Price gouging taken in stride at Comdex show

Thursday, Nov. 18, 1999 | 11:28 a.m.

Somewhere between free enterprise and ruthless price gouging lies the economic realities of Comdex.

This isn't the e-commerce that thousands of computer whizzes have been discussing in panel discussions and keynote speeches at Las Vegas' largest trade show.

It's the everyday costs of goods and services behind the five-day stay of more than 200,000 people for the 20th annual computer show.

It's hotel rooms that cost three times what they normally go for. It's $4 hot dogs and $3.50 soft pretzels. It's vending machines that dispense 20-ounce drinks for $2.50 -- up from $1.25 from the same machine at the same location a week before Comdex. It's parking that's usually free going for $20 a car.

Is it price gouging or is it savvy business people charging what the market will bear?

"The way I look at it," said Vy Pham, a Bellville, N.J., man attending Comdex, "is that I can buy a drink here or I can go out somewhere away from the convention center.

"By the time I buy the drink and consume it, I'll be hot again from the walking and need another one."

With the purchase justified, Pham dug deep into his wallet and emerged with two $1 bills and two quarters and stuffed them into the vending machine in the lobby of the Las Vegas Convention Center.

"It's just what you have to pay at a convention," he said as the machine swallowed the currency.

Next to the soda machine was a food dispenser. Bags of potato chips and a bag of two cookies were going for $2 each. Candy bars had a $1.50 price tag. The machine looked well stocked, as if it had not gotten much business by the end of the day.

The vended soft drinks were sold at the same price as the drinks at the snack wagons and delis on the convention center grounds staffed by Aramark Corp., the exclusive caterer for the convention center. Those carts have the high-priced hot dogs and pretzels.

The company operates with the philosophy that it is providing a service for conventioneers who have to eat and drink on the run between meetings. The convenience of having food so close when traffic prevents fast getaways to local eateries is what the consumer pays for.

Other vendors have similar philosophies and charge what the market will bear, especially when demand is high.

The Las Vegas Hilton has deflected some criticism by refining its parking policy. But for those used to driving into any Hilton lot and parking for free, a sign announcing a $20 charge is irritating.

Hilton spokesman Alan Hopper said the policy was instituted to prevent the hotel from being taken advantage of and to prevent Comdex delegates from filling the lots while loyal local customers were turned away.

"We were trying to deter them (Comdex delegates parking in the lot), but we found that most of them are ready, willing and able to pay the 20 bucks," Hopper said.

And there are remedies for locals who want to park there. Hopper said holders of Barron Club cards can get a refund. So can people who have a receipt from a transaction at a store or restaurant on the property or who buy tickets to Star Trek: The Experience. Hotel guests get the parking charge knocked off their room bills.

Hopper said the Hilton and other Las Vegas properties don't take raising rates during Comdex lightly. The process involves a lot of study, he said.

"It's like airline fares," Hopper said. "When the demand is great for them, they run higher. When a hotel is down to its last 15 rooms, it may try to sell them for $200. For example, right now (Wednesday), we still have rooms available for $89."

Hopper said demand is actually down from previous Comdex shows, so hotels have offered large blocks of rooms at rates lower than in previous years. Comdex show manager Bill Sell pointed that out to attendees to drum up interest.

In the biggest Comdex events, about five or six years ago, the show drew up to 220,000 people. And, while there are fewer people attending, there are more hotel rooms to accommodate them.

"Many times, our location works against us because we're not on the Strip," Hopper said. "Comdex is one example where our location works in our favor because people are willing to pay a little extra to stay at the only hotel that is next to the convention center."

Hopper concurs with the Las Vegas Convention and Visitors Authority that it's important to be good hosts to Comdex because many delegates will either return because they had a good time or not come back because they were turned off by anything from bad service to price gouging.

"These are the kinds of problems we like to have," Hopper said. "We prefer to be in the hospitality business and rather not charge higher room rates or for things like parking, but in rare instances, we have to to provide a better experience in all 3,174 rooms for all our guests."

One of the Hilton's sister properties has had similar adjustments for Comdex.

Bob Dowd, a spokesman for Paris Las Vegas, said occupancy has run about 95 percent during the Comdex show and rooms that normally sell for $129 have gone for $309 a night.

But Paris is still basking in the glow of being a new facility. The crush of Comdex hasn't been as big as the large numbers of people who have come for the hotel's grand opening in late summer and subsequent weeks when the curious have come around to take a look at the property.

Dowd said the $259 room rate includes some extras designed to keep guests close to the property after the trade show floor closes.

Each Comdex guest receives a coffee and croissant to go in the morning, complimentary tickets to the top of the Eiffel Tower and two-for-one coupons for the "Jubilee" production show at Bally's, which usually cost about $60 apiece.

The Riviera hotel-casino, one of the closest properties to the convention center, has the same strategy with a different tactic -- an abundance of adult entertainment aimed at Comdex delegates.

"We're jam-packed," said John Neeland, publicity manager for the Riviera. "Our Fantasy Review show and our restaurants are big draws. This is our fifth year for the Fantasy Review. And, as for the restaurants, everybody's got to eat."

Neeland said location is key to the Riviera's success, since many delegates walk to the convention center from the hotel every day. And, because of the proximity of the parking garage, the Riviera has had to resort to a parking charge this year. The hotel gets $10 per car.

Some resort experts have theorized that hotels bump up the rates at Comdex to compensate for the conventioneers' unwillingness to spend much in the casinos. Some say the computer experts are smart enough to realize the house has an edge in every game and don't play in casinos as much.

LVCVA statisticians are aware of the market profile of Comdex and note that their delegates won't spend as much per attendee as, say, rodeo visitors.

Comdex conventioneers also have a bad rap for tipping. But the group isn't completely uncharitable.

Tuesday night, more than 5,000 Comdex participants paid up to $50 apiece to attend the Micrografx Chili for Children Cook-Off at the MGM Grand hotel-casino. The event, in its ninth year, raises money to help locate missing children.

Last year, the event raised more than $200,000 and over the life of the program, it has raised $3.4 million.

Comdex also is a supporter of the National Cristina Foundation, a program for companies to donate equipment they consider obsolete to people with disabilities, students at risk and economically disadvantaged children.

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