TAMPA — A crowd of hotel managers gathered in the ballroom of the Wyndam Tampa Westshore on Wednesday expecting a routine update on plans for the 2012 Republican National Convention in Tampa.
Instead, a new convention contractor delivered a shock: Hotels are expected to throw out year-old room contracts with the convention's Republican organizers and sign new agreements with lower room rates.
"There were a couple hundred folks in the room slightly gasping,'' said Ron Alicandro, general manager of the Westin Tampa Bay. "We've all got signed contracts. None of us can understand it.'' Pinellas hoteliers got the same message at a meeting Thursday in St. Petersburg.
Organizers for the August 2012 convention recently hired onPeak, a "housing bureau'' that manages hotel room blocks for conventions and other big events.
Looking at industry data and the local market, the company found the contract rates needed to be adjusted, said Ken Jones, CEO of the 2012 Tampa Bay Host Committee. Organizers want delegates and other visitors to have a positive experience and that includes not being overcharged for a hotel room.
"Our No. 1 priority is to make sure this is as affordable an experience as possible to all the 50,000 visitors we're going to welcome to the Tampa Bay area," said James Davis, a spokesman for the Committee on Arrangements, the convention-planning arm of the Republican National Committee.
"We want to find rates that are good for both parties, all the visitors as well as the hoteliers,'' said Davis.
The deals struck with hotels a year ago were made by Republican staffers no longer working on the arrangements committee.
Last year, the Committee on Arrangements' spending under then-Republican National Committee chairman Michael Steele was running far ahead of the pace seen for previous conventions, something that alarmed some GOP officials.
At the time, the RNC said one reason for the early spending was its decision, based on recommendations from previous convention managers, to speed up the process of picking a convention city and making arrangements.
Accelerating the schedule gave the Committee on Arrangements the ability to make key decisions, including locking down hotel space, far ahead of the usual schedule, a GOP spokesman said at the time. Although the Committee on Arrangements, with help from Tampa Bay & Co. and Visit St. Pete/Clearwater, handled the negotiations, it was the host committee that signed the contracts.
But after Steele was ousted in January, new RNC chairman Reince Priebus fired Steele's hand-picked advance team in Tampa within 48 hours of his election.
About 100 hotels from Pinellas and Hillsborough contracted with the host committee in August 2010 for more than 15,000 rooms for at least five nights of the convention. The host committee asked hotels to commit 90 percent of their rooms.
Rates were based on formulas agreed on by convention officials and hotels, said Bob Morrison, executive director of the Hillsborough County Hotel Motel Association.
Now, hotel executives worry their rooms will bring in much less cash. Not only do convention officials want to cut hotel rates, a fee hotels pay to help cover convention operating costs would jump from $30 per room to 10 percent of each guest's hotel bill.
That would cut revenues to the TradeWinds Island Resorts in St. Pete Beach by $150,000, said president Keith Overton. The property already set a bargain $158 nightly rate, he said, and won't budge from the contract price.
"We did everything by the book,'' said Overton. "We didn't inflate our rate at all. I don't have any flexibility.''
And what happens if hoteliers say no, they'll stick with the contracts already negotiated?
"I haven't heard a hotel tell me that yet," Jones said, "so until we do, we'll just have to cross that bridge when we get to it."
Contact Steve Huettel at email@example.com or (813) 226-3384.