(Originally Posted by Creeping Jennie on Saturday, 23 May 2015 in Sturgis.com Blogs)
There is no doubt that the law of supply and demand is in full effect during the Sturgis Motorcycle Rally. Prices of things like accommodations, prepared food, and alcohol do increase during the Rally, and it is to be expected.
For years, I have defended the vendors, campgrounds, hotels, and others who provide services and goods to Rallygoers against allegations of price gouging. The cost of doing business increases during high volume periods such as the Rally. Venues and venders must staff their businesses appropriately to serve the influx of customers. Many have to hire temporary employees, and schedule regular staff longer hours. More water, electricity, and supplies are used. Sometimes special permits and equipment must be purchased and utilized during this time. There are other considerations, such as signage, and other miscellaneous items that can and do add up.
There are only a fixed number of hotel rooms in the Black Hills area. Hotels cannot just wave a magic wand and create new rooms out of nothing. Campgrounds are limited to the number of campers they may host, due to considerations such as square footage, toilets, and shower facilities. One thing to keep in mind is that hotels, motels, and campgrounds have a limited amount of time to make enough money to carry the business through the remainder of the year. Yes, many businesses do enjoy a fairly active tourist season, but most in Sturgis and the smaller towns that sit further away from Mt. Rushmore cannot support large hotels or motels outside of the three months of summer. Many places close for the season. This is why room rates fluctuate everywhere, with prices increasing during high demand times, and decreasing during the off season. Most people understand this, but others don't.
Let's remember that Western South Dakota is a tourist area, and tourist season is relatively short. Many "tourist towns" close the doors on the majority of businesses between Labor Day and Memorial Day. The majority of these business owners have other employment to carry them through the rest of the year. These people are not gouging.
Unfortunately, I have been seeing a trend in gouging among locals. These are people who choose to rent out their homes to Rallygoers for the week. Not all local homeowners who rent out for the Rally do this, but there is definitely a trend. Many are charging exorbitant rates for the use of their homes or campers. One incredibly ridiculous offer I saw was for a camper. The owner was charging something like $250 per night for only the use of the camper. The renter would be responsible for finding a place to put it. When questioned on the price, the owner claimed that her price was reasonable, as hotel rooms in the area charge anywhere from $250 to $500 per night, and she had spent a lot of time and money cleaning up the camper and making repairs. Really? Would she come in the middle of the night and clean up the floor and replace the bedding when her guest pukes after too much tequila and a questionable fajita? Will she come running when her guest returns from a day of riding and finds that the air conditioner has frozen over and tripped the circuit breaker? Is she going to deliver an armload of fresh towels? How about room service? Wake up calls? Continental breakfast? On site laundromat? Gym? Will she come empty the black water tank when it gets full? Nope. I'm not sure how she can justify hotel prices for an old, 1970s camper.
I recently saw a post in a rally rental listing group that was explaining why homeowners feel justified in charging stupid amounts of money. An excerpt: "These are homes that the owners have to take out a lot of their own belongings and store somewhere else so that the guests can have room in the home.
Now remember these people are giving their HOME to people they do not even know. The renters are not friends or relatives they are complete strangers and unfortunately there are risks with giving your home to strangers particularly when the home owner is not even going to be there. A lot of the homes rented are very nice expensive homes as well.
Don't get me wrong, most people are trustworthy and good but many are not and thats the risk the homeowner takes and that's worth something.
Another consideration. The home owner has to find somewhere to go! They might rent in a more distant town, stay in a camper or a tent or move in with relatives and if they do they usually share some of the money with whoever they move in with.
So lets say its YOUR home. You do all of this work and expense to prepare, you move out and probably pay to stay somewhere else and you totally hand over everything you own to people you don't know? What would that be worth to you?"
As a local, I had once considered renting out my five bedroom home with a double car garage, nice, fenced in back yard, a nice deck, pool table, and a hot tub. We did consider doing it, and even thought that a price of $1000 for the week would have been fair. I would have had to find a place for me, my husband, (at the time, he has the house now) and our four children to stay. It simply would not have been worth it to me, so I didn't do it. I suppose I could have justified charging $5000 with all the reasons the person had used in her post. I suppose I can now just overlook this whole thing by saying, "If you don't like what people are charging, then be quiet." Sorry, I can't do that. If it's not feasible financially or practically to rent your house out to strangers, then don't do it. If you do, then don't gouge them. Trust me, the vast percentage of Rallygoers are not looking for five star accommodations. They don't care if you bought brand new bedding and towels just for their visit. Most of them are not requiring a garage, hot tub, pool, fenced in yard on a cul-de-sac in a quiet neighborhood. They will not disturb your family pictures, or your kids' bicycles and toys. More than likely, they won't care if your dressers still have your clothes in them. Deep cleaning everything before their visit is not necessary. Just clean the house normally. Make sure there are clean linens and towels.
Don't compare apples and oranges. Saying that a hotel room and old camper should be priced the same is a ridiculous and greedy thing to do. As locals, we should be finding ways to make the Rally more affordable and accessible. Don't kill the goose that lays the golden eggs. Stop gouging our guests.