Airlines, hotels make killing on annual Berkshire hoopla in Omaha
As investors have been making plans to attend the event that Berkshire Hathaway's chairman, Warren Buffett, calls the "Woodstock for capitalists," airlines are asking four times the normal rate for round trip tickets, which means New Yorkers will pay more to visit Omaha for the May 1 meeting than London, Rome or Barcelona.
NEW YORK — A nonstop airline ticket from New York to Paris on the first weekend in May costs $1,142. A Continental Airlines flight to attend Berkshire Hathaway's annual shareholder meeting in Omaha, Neb., the same weekend: $1,433.
As investors make plans to attend what Berkshire Chairman Warren Buffett calls the "Woodstock for capitalists," airlines including Continental and Delta Air Lines have been raising prices for that weekend.
They're asking four times the normal rate for round-trip tickets, which means New Yorkers will pay more to visit Omaha for the May 1 meeting than to visit London, Rome or Barcelona.
Continental has added one flight from the New York area on April 29 and three on April 30, said airline spokeswoman Mary Clark. Attendees who bought tickets earlier paid less for their seats, she said. Now, the carrier is demanding a premium for the seats that remain.
"There does appear to have been high demand," Clark said. "Since many of those fares have already been sold and there are very few seats left, the seats that are left are at the higher fares."
Last year, even as the threat of swine flu kept some shareholders away, a record 35,000 people flooded Omaha's Eppley Airfield, packed the hotels and swarmed the city of 439,000.
Three days of events this year start with a reception at the Berkshire-owned Borsheims jewelry store April 30 and conclude with steaks at Gorat's and Piccolo Pete's, two eateries where Buffett pledged to appear May 2.
Visitors to Paris that weekend could watch the May Day parade from the Place de la Bastille, see Leonardo da Vinci's Mona Lisa at the Louvre or take a boat ride on the Seine past Notre Dame Cathedral.
The horse-chestnut trees bordering the Champs Élysées typically bloom in May, while classical musicians stage twilight concerts at the Jardin du Luxembourg.
The Berkshire investors will fill the Qwest Center arena to listen to the "Oracle of Omaha," as he takes questions on investing, politics and the economy for more than six hours. Extracurricular activities may include visits to former President Gerald Ford's birth site, the Freedom Park Navy Museum, and the world's largest indoor desert, according to the city's Convention & Visitors Bureau.
"Paris and London, all those cities are so boring," said Mohnish Pabrai, the founder of Irvine, Calif.-based Pabrai Investment Funds, who has attended every annual meeting since 1998. "Omaha is where all the action is. Why would you ever want to be in Paris on May 1?" he said. "Nothing compares to Omaha."
Investors hoping to fly nonstop from New York to attend all the events Buffett has scheduled would need to buy a ticket from Continental that leaves New Jersey's Newark Liberty International Airport on April 30 and returns May 3. The economy-class fare is $1,433, including taxes and fees, according to Continental's Web site Tuesday.
Two weeks later, the same round trip to Omaha costs $309 in coach, according to the Web site. Nonstop flights from New York's LaGuardia on Delta are sold out on April 30. The remaining coach seats on an April 29 nonstop Delta flight from LaGuardia cost $1,188, according to the airline's Web site.
"Any event that draws additional demand from our customers is good for business," said Kent Landers, a Delta spokesman. "Whenever possible, we will add seats to make sure we can accommodate as many customers who choose to fly Delta as possible."
Rick Seaney, CEO of Farecompare.com, said airline-ticketing systems raise prices automatically based on the need for seats; employees can review the demand and increase prices further.
If the company added flights, it would incur extra costs while driving down the cost of the tickets, he said.
"It's probably easier for them to charge $1,200 or $1,500 for that round trip than it is to bring another plane in and charge $600, because they end up making the same amount of money," Seaney said.
When the computer detects that seats are selling out, "it raises the price to the highest level of a price ladder," he said.
Marriott Omaha charges $269 a night during the meeting, 23 percent more than its normal rates, said Paul Tunakan, the hotel's director of sales and marketing. "We sell out for the next year four days after the event is over," he said.
"The entire hotel is a who's who — all these hedge-fund managers and well-known investors, authors," said Pabrai, 45, who's staying at the Marriott. "Just sit in the lobby for a couple of hours. It's like being at the Oscars."