Tuesday, August 3, 2010

“Hotels, not full for WEG, may lower prices for rooms” plus 1 more

“Hotels, not full for WEG, may lower prices for rooms” plus 1 more

Hotels, not full for WEG, may lower prices for rooms

Posted: 03 Aug 2010 12:48 AM PDT

Hotels in Lexington and the surrounding counties have doubled and, sometimes, tripled or quad rupled their rates for the Alltech FEI World Equestrian Games. But as fewer people than originally expected buy tickets to the Games, hoteliers might have to choose between empty rooms and lower rates.

About 60 percent to 65 percent of Fayette County's 5,000 to 6,000 room nights are reserved Sept. 25 to Oct. 10, when the Games will be held, according to John Johnson of Short's Travel, the Games' official housing bureau.

The problem is that many hotel managers thought Games spectators would fill 100 percent of their rooms for the 16 days of the event, he said.

"There would have to be a perfect storm for that to happen," said Johnson, executive vice president of Short's.

Available hotels are asking for payment in full or at least a 75 percent non-refundable deposit before taking reservations, and daily rates are steep: $331 for a Hyatt Place room at Hamburg, $525 at the Marriott Griffin Gate, $499 at the Crowne Plaza and $225 for the Super 8 budget motel.

Hotels are still likely to sell plenty of rooms during the "peak dates" of the Games, Sept. 29 to Oct. 3, when three of the major competitions take place. But Johnson said the housing bureau is working to develop packages to sell rooms for more lightly attended days.

And some properties are simply going to have to lower their rates.

"I've had this conversation with select hotels: 'You're not selling because of rate,'" Johnson said.

Paul Coomes, an economics professor at the University of Louisville, predicted for a March study on the potential economic impact of the Games that occupancy would be around 90 percent. At that time, he predicted demand would spill over into Cincinnati-Northern Kentucky, Louisville, Frankfort and Shelbyville. He said at the time that he was "surprised" by the room rates.

Derby rooms pricier

Still, the markup on Lexington hotel rooms for WEG pales in comparison with what Louisville hotels charge during the week leading up to the Kentucky Derby.

Stacy Yates, vice president of marketing communications for the Louisville Convention & Visitors Bureau, said a three-night package at the upscale Brown Hotel, including gifts and a Sunday breakfast, listed for $3,450 last year, or $1,150 a night. A similar room in August was $199 a night.

Even a Days Inn near the Louisville airport was charging $240 a night for Derby weekend, while a room during August ran $60 a night.

Of course, most Derby spectators come for only a couple of days. WEG lasts more than two weeks.

Charging what the market will bear during high-demand events such as WEG, Derby or a UK home football game is not considered price gouging, which is against the law. Gouging comes into play only during emergencies, such as charging triple for brooms, shovels and bleach after a flood.

Convenience versus price

WEG has sold 276,000 tickets, but that doesn't mean a quarter-million people will come to Kentucky for the Games. A ticket must be purchased for each event attended. So, one person might buy tickets to several events. Games organizers said they still hope to sell 500,000 tickets, or attract about 300,000 people.

No matter how many tickets are ultimately sold, the dilemma for WEG-bound consumers is whether to pay higher rates in Lexington or lower rates in surrounding areas: convenience versus price.

In Lexington, rooms tend to be pricier than those in smaller surrounding cities such as Nicholasville and Richmond that are farther from the Kentucky Horse Park, where the Games will be held.

The Holiday Inn Express in Nicholasville, for example, has a daily rate of $285 during the Games, while the Holiday Inn Express in Lexington is $350 a day. The Super 8 motel in Richmond is $140 during the Games, while Lexington's Super 8 is $225.

The Rev. Larry David McCormick, a Columbia University religion professor who blogs about dressage, is paying $289 a night at the Country Inn and Suites in Georgetown. The total cost of his stay, which had to be paid upfront, was $2,230, he said. McCormick said he reserved early because of fear about room availability.

$40 for a cot in church

Responding to concerns about affordable lodging, WEG officials have posted information about staying at the National Cadet Training Center, the former Millersburg Military Institute, where the 10-room Army Cadet Lodge offers rooms for $99 to $129.

In addition, barracks rooms are as little as $50 a night for two to 10 people in each room. The Millersburg facility is about 28 miles from the Horse Park

Some WEG volunteers might be staying at Lexington churches, such as Imani Baptist on Georgetown Road, where it will cost $40 a night for a cot or air mattress, and guests must bring their own linens.

