July 14, 2004 - Attendees of the Democratic National Convention have pulled out of hundreds of hotel rooms in Boston's suburbs in recent weeks, leaving executives scrambling to find last-minute guests to fill the empty space.

The Sheraton Ferncroft Resort in Danvers, which had blocked off 328 of its 367 rooms for convention guests, learned last week that convention organizers would take just 50 per night -- potentially costing the hotel more than $350,000 in lost revenue.

Another hotel, the Holiday Inn Boston-Peabody, had expected the Secret Service would take up as many as 100 of its 180 rooms. But hotel executives recently found out the agents and staff would instead be staying closer to the city.

"They just moved all the rooms into the city and left the suburbs holding an empty bag," said Gregg Bolduc, the hotel's director of sales and marketing.

The Democratic National Convention Committee placed a hold on thousands of hotel rooms in the area to accommodate the delegates, media members, and other guests. Corporations and other groups also reserved blocks of rooms to ensure space for employees and attendees.

But as the date of the convention approached, attendees and organizers firmed up their plans. In some cases, they didn't need all the space they reserved; in others, they found accommodations closer to the FleetCenter, where the convention is being held.

The pullouts have hit hotels north of Boston particularly hard, where road closings will mean long commutes into the city. The issue has heightened tensions between Boston and its surrounding areas over who will reap the estimated $154 million in spending generated by the convention, and who will suffer lost business.

Dave Hall, executive director of Peabody's Chamber of Commerce, said businesses in his region initially had expected a boost from the convention, but that many now are "petrified" of the road closings and think it will have far fewer benefits for the North Shore.

"Initially, there was a lot of optimism, because the North Shore is a great tourist area -- a lot of history, a lot of culture," he said. "As soon as the security considerations were announced, people had a more pessimistic view."

The hotels agreed last year and earlier this year to block off large portions of their rooms just for convention guests, though organizers never explicitly guaranteed they would fill the space.

Convention organizers say they gave hoteliers ample warning the rooms might not be filled.

"These hotels knew when we signed the contracts with them that we designated blocks for groups, and the groups could stay there or not," said Peggy Wilhide, the DNC committee's communications director. "The convention-goers want to stay as close to the city as they can. Those rooms go first."

She said organizers try to direct anyone still seeking rooms to some of the suburban hotels.

Some hotels south of Boston had better luck. The Boston Marriott Quincy, which says about 80 percent of its guests that week are linked to the convention, said it plans to make as much money this July as last year, or maybe more. And while other hotels have experienced a slowdown well before the convention, the Quincy Marriott has found business to be brisk, said Cory Chambers, the Quincy Marriott's director of hotel sales. Still, he said the hotel has found that many of its convention attendees are staying only three nights, rather than the five or six the hotel had expected.

As the convention approaches, hotels further from the city are slashing rates, offering discount packages, and are even making an effort to persuade local Bostonians to stay in a hotel instead of in their homes. So far, they said, their efforts have had mixed results.

The Sheraton Ferncroft Resort plans to start a radio advertising campaign today that pitches the hotel as a good spot for locals who want to golf instead of work during convention week. Julie Campisani, the hotel's general manager, said executives also called corporations around Boston to see if they needed meeting space during the week of the convention, but that they largely struck out.

"It's a major financial hit," she said. "We're a convention hotel. They blocked out our rooms, so we weren't able to book any conventions at that time. We're trying to rebound, but it isn't really happening."

Though the Sheraton Ferncroft said it received little warning that the convention would not use its hotel space, the Holiday Inn said it received some warning convention organizers would not need all the rooms they had blocked off. Bolduc, the Holiday Inn's director of sales and marketing, said convention officials first informed him several months ago they would not need about 60 of the Secret Service rooms. Then, about three weeks ago, he said, they decided not to use the remaining 40 blocked-off rooms, either. He still has about 50 rooms blocked off for members of the foreign press, but he said he worries they may find other accommodations, too.

For the month of July, he said the hotel is only about 40 percent booked, compared to 85 percent in years past. He said he has been somewhat successful in attracting other guests. The hotel has knocked down rates to $99 from $129 in hopes of attracting even more people.

"It's a gamble you take going into something like this," he said. "We all understand that. You try to limit your losses. People really thought the DNC was going to come through for them, and that's not the case."

Other business leaders in the North Shore preferred to look on the bright side yesterday.

"There is availability. Now more than ever, you can have a fantastic vacation experience," said Aimee O'Brien-Jeyarajan, director of public relations for North of Boston Convention and Visitors Bureau. "There's plenty of activity. There are great discounts. There is great value to be had."

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