Fla. Hotel Charged with Price Gouging During Wilma

November 1, 2005

Florida Attorney General Charlie Crist recently sued a Ft. Myers hotel, charging that it improperly inflated prices to Florida consumers seeking emergency shelter from Hurricane Wilma. This is the first price-gouging lawsuit filed by the Attorney General’s Office related to Hurricane Wilma, alleging room rate increases of up to 108 percent as Wilma affected the state.

The Attorney General’s Office alleges that Apex Hospitality LLLP, doing business as the Wellesley Inn and Suites, charged “unconscionable,” or substantially higher than regular, rates to consumers seeking a safe place during the brunt of the storm.

“During a state of emergency, affected citizens need a helping hand, not a hand in their pocket,” said Crist. “The Attorney General’s Office will pursue price gougers and ensure that Floridians are not being taken advantage of during this great time of need.”

The hotel, located at 4400 Ford Street Extension in Ft. Myers, reportedly increased its room rates after Governor Bush declared a state of emergency for Hurricane Wilma on Oct. 19. Florida’s price gouging statute requires that the cost of necessities like food, water and shelter must remain at the price that was average during the 30 days immediately preceding a major storm like Hurricane Wilma.

The Attorney General’s Office determined that rates at the hotel averaged $61.99 prior to the state of emergency. Investigators learned that the hotel owner raised the room rates to $89.99 when the hurricane was approaching the Southwest Florida coast, and since then increased its rates again to as much as $129.00 – a 108-percent increase over pre-storm levels. Sam Swami, the hotel’s owner, reportedly admitted to investigators that he raised his room rates on Oct. 21 prior to the hurricane coming ashore.

Ft. Myers residents Kristen and Michael Davis evacuated from their home when they lost power and water service, and sought shelter at the Wellesley Inn & Suites. They were reportedly charged $129.00 per night for their room.

Another Ft. Myers resident, Cecilia Murphy, evacuated from her home on Oct. 22 to avoid Hurricane Wilma and was charged $109.00 for her room, a 76-percent increase. The Davises and Murphy said they felt the approaching storm left them no other options for safe accommodations. Investigators found that several other hotel guests also faced substantially inflated hotel room rates.

The Attorney General’s civil complaint was filed under Florida’s price gouging statute and the Florida Deceptive and Unfair Trade Practices Act, which are contained within Chapter 501 of the Florida Statutes. Violations of the price gouging statute are subject to civil penalties of $1,000 per violation up to a total of $25,000 for multiple violations committed in a single 24-hour period. Florida’s Deceptive and Unfair Trade Practices Act provides for civil penalties of $10,000 per violation or $15,000 for violations that victimize a senior citizen or handicapped person.

The Attorney General’s Price Gouging Hotline has already reportedly received more than 300 complaints of possible price gouging associated with Hurricane Wilma. The hotline has also received more than 4,400 complaints related to price gouging associated with earlier Hurricanes Dennis, Katrina and Rita, and has filed two lawsuits against Tallahassee gas stations for alleged price gouging during Katrina. In addition, the office has subpoenaed four oil companies for records associated with gas prices during Dennis and Katrina.

During last year’s record-setting hurricane season, Crist’s office received 8,911 complaints through its price gouging hotline. Following last year’s hurricanes, the office initiated 58 formal investigations and filed 13 price-gouging lawsuits against hotels, generator businesses, tree removal companies and other businesses.

To date the Attorney General’s Office has recovered more than $939,000 in restitution for Florida consumers from settlements and other resolutions. Other investigations and settlement negotiations are ongoing.

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