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Milwaukee Hoteliers Implement "Rack Rates" for
 Harley Celebration; Some Call it Gouging

By Doris Hajewski, Milwaukee Journal Sentinel
Knight Ridder/Tribune Business News

Aug. 10, 2003 - Booking a room for the Party of the Century turned out to be the headache of the century for a New Jersey couple, even though they started the process a year in advance.

Lisa House and her husband, Walter, will have a room at the Ramada Inn South Airport for $100 a night when they bring their Screamin' Eagle Road King to town for the festivities this month.

But the tale of what it took to get that deal may be the worst nightmare story connected to the event so far.

And it shows what can happen when the law of supply and demand collides with efforts of the local tourism industry to preserve Milwaukee's reputation as a place where visitors can have a good time and not get gouged in the process.

It's been a struggle.

With an expected 250,000 visitors heading into town for the lakefront celebration Aug. 31, and some 78,000 rooms around the state earmarked for a week of community and company events, the Harley 100th anniversary celebration represents a golden opportunity for battered hotel operators to boost their bottom lines. Hotel revenue is down 10 percent from 2000 nationally, according to a Chicago hotel consultant.

Some are pursuing that goal a little harder than others, such as the downtown establishment that is asking $250 for rooms that usually fetch $55 -- or the Sheraton Milwaukee Brookfield, which Saturday was quoting rates over the phone from $349 to $499 per night, and requiring a four-night stay.

Lisa and Walter House, seasoned veterans of Harley rides, wanted to avoid that sort of thing. So back in September 2002, Lisa reserved two nights at the Airport Ramada on S. 13th St. for $70 a night, using Ramada's booking system.

But her satisfaction was short-lived when the hotel later reneged on the rate and told her she'd have to pay $140 a night for the rooms, and $250 a night for additional nights that she wanted to add.

After calling everyone she could think of to complain -- from her local paper and TV stations, to Ramada's corporate office in Parsippany, N.J., to the Journal Sentinel and finally the Wisconsin Consumer Protection office in Madison -- House has what she hopes will be a happy ending to her story.

Ramada Airport owner George Krantz said the problems with the House reservation, and others that came in on that day, were due to a computer problem. The bargain rate of $70 shouldn't have been offered for a peak time such as the Harley 100 week, he said.

Krantz agreed to give the Houses a room for four nights at $100 a night. And Ramada corporate promised to reimburse the New Jersey couple for the difference between the original $70 two-night reservation and the current $100 price.

So for all her trouble, Lisa House is getting one of the best deals in town.

"For major events like the Indy 500 and the Super Bowl, there is a premium for the hotel rooms. But I hate to see the gouging where people triple the room rates," said Ted Mandigo of T.R. Mandigo, a hotel consulting firm in Chicago.

Full "rack rates" are the most that hotels should be charging in sellout situations like the Harley event, Mandigo said. The so-called rack rate is the price posted on the door at hotels, and is often as much as double what customers may pay during less-busy times of the year.

Some price gouging is going on, but not a lot so far, said Diane Bozicevich, vice president of corporate operations for Omega Travel. Omega's Mega Housing division is the official booking agency for the Harley 100th. A special accommodations Web site set up for event is connected with a link to Harley-Davidson's corporate site, harley-davidson.com.

"Harley did this so people would not be gouged," Bozicevich said.

Well in advance of the event, Mega Housing negotiated contracts with area hotels. The hotels agreed to allocate a block of rooms to Harley visitors at a set price, and in exchange get referrals from Mega Housing. The top rates in the program are set at $325 for resorts and $185 for hotels in downtown Milwaukee, Bozicevich said.

People involved with accommodation planning for the Harley event say that, even now, it's possible to book a room for the last week of August, even though an Internet search might indicate that hotels are sold out.

The Hyatt Regency Milwaukee downtown was one that still had openings last week for the Harley event. The hotel's Web site was offering rooms during the last week of August for $220 a night, twice the price that was quoted for some other dates this month.

Rooms are filling up in an area described as a triangle, from Fond du Lac on the north, Madison to the west, and as far south as Chicago, event organizers say.

"We are sold out," said Karie Stupek, director of sales and marketing for the Country Inn Hotel and Conference Center in Waukesha. The hotel held back a few rooms for wedding guests, but devoted the rest of the property to Harley riders for the celebration dates.

Hotels aren't the only alternative for Harley visitors.

Campgrounds are the cheapest option. The Riders Ranch in Waukesha, one of the sites in the Mega Housing program, is charging $125 a person for the full week and still has openings.

Private homes are pricier, but they can accommodate larger groups. The going rate for a three-bedroom home or apartment in the Mega Housing program is $3,500 a week. Homes are still available, as well.

Outside the program, last-minute trip planners can still find homes listed in the Journal Sentinel classified ads. Among the five columns of offers last week was an ad from David Kohlmann, a small-business owner who lives in the Town of Cedarburg.

Kohlmann, 50, who owns a 2002 Electra Glide, said he decided to list his 5,000-square-foot, six-bedroom home after talking to the guys at Suburban Harley in Thiensville.

"I thought, 'We should do that," " he said. "We have a big home. We have lots of things here."

Kohlmann and his wife plan to send their three children who still live at home to stay with their friends while eight Harley riders from around the country stay in their rooms. But the couple will stay put, serving as hosts, cooks and companions for their paying guests, who will have the use of the in-ground pool and volleyball and tennis courts. There's enough room on the property to take in some campers, Kohlmann said, in addition to the folks who already have responded to his ad.

Kohlmann is charging a range of prices for his place, depending on exactly what is provided for each guest. The money isn't really the point of his decision to take in the Harley visitors.

"This is kind of a way to make friends," he said, adding that he's already talking about a return visit that he and his wife might make to one of his guests from New York.

Local hotel operators who are holding rates to a reasonable level say that they hope to gain more business in the future by not gouging their customers. They're hoping that the hotels with the highest rates ends up with some empty rooms.

And they're not surprised that the Germantown dentist who is offering to vacate his six-bedroom home for the week for $80,000 hasn't found any takers yet.

But heck, he's offering to provide a chauffeur, cook and maid service, and there are still a few weeks to go before the last-minute rush.

Katharine Goodloe of the Journal Sentinel staff contributed to this report.

-----To see more of the Milwaukee Journal Sentinel, or to subscribe to the newspaper, go to http://www.jsonline.com.

(c) 2003, Milwaukee Journal Sentinel. Distributed by Knight Ridder/Tribune Business News. CD, HDI, HOT,

 
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