet wholly convinced of the total economic impact - that only addresses the positive. A JD Power study into positive and negative impact says:

The study finds a correlation between overall satisfaction with a company's social marketing efforts and consumers' likelihood to purchase and their overall perception of the company. Among highly-satisfied consumers (satisfaction scores of 951 and higher on a 1,000-point scale), 87 percent indicate that the online social interaction with the company "positively impacted" their likelihood to purchase from that company. Conversely, among consumers who are less satisfied (scores less than 500), one in 10 consumers indicate that the interaction "negatively impacted" their likelihood to purchase from the company.

So the delta between positive and negative is 77 percent? Wow. But then it makes a lot of sense. We constantly moan about poor service at banks, telcos and the like yet we won't/don't do anything about taking corrective measures.

Maybe brands know something of which the rest of us are blissfully unaware. Maybe they know that deep down, people are lazy. What do you think? Take the poll:

[poll id="6"]