You Should Visit Strasbourg

Moneybox
A blog about business and economics.
June 19 2013 10:35 AM

The Town Where European Parliament Waste and Dysfunction Will Get You a Bargain Vacation

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Place Kléber in Strasbourg.

Creative Commons photo by Jonathan M.

In general, when you have hotels in a location with a strong seasonal-demand peak the existence of the peak season subsidizes guests during the off-peak season. The availability of windfall peak-season profits induces construction of hotel capacity, and then since the marginal cost of hosting a hotel guest is low, off-peak prices are really cheap. That said, the normal problem with off-peak vacation travel is that you don't want to go someplace in the non-peak season. Costal Maine is lovely at the height of summer, but in March—meh.

But in my recent trip to Europe, I discovered an amazing vacation bargain opportunity provided to you by the waste and dysfunction of European Union institutions. It's all about Strasbourg, France.

Strasbourg is a really nice small European city. Its historic core is beautiful and the entire area has been proclaimed a UNESCO World Heritage Site. It sits right by the Franco-German border and historically has been much-contested territory. That gives you nice wines, good beer, some of the best sausages I've ever had, and an awful lot of pretzels. Neat town. But attractive towns in Western Europe tend to be very expensive to visit. And here's where the European Parliament comes in.

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The vast majority of the time, the European Parliament is located in Brussels with the rest of the major EU institutions. But as a sop to France and to history, 12 times a year it holds a four-day plenary session in Strasbourg. And the European Parliament is a big institution with well over 700 members. So approximately once a month, thousands of MEPs and staffers and others assorted hangers-on (journalists, European Commission staff, people from national governments, lobbyists) need to decamp to Strasbourg for a three-night hotel stay. This is a huge waste of everyone's time and money. But for our purposes, the important thing is that it creates insane week-to-week price swings in the hotel market because Strasbourg is not a large place. The hotel my group stayed at charges literally double during plenary sessions.

Many people's instincts is to look at that kind of pricing scheme and see the high on-peak charge as "gouging" and the low off-peak charge as the "real" price, but it's important to see that that's not the case. Hotels have high fixed costs (you need to build them) and low marginal costs (it's just a little extra housekeeping). The ability to charge sky-high prices during plenary sessions encourages the construction of lots of hotel capacity. That leaves the town with massive excess capacity when parliament isn't in town. That means prices that should be real bargains compared with what would be charged in a comparably appealing city that doesn't host a wandering parliament. Consider checking it out next time you want to go somewhere. Just make sure to pay attention to your calendar and go during a week when parliament isn't in session. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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