News for the Hospitality Executive
|By Melissa S. Monroe, San Antonio Express-News
Knight Ridder/Tribune Business News
Apr. 1, 2004 - For Irma Reyes, finding a downtown hotel for 18 French journalists proved to be a problem. Most hotel rooms, after all, were sold out for the Final Four.
Her problem grew worse when a few hotels around Loop 410 wanted to charge her double and triple normal room rates. Reyes, who brings in about 250 international visitors yearly for the San Antonio Council for International Visitors, was livid about the price gouging.
One familiar midsize hotel wanted to charge her about $300 a night when it typically has daily rates around $50.
"This is outrageous," Reyes said. "This is the first time I have had this trouble. I'm sure there's a lot of groups and people who have nothing to do with Final Four that are displaced and couldn't get hotel rooms." With the Final Four in San Antonio, nearly all downtown hotels have been sold out. Many hotels throughout the rest of the city are sold out, too.
The ones that aren't are taking advantage of the demand.
Best Western Ingram Park Inn is charging guests about $219 a night during the Final Four festivities. The day after the finals, on April 6, its Web site has rates listed as low as $58.46.
The Hilton San Antonio Airport has rooms going for about $325 per night when the typical rates for many airport properties hover around $100. Even the La Quinta Inn and Suites San Antonio Airport has slightly increased its typical rates, which range from $89 to $129 on its Web site.
DoubleTree Hotel general manager Ron Johnston said supply and demand dictates in any business. He said people will pay the rates as long as they see the value in it, and some folks are paying $99 during the Final Four week because they booked the room in advance.
The Texas Hotel & Lodging Association encouraged hoteliers not to go above undiscounted rates in a memo sent out this week.
According to the memo, a hotelier is prohibited under state law from charging more for a room than the highest daily rate that was posted in that room for at least 30 days prior to the guest's stay. After the 30th day, prices can be increased. Breaking the law is a misdemeanor and could result in jail time and monetary fines.
The extreme price increases -- even legal ones -- don't sit well with local hotel leaders, who say it sends the wrong message about San Antonio when the world is watching. Arthur Coulombe, president of the San Antonio Hotel & Lodging Association, said the few hotels with extreme price increases don't reflect the hotel community.
"It's price gouging and that's how I look at it," said association Chairman Henry Feldman. "This is an opportunity to show off our city and make sure the participants have a wonderful time. Price gouging is suicidal and it hurts the reputation of our great city." Hilton Palacio del Rio general manager Siegfried Richter said because his downtown property is a managed Hilton hotel, it's against its policies to price gouge.
But many downtown hotels, Richter said, aren't getting their maximum rates with the Final Four since they are serving as host hotels. He said the National Collegiate Athletic Association contracted many of the downtown properties far in advance.
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