NM attorney general sends cease and desist letters to hotels on price gouging

The sun sets a burnt orange in Roswell on Tuesday, June 18, 2024 due to smoke from the South Fork and Salt fires. (Leah Romero / Source NM)

Attorney General Raúl Torrez has made good on a pledge last week to investigate alleged price gouging at hotels where victims of wildfires in Southern New Mexico sought shelter. Torrez issued cease and desist letters to six properties last week.

The letters went to five Roswell hotels — Baymont by Wyndham; Clarion Inn; Days Inn; Holiday Inn Express & Suites; and Home2 Suites by Hilton — and one in Artesia, the La Quinta Inn and Suites.

Torrez says complaints came from customers, but also hotel employees.

“What we heard is that a number of these hotels, many of which are connected with national and indeed internationally branded hotel chains, unjustifiably raised rates on consumers who were fleeing the fire in the course of an emergency under a mandatory evacuation order,” Torrez said.

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He added that there are allegations of reservations being canceled, then when customers tried to rebook the same room they found the price had doubled.

The letters demand hotels stop engaging in any actions that violate the New Mexico Unfair Practices Act. Torrez said state consumer protection laws prohibit unconscionable trade practices. These include practices that are “grossly unfair to consumers who cannot engage in the normal course of business.”

“I think most people would agree that they would under these circumstances,” Torrez said.

It also includes practices that result in buying a good or service where the value is not commensurate with the price.

Torrez emphasized that these are allegations. The Attorney General’s office will interview customers, as well as hotel owners and employees, and pull market and historical data.

“If we determine that a violation has occurred, we will engage with the owners of these hotels and their corporate sort of managers, give them an opportunity to resolve our claims and make whole the consumers who have been harmed,” he said.

If they choose not to do that, Torrez said his office will file an action that could result in a $5,000 civil penalty per violation.

One of the hotel owners, Parth Shah with Clarion Inn and Suites, told KUNM his property did not engage in the accusations outlined in the letter. He said the hotel actually gave guests fleeing the fires discounts on the normal pet fees, and in some case waived them entirely.

KUNM reached out to the other hotel managers named in the letters and left messages, but has not heard from them. We will update this story if they respond.

Torrez said he already anticipates potential fraud that may show up in other ways in the wake of the South Fork and Salt fires when assistance funds from the Federal Emergency Management Agency begin flowing and insurance companies pay claims.

“You get fly-by-night contractors who descend on the community. They take down payments for construction jobs, and then they just leave and walk away,” he said. “These types of traumatic events and emergencies attract swindlers.”

Last week he said there were plans to open a satellite office in Ruidoso. But he also said New Mexico should have stronger consumer protection laws when there are emergency disaster declarations and he plans to pursue that with the Legislature in the next session.

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