More Backwards Economic Thinking in Allegheny County

So after a 9-day conference odyssey to both coasts, I returned to a near-empty Pittsburgh airport, and the news that the county plans to raise gate fees in response to US Airways service cuts. Is it just me, or is there an epidemic of backward thinking around here? First, officials spend a ridiculous amount of effort and/or capital trying to woo non-locally owned retail (e.g. Forbes/Fifth corridor), and a non-locally owned casino, and building facilities for sports teams, all of which are at best revenue-neutral for the region, and at worst revenue negative. The casino, when it eventually opens, will certainly take more wealth out of the region than it brings in, as do any profit-making, non-locally owned retail businesses.

Now we have the airport, a county-owned business that’s having trouble selling its services. How does it respond? By raising prices! Under what market rationale does it that make sense? I recognize that they have a budget shortfall, but their goal should be getting airlines to increase operations at the airport, and that’s obviously not going to happen if they increase their rates. What would a privately owned business do? They would: (a) lower prices, (b) cut costs, and (c) take more debt (or, if they’re lucky, investment) to maintain a positive cash position. Meanwhile, they would light a fire under their top salespeople to try and sell more product, with the hope of landing a big contract.  They have a great product — PIT is a very well designed hub airport — it should be an easy sale at the right price.

Some will argue that the airport is desperate and its options are limited, but I have to wonder what PIT officials see for the future?  Do they really think there’s any prayer of replacing US Airways’ business with higher fees?  Do they envision any likely future scenario in which fees would come back down again?  To me the future looks pretty bleak for Pittsburgh air travelers: higher ticket prices, reduced service, and few direct flights to anywhere.


SfN Housing: 500 West

For SfN I’m staying at 500 West, a downtown hotel that advertises its “European” style. Apparently, European hotels have jail-cell-sized rooms, shared bathrooms, really slow wi-fi, and graffiti in the elevator. ;-)

Actually, To be fair, this a “get what you pay for” situation, and the room itself, though small, is clean and well kept, and the hotel is right in the heart of downtown San Diego. I would in fact recommend this place to single travelers looking for a cheap, clean place to crash in SD. 500 West advertises itself as a “hostel hotel,” and it is at least as nice as the best London hostel I’ve stayed in.

The one thing that bothers me, though, is that I reserved the room through SfN’s on-line housing service, and I feel like I was ripped off. A labmate from UTCS reserved a room later through for 30% less than I paid.

Also, the free Wayport wi-fi is excruciatingly slow.