Hotels want to leave visitors bureau

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BY ELAINE GOODMAN
Daily Post Correspondent

A group of Palo Alto hotels wants the city to withdraw from the San Mateo County/Silicon Valley Convention and Visitors Bureau, saying they’re not getting enough benefit from the money they’re contributing.

Under the arrangement that began in 2010, hotels pay 15 cents to $1 per room night to the visitors bureau, depending on their size and occupancy. The fees may be added to guests’ hotel bills. The visitors bureau collects about $309,000 a year from Palo Alto hotels and motels.

In exchange, the visitors bureau tries to attract conventions to the area and promotes the region to tourists, including international travelers.

But according to the Palo Alto Hotel Council, a group that formed last year to fight a hotel tax increase in the city, 19 out of 27 hotels in the city want out of the agreement.

“The PAHC surveyed its members as to whether the return on investment merited continuing the relationship,” the group said in a letter to the city. “The majority of the properties decided it was not.”

The letter was signed by Palo Alto Hotel Council founders, Stephanie Wansek of the Cardinal Hotel; Ella Herman of the Garden Court Hotel; and Barbara Gross, former general manager of the Garden Court Hotel and now a hospitality consultant.

Hotel tax increase

PAHC fought against Measure E on the November 2018 ballot, which increased the city’s hotel tax to 15.5% — the highest in the state. The tax had been 14% before the latest hike. The hotel council was worried that the tax hike would drive guests away from Palo Alto hotels and criticized the city for what it called a lack of fiscal accountability.

One hotel that supports continuing the arrangement with the San Mateo County visitors bureau is Homewood Suites by Hilton in Palo Alto.

Matt Dolan, the hotel’s general manager, said in an email to the city this month that withdrawing from the visitors bureau would be “ill-advised, incorrectly aligned with resentment of (hotel tax) increases and counterintuitive considering the downward economic indicators.”

“This is the period of time when robust marketing and sales efforts are necessary,” Dolan said. “I am not in favor of terminating the agreement and for whatever flaws may exist, it is far more valuable than not.”

However, Dolan said he might reconsider if the Palo Alto Hotel Council could show its own plan for promoting the city’s hotels.

In addition to Homewood Suites, one other hotel — the Zen Hotel — said it wanted to continue the agreement with the visitors bureau. Six other hotels didn’t respond to PAHC’s survey, including five of the city’s 10 largest hotels ranked by number of rooms.

The city’s three largest hotels — the 346-room Sheraton Palo Alto, the 195-room Crowne Plaza Cabana and the 184-room Westin Palo Alto — want to withdraw from the visitors bureau agreement.

Chamber receives funds from the agreement

The Palo Alto Chamber of Commerce is in favor of sticking with the San Mateo County visitors bureau. The chamber receives $32,000 a year through the deal for running a Palo Alto-specific visitors center.

“We provide information and referrals, both by phone from all around the country and to walk-ins, to local points of interest, hotels, restaurants, medical care providers, entertainment and outdoor activities, education institutions, realtors and more,” Charlie Weidanz, the chamber’s chief executive officer, said in a letter to the city this month.

The Palo Alto City Council is scheduled to discuss the visitors bureau issue on Dec. 2. The council could vote to remove Palo Alto from the arrangement with the visitors bureau. Alternatively, the council could vote to keep the agreement going, or to continue it for at least another year while seeing if the visitors bureau can respond to the hotels’ concerns.

Dinah’s GM now head of visitors bureau

John Hutar, president and CEO of the San Mateo County/Silicon Valley Convention and Visitors Bureau, said he’s already taken one step to help Palo Alto hotels since he joined the visitors bureau in June. Hutar was previously general manager of Dinah’s Garden Hotel.

Hutar said the visitors bureau domain name, previously www.visitsanmateocounty.com, was changed this month to www.visitsmcsv.com. The previous name “excludes Palo Alto and is not representative of the area we serve,” Hutar acknowledged in a letter to the city.

In a presentation to the Palo Alto Hotel Council in August, the visitors bureau took credit for 18 conventions in Palo Alto in 2018, for a total of 818 room nights and $406,308 in revenue. It estimated the total economic impact of those conventions at $905,500.

The visitors bureau also hosts “fam” tours to familiarize tour operators with the area. For example, tour operators from Paris who visited in September were taken out to lunch at Saint Michael’s Alley and made stops at Stanford University, the Computer History Museum, and the Googleplex.

Clarification: A previous version of this story identified Yatin Patel of Hotel Parmani as a founding member of the Palo Alto Hotel Council. Patel said he is not a founding member of the group. The information in the story was based on a Sept. 16 letter addressed to the City Council that was posted on the Hotel Council website. That letter has since been removed from that website.