Room at the Inns : Agent’s Overpricing Cost Them Business, Hoteliers Say

The hype came early and often.

The hotel industry was told that soccer’s World Cup, the 52-game international spectacle that opened Friday in Chicago and comes to the Rose Bowl today, would be its chance to cash in on the world’s most popular sport.

But World Cup bookings have fallen short of expectations in the nine cities involved, and some hoteliers now grumble that because of overpricing, their opportunity was booted.

“Official” room rates--for accommodations purchased through the World Cup’s exclusive, for-profit contractor--are in some cases double the price typically available to business travelers and significantly higher than the “rack rate” or the full declared price normally printed on a card on the hotel room door.

“It looks like greed and smells like greed,” said Roland Baumann, general manager of the Hyatt Regency Crystal City, near Washington’s National Airport and 10 miles from RFK Stadium, the venue for five Cup matches.

Baumann said that the 450 rooms he blocked out for sale by the World Cup Accommodation Bureau, the official contractor, were offered at $190 a night--about $40 higher than he expected and far too expensive for his area.

“I have 685 rooms to sell, and I’m selling something like 50 or less,” he said. “With rates more reasonable, we at least would have had a chance at more business.”

A handful of hotels in Orange County, however, were lucky enough to snare World Cup corporate sponsors who are using the sporting event to wine and dine important clients and top employees. The event also is filling rooms at two hotels that are hosting foreign teams.

But the World Cup will not mean additional business for most Orange County hotels and restaurants. The Westin South Coast Plaza, for example, believes its June and July occupancy rates will inch up as it books rooms for tourists who decided to pass on hotels in Los Angeles.

Across the country, the Accommodation Bureau now expects to provide about 500,000 hotel room/nights during the one-month tournament. That’s about half the number of room/nights that originally were blocked out, or committed to the bureau, by more than 600 U.S. hotels.

Los Angeles-area hoteliers say bookings are running at about 50% of the number blocked, but they expect to do far better in the last week of the tournament, culminating in the championship game at the Rose Bowl in Pasadena July 17.

*

As foreign bookings have failed to materialize, the Accommodation Bureau has turned back rooms to the hotels to market on their own to domestic customers. The givebacks have come in stages since December, with some rooms being released as late as this week. In Detroit, Dallas and Orlando, many hotels got all or most of their rooms thrown back and have had to scramble to try to fill them.

An unknown number of additional rooms have been booked outside the official block.

The Newport Beach Marriott Hotel and Tennis Club has booked 500 of its 570 rooms to Mars Inc., the Hackettstown, N.J.-based candy manufacturer. Mars’ Snickers Bar is the official snack food sponsor of the U.S. World Cup team, and the company plans to celebrate that status for four days leading up to the World Cup final.

“We knew more than a year ago that we’d be booked by the Snickers people,” Smith said. “So we didn’t have to wait to see who would be in the finals and if their fans would be coming.”

The Hyatt Newporter is serving as home-away-from-home for the 45-member Romanian team, which has booked 30 rooms for about two weeks. While the hotel is used to booking big groups, it did make some unusual accommodations, such as securing a practice field at nearby UC Irvine and making room in the hotel kitchen for the Romanian’s tag-along chef.

Similarly, the Fullerton Marriott, which is hosting the Colombian national team, has set aside 28 rooms for the brief Cup season. The team is practicing at Cal State Fullerton’s nearby field, and has directed the hotel to make sure that Colombian foods are on the menu.

World Cup USA--the organizing committee--projects that the Cup will generate $4 billion nationwide through foreign and domestic travel and tourism, product sales, media rights fees, corporate sponsorship, game tickets and other items.

*

High room rates are one reason cited by hoteliers and tourism officials for low occupancy. Others include weak economic conditions abroad and the failure of several of the most popular teams to qualify for the 24-team championship tournament.

Of the six teams with the largest retinues of traveling, spending fans, four fell short in the qualifying rounds: Britain, France, Japan and Australia. Fan favorites Germany and Italy made it, but so did some teams with minuscule followings, such as Bulgaria and Morocco.

“I have never said this was going to be 52 Super Bowls,” Jaime Byrom, owner and president of the Accommodation Bureau, said in an interview this week.

Byrom also defended his pricing as reasonable. Hoteliers who signed with the bureau all agreed to supply rooms at 75% of their 1993 rack rates and were told that the bureau would mark the rooms back up to rack rate or a little higher before offering them to foreign tour operators, he said.

The final rate to foreign tourists, of course, would be higher after the tour operators added their own profit margin, Byrom explained, but he asserted that in no case did he charge tour operators more than 8% above rack rates.

Because the Accommodation Bureau does not control the most precious commodity--game tickets--it has no monopoly and is just another competitor, said Sunil Gulati, chief international officer for World Cup USA. With equal access to tickets, tour operators have been free to book rooms in hotels that did not sign with the bureau.

*

But to some hoteliers, that’s precisely the problem. Some hotel and tourism officials say that they were told that there would be a linkage between tickets and official hotel rooms--providing a powerful incentive for hotels.

Byrom said no linkage was ever promised or implied during the year he has been involved with the project.

San Francisco currently expects to sell 25,000 room/nights through the Accommodation Bureau, down from the 188,000 room/nights in the original block, said John Marks, president of the San Francisco Convention & Visitors Bureau.

“We never would have blocked near as many had we felt that rooms and tickets weren’t tied,” he said.

“They (the hoteliers) know we have stuck to the deal,” Byrom responded. “We’ve been disappointed in some cases with the level of demand, but we couldn’t create business where no business could be had.”

*

Times staff writer Greg Johnson in Orange County contributed to this report.

RELATED STORIES: A1, C1

A $4-Billion Kick in the Economy

Based on a USC study, World Cup officials estimate the total economic impact of the nine-city, 52-game event will exceed $4 billion. The estimated impact on each of the cities, in millions of dollars: Los Angeles: $623 New York: $452 San Francisco: $338 Dallas: $266 Boston: $255 Washington: $244 Chicago: $231 Orlando: $209 Detroit: $180 * Note: The total is less than $4 billion because some revenues are not linked to a particular area. Source: World Cup Organizing Committee