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Winston-Salem, Greensboro and High Point Hoteliers Under
 the Gun for Abusive Hotel Rates During
 Furniture Markets

By Richard Craver, Winston-Salem Journal, N.C.
Knight Ridder/Tribune Business News

Oct. 14, 2005 - High Point's mayor warned Triad hotels this week that they must lower room rates for International Home Furnishings Market visitors or watch their guests switch to rival Las Vegas.

Mayor Becky Smothers sent a sharply worded letter to the managers of 107 local hotels expressing concern about hotel rates for market visitors that can be more than three times normal rates. The market officially opens Thursday in downtown High Point and is not open to the public.

Smothers said Thursday that her letter was prompted in part by "a barrage of criticism and demand from change" from participants at the High Point market since the Las Vegas market debuted in late July.

"Without exaggeration, I can tell you that, unless hotel/motel rates are lowered, we will see a continued drop in attendance and steady erosion of the High Point market's prominence," Smothers wrote.

"On behalf of all citizens in the Triad and the state whose lives are enriched by this significant business event, you must lower your rates. Do not shoot the goose who laid the golden egg."

Allen Joines, the mayor of Winston-Salem, said he agreed with Smothers that "it is a public and private sector responsibility to make market participants feel welcomed here, and not taken advantage of."

Smothers said she chose such an aggressive approach with her letter because the stakes are that high when it comes to how Triad hospitality groups price their services to market visitors.

The High Point market attracts 70,000 visitors to each show and generates $1.7 billion in annual economic impact, according to a study by the University of North Carolina at Greensboro.

Meanwhile, Las Vegas officials said its first show was attended by 62,000 based on pre-registration and on-site registration figures. Las Vegas also is considered by industry officials to have clear advantages over High Point in accommodations and after-hours activities.

"Las Vegas has changed the playing field for the High Point market, including for Triad hotels," said Bob McCoy, the president of the Winston-Salem Convention and Visitors Bureau. "There's nothing that will compel you to change more than a realistic threat, and High Point certainly has one now."

The chambers of commerce in Winston-Salem, Greensboro and High Point are encouraging their members to be more visibly supportive of the High Point market.

The chambers begin Tuesday a "Welcome Home, High Point market" campaign that includes greeting market visitors at Piedmont Triad International Airport.

"The communities' response to our newsletter has been phenomenal," said Gayle Anderson, the president of the Greater Winston-Salem Chamber of Commerce. "In less than 24 hours, we completely filled our (greeting) time slots at PTIA and gave out our entire supply of posters."

Smothers' letter singles out hotel rates for price concerns.

But the High Point market has been criticized for years for generally high hospitality costs, whether its $160-$250 hotel rates, $100-plus fees for car rentals, specially priced restaurant menus, and $20 parking rates.

Hotel officials often compare the market with being the host site of the Super Bowl or a political convention, where room rates also rise significantly.

"While I recognize that many in your industry rely on market traffic to insure that your bottom line is healthy, I am telling you that you have to share the gravity of this situation with your owners and investors," Smothers said.

Many participants don't feel they get a real bang for their hospitality buck, especially if the service doesn't improve with the rate increase.

"High hotel rates that border on price gouging are the single biggest issue that I hear retailers complaining about, and they usually use the word 'abuse' in their complaint," said Britt Beemer, the chairman of America's Research Group of Charleston, S.C.

The N.C. Attorney General's office has never received a formal complaint about hotel price gouging in High Point, spokeswoman Noelle Talley said yesterday. "They may complain to the headquarters of the chain they stayed at in High Point, but they haven't complained our way," Talley said.

The High Point market has built its reputation as a place where serious business gets done, where most participants work long hours and just want a nice meal and a bed at the end of the day.

The market also had, until recently, the economic advantage of having a captive audience of exhibitors and retailers because of having 12 million square feet of home furnishings on display.

But that advantage is shrinking in a consolidating industry, where companies are sending fewer people to High Point and importers are providing more than half of the wooden furniture on display.

Industry officials said that in five years, when Las Vegas' market size could be close to High Point's, hospitality issues may play the leading role of which becomes the preferred market.

Smothers said that the International Home Furnishings Market Authority has made "tremendous progress" in addressing some price issues. But she said that more needs to be done.

Smothers said that the authority held a meeting in August that was attended by about 60 Triad hotel officials. Following the meeting, just 14 hotels, including two in Winston-Salem, agreed to lower their rates for the fall market.

"That response, while welcome, is clearly unacceptable," Smothers wrote.

Tim Loughman, the managing director for Twin City Quarter, said that the new downtown Marriott and Embassy Suites have held their market rates in line with those of the old Adam's Mark even though the company just completed a $28 million renovation that includes new restaurants and other amenities.

"There's some sense of nervousness in the local hotel industry about the future of the market, not only about Las Vegas, but also about the potential shift of the market dates to March and September," Loughman said.

"We plan to be as flexible as possible. But there needs to be more dialogue so that we know as soon as possible if those market dates change so we can adjust our bookings."

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To see more of the Winston-Salem Journal, or to subscribe to the newspaper, go to http://www.journalnow.com.

Copyright (c) 2005, Winston-Salem Journal, N.C.

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.

 
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