Germs, economics, and a stripper, too

The germ sleuths at our Department of Public health deserve credit for cracking the case of food poisoning that sickened a bunch of folks at a Saipan Grand Hotel banquet on June 17. It turns out that the intestinal creepy crawly culprits weren’t hatched in the hotel’s kitchen, but were, instead, hauled in by banquet goers who wanted to add a home cooked element to the affair.

The event surely sent the hotel’s management reaching for the Rolaids, since when the story broke we all heard about “food sickness” and the “Saipan Grand Hotel.” Even though the tainted food wasn’t the hotel’s fault, it’s not a happy juxtaposition of phrases from a Public Relations standpoint.

As the event unfolded, I wondered if hotels would simply ban outside food from their premises for banquets and such. And, they did just that, as the Hotel Association of the Northern Mariana Islands unveiled an announcement to that effect yesterday.

Like any business decision, hotels are up against a balancing act of costs vs. benefits.
Is there a cost to banning outside food from banquets? There certainly is. The cost is the reduced demand the hotel will face for its banquet facilities, since banning outside food will reduce the utility of the banquet to the consumers.

Economics serves up a constant dish of this word “utility.” We can think of it as value–actually, “value” is a pretty rotten word, but it’s as close as I can get…which is why we like the term “utility”: it’s precise, even though it’s bloody well impossible to explain.
You’d expect this kind of rotten situation in a topic known as the Dismal Science. Ah, economics.

Back to costs. The cost of diminished utility to consumers is the diminished demand for the product being offered to them, and, consequently, a lower price for the product and less of it sold (the product, in this case, being banquet facilities). Note, like most costs, this one is invisible. Nobody mails you a bill for lower demand. You can’t see it. You can’t touch it.

On the happier side, consider the benefits to a hotel of the HANMI policy. A hotel is now better able to protect its brand (i.e. its good name) and further ensure the quality of the food being served. If you’re invited to a banquet at a nice hotel here, you can (in theory) place increased confidence in the fact that the food you scarf won’t send you scrambling for the Pepto Bismol.

(Consumer note: my eight ounce bottle of the pink stuff is priced at $4.52, which, per ounce of weight, probably rivals the price of palladium. I don’t remember buying this bottle, but at such prices I’m sure I was under extreme gastrointestinal duress at the time…ah, the tropics.)

Still glowing in the happy aspects of the benefit side of the equation, it’s reasonable to assume that the increased “quality assurance” angle will be increase the utility of the banquet product to guests, and, by extension, to the hosts themselves (who are really the customers at issue here).

In sum, then, we’ve got benefits (that are impossible to measure) that counterbalance (to an unknown degree) the costs (that are–what else?–impossible to measure).

Of course, as in anything these days, the lawyering angle must lurk in the shadows, too. I’m sure there are fears of liability in cases like this, and the HANMI policy will hopefully help allay those in the future.

Mired in the dog days of summer, I’d like to spice things up and throw a banquet for me and my buddies. Something that validates our depth of character and demonstrates our commitment to the loftiest realms of social interaction. Hmm….do you think Club Jama will let us bring our own beer?