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Monterey County, California Hotels Accused of Price Gouging;
Super 8 Rates Jump to $250 per Night for Race Weekend

By Victoria Manley, The Monterey County Herald, Calif.
Knight Ridder/Tribune Business News

Jun. 27, 2005 - A three-day motorcycle race at Mazda Raceway Laguna Seca next month is shaping up to be such a big draw that some area hotels and motels are being accused of price gouging.

The Red Bull U.S. Grand Prix, round eight of 17 in the MotoGP World Championship series, is expected to bring 100,000 spectators to Monterey County July 8-10. Those not familiar with racing events likely have never heard of the MotoGP, but fans say it is the Super Bowl of motorcycle racing.

"We are going to attract a lot of people who have never been here before," said Gill Campbell, Laguna Seca's general manager.

So much money will change hands that some area businesses have sought coaching on how to handle the windfall, and some may not be handling it well. Race fans for weeks have been accusing some area hotels of overbooking rooms, canceling long-standing reservations and inflating overnight rates.

There have been so many complaints that a small group of hotel managers met recently to discuss how to avoid negative publicity for the entire industry so the event will return as scheduled for the next four years.

"This is a reputation issue," said Brenda Roncarati, president and CEO of the Monterey Peninsula Chamber of Commerce. "People are complaining."

Roncarati and other industry leaders are defending most of the businesses, saying they didn't mean to overbook rooms but instead underestimated the impact of the MotoGP. It was announced in August that the race was coming back to Monterey, and the Peninsula's 12,000 hotel rooms reportedly were booked by October. The complaints started surfacing in January.

Some hotels reportedly canceled individual reservations to make room for large groups, including some of the companies sponsoring race teams or other components of the event. Some switched reservations to sister properties farther from the track. Some fans say they were quoted rates four times the standard published rates.

To ensure that Peninsula hotels don't become labeled as profiteers, a committee of hotel managers is working with Roncarati and other industry leaders to develop a set of policies and best practices for future events.

They're counting available rooms in surrounding areas and are talking with area schools about using their parking lots and dormitories during future events.

"We're going to use the whole weekend to figure out how to handle the event next year," she said. "We want to keep people on the Peninsula."

Laguna Seca officials held a forum recently to coach business owners on how to properly capitalize on the eager fans. They passed out event paraphernalia and suggestions, such as paid parking spaces for motorcycles, curbside services, later hours to accommodate European dining habits, and racing decorations.

"If you show that your business supports these race fans," they told the group of 50 or so, "they will support you."

Homeowners are also looking to get in on the action. Several dozen homes are being advertised for rent during the event. Costs for one-bedroom rentals posted on the Craigslist Web site range from $275 to $3,000. Hotel and event packages are being offered on eBay for as much as $3,500.

"Monterey County has a very bad reputation in the country for price gouging to race fans," Campbell said. The Laguna Seca manager said she understood one "lower-end" motel chain had tried to charge $980 for a suite.

A group from MotoEuro magazine said they were priced out of their usual place, Super 8 Motel in Marina. Larry Williams, the magazine's president, said his company booked four rooms at $149 per night shortly after the race location was announced.

He said the motel called back in January with a new rate of $750.

"This is a little excessive," Williams said. If those kinds of prices continue in future years, he said, "the event will go somewhere else."

The motel denies it ever confirmed Williams' reservation, and said it hadn't even set its rates until last month.

"There was a very brief time... that we had two-bedroom units available," said Arvie Brautingan, the motel's operations director. "But then we closed them right back and said, 'Nope, that's not the right price.'" Most of Super 8's rooms are sold out, though some single rooms were available for July 8 for $250 per night. The July 6 price for the same room is $69.

A two-room suite available for $160 on July 6 is advertised at $595 for July 10.

It's simply "the function of supply and demand," said Carl Thompson, the motel's owner.

"I don't think that's out of the ordinary. We're all in business to make money."

But to David Morro of San Francisco, who recently lost his reservation at a Peninsula hotel, "it's like, after the MotoGP craze hit, they decided, 'We can get a lot more money than what we're getting now.'" Morro, 54, said he booked a room in September. About two weeks ago, he said, the hotel called him with bad news.

"They don't have room for me anymore," he said Friday. He was offered a room at an affiliate in Scotts Valley about 45 miles away, as well as a free breakfast and one free night.

"I want to know how they decide who has to go," Morro said. "Is it based on when you made the reservation, or is it based on how important you are?"

RoadracingWorld.com, an Internet magazine that follows the sport, has created an online complaint form for the upcoming race. Some potential Peninsula visitors have complained about being booted out in favor of large race-connected groups.

"I am one of the many in the motorcycle community who was ignobly stripped of my hotel reservation," Douglas Frederick, president of motorcycle product promoter Vir2L Studios LLC, said in a letter to Red Bull, which he posted to the Web site.

"You can be sure that motorcyclists and motor sport enthusiasts will be very disenchanted with this unfair treatment and unacceptable business practice, and will measure your brand and activities accordingly. You can be sure this news is traveling swiftly and through broad circles.

"We deserve our rooms. We planned ahead."

At this point, the closest available rooms appear to be in San Jose and Paso Robles, but Roncarati said there may be some in Gilroy and San Juan Bautista.

Followed most closely by European race fanatics, MotoGP follows 21 racers from various countries on a tour around the world. Other rounds this year are being held in China, Turkey, Australia, Malaysia and elsewhere.

MotoGP was last held at Laguna Seca -- and the United States -- in 1994. Laguna Seca has signed a five-year contract for the event, beating offers from Indianapolis and Atlanta.

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To see more of the Monterey County Herald, or to subscribe to the newspaper, go to http://www.montereyherald.com.

Copyright (c) 2005, The Monterey County Herald, Calif.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com. CD,

 
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