Lexington hotels had a run of reservations several weeks ago when the prices of WEG tickets dropped. And they hope they will again.

"We're all trying to stay positive," said Zedtta Wellman, the manager of Gratz Park Inn, who said she is waiting to see how many reservations she gets before deciding whether to lower rates; Gratz Park Inn is charging $425 for a double room.

"I think a lot of people have waited until the last minute because of the economy," she said.

Mike Curd is the manager of the Hilton Suites at Lexington Green and current president of the Bluegrass Hospitality Association. He says his hotel is about 90 percent booked, with rates of $349 for a room with two beds.

"At this stage we'd like to be completely sold out," he said. "I think we're talking about possible rate reductions to get them completely sold."

Plenty of rooms

David Lord, president of the Lexington Convention and Visitors Bureau, said he thinks some travelers haven't planned their fall vacations yet. And, by the time they do, prices might come down.

"Minimum stays have already been reduced considerably," he said. "I think we'll see the rates start to lower."

And, he said, "The worst thing is for people to think that rooms are not available."

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Lodging cancellations estimated at $15 million due to SB 1070

Posted: 03 Aug 2010 05:54 PM PDT

PHOENIX — First they were canceling in protest of the state's new immigration law.

But now the reason organizations are avoiding Arizona for their conferences and conventions may be strictly business.

That's the assessment Tuesday of Kristen Jarnigan, spokeswoman for the Arizona Hotel and Lodging Association.

"They're just worried about their attendance,'' she said. "It's because of the controversy. They don't want to book in a destination that's going to cause them any risk.''

Specifically, she said the fear of some groups is that their individual members may decide they'd rather not come to — and spend their money — in Arizona.

The latest figures put direct losses to hotels at $15 million.

Jarnigan called that figure very conservative. She said the Sheraton in downtown Phoenix recently reported it has lost $9 million alone in business because of fallout from the legislation.

"In all reality, that number is probably quadrupled,'' she said.

And that number covers only what the hotels would have collected directly from guests for rooms. None of that, she said, covers what conventioneers would have spent in food, clothing or entertainment while in Arizona.

In each case, Jarnigan said, the bottom line is SB 1070. But less clear, she said, is how the law figures into the decision.

At first, Jarnigan said, the cancellations were a direct response to the Legislature approving and the governor signing the law. That was driven, in part, by calls to boycott the state, including a now-abandoned push by Congressman Raul Grijalva.

Now it's different.

Some of it, she said, is the negative publicity about the effects of illegal immigration. That includes safety fears, fueled in part by comments by Gov. Jan Brewer on national TV about headless bodies found in the desert.

"It certainly doesn't help us attract more visitors,'' Jarnigan said.

But the bigger issue, she said, appears to be that organization members just don't want to be hassled because of the new law.

Jarnigan said she got a call Tuesday from a Boy Scout leader from Houston who is bringing his troop to the Grand Canyon.

"He is concerned because nine of them are Hispanic,'' she said. "He didn't know if he needed to carry their birth certificates. He was worried for his kids.''

And that is nearly a week after a federal judge barred the state from enforcing key provisions of the law.

Jarnigan said meeting planners, who make money based on convention attendance, have a tendency to be averse to risk. She said they would much rather relocate a conference than jeopardize the event.

"People just want to wait until the whole controversy dies down,'' Jarnigan explained. She said it's just easier for them to book the conferences elsewhere.

Questions have been raised about various claims of losses.

Byron Schlomach, an economist at the Goldwater Institute, said he does not doubt that SB 1070 has had an effect on tourism and conferences. But he cited the overall national and state economy, saying that also has to be factored in.

Jarnigan, however, said that $15 million figure is based on direct reports from member hotels and resorts whose employees have been told by meeting planners and others that the reason they are pulling out of Arizona is directly related to SB 1070.

In fact, she said, some groups actually have given up their deposits to be able to move their meetings elsewhere.

She acknowledged that only a portion of that estimate of lost dollars — she can't say exactly how much — is attributable to "firm bookings,'' where the groups already had signed contracts to come.

The balance, said Jarnigan are what the industry calls "strong tentatives,'' where an Arizona site either had a verbal commitment or, at least was in the top three final choices where the talks had gotten down to specific numbers of people and money.

"What that number doesn't track are all the people that are not even considering us right now."

The problem, according to Jarnigan, is not confined to the Phoenix area.

"We've had some significant cancellations in Tucson and in Sedona as well,'' Jarnigan said. One Sedona resorts, she said, told her association that a single conference that moved elsewhere lost the facility $800,000.

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