Lodging complaints

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GUESTS WALK past a bronze sculpture in the main lobby of Grouse Mountain Lodge in Whitefish. The hotel is one of several Whitefish lodging properties that haven’t joined the Whitefish Convention and Visitors Bureau because the organization requires lodging members to pay 1 percent of their total gross receipts as an annual membership fee. Craig Moore/Daily Inter Lake


Whitefish hotels upset over tourism bureau's membership fees

The Daily Inter Lake

The Whitefish Convention and Visitors Bureau is at the center of a firestorm about membership requirements deemed excessive by a number of Whitefish hotels.

The criticism has left bureau officials scrambling to defend their mission of promoting Whitefish as a travel and recreation destination to the rest of the world.

Dissatisfaction with the bureau's membership requirements began more than a year ago as the organization made plans to expand and devised an ambitious plan to raise more money for marketing and administration and leverage its bed-tax revenue.

Early last year, Grouse Mountain Lodge executives approached the bureau with a proposal for more modest budget and membership-recruitment goals that would garner broad-based community support, but their suggestions were largely cast aside, said Janet Gideon, director of sales for Grouse Mountain Lodge.

The lodge hoped to negotiate a "less grandiose" marketing plan that would have a better chance of being funded, she said, but was told the decision had been made to move forward with an expanded marketing program.

"Grouse Mountain supports the concept of a visitors bureau," Gideon stressed, "… but we think the leadership is wrong and has caused some nontrust issues."

Grouse Mountain Lodge is the largest contributor of bed-tax revenue to the Whitefish Convention and Visitors Bureau, she said, yet hotel administrators weren't involved in the creation of the bureau's bylaws or its reorganization a year ago.

The hotel also contributed heavily through the years to a partnership group that consistently bolstered the bureau's budget. That partnership included Grouse Mountain and Kandahar lodges, Big Mountain Resort, Whitefish Lake Golf Course and Glacier Park International Airport.

"We really helped with cooperative efforts to do PR," Gideon said. "They seem to have forgotten that."

The partnership group was abolished when the new membership structure was adopted, requiring lodging properties to contribute 1 percent of their total gross receipts to become a WCVB member.

THE ISSUE surfaced again last week when a letter - sent in October to Mayor Andy Feury by Grouse Mountain Lodge partner Tim Grattan - was published in the Whitefish Free Press. Rocky Mountain Lodge General Manager Dennis Drumheller and Pine Lodge General Manager Rick McCamley also signed and endorsed Grattan's letter.

In the letter, Grattan asked the City Council to review the bureau's policies, namely the 1 percent of total gross receipts requirement in exchange for membership. The council approves the bureau's budget.

"The WCVB Executive Committee misguidedly and cavalierly advises the Whitefish properties merely to pass the 1 percent cost on to our guests," Grattan stated, saying that the 7 percent state bed tax and 2 percent Whitefish resort tax are already a heavy tax burden and "make the Whitefish properties even less competitive from a marketing standpoint than the Kalispell properties that pay only the 7 percent."

Grattan also told the city he's concerned that the bureau has "essentially been taken over by a small 2-3 person group with their own agenda."

"This small clique has alienated and attempted to strong-arm longtime WCVB supporters and contributors to such a degree that they have virtually undone in a few short months what the WCVB has attempted to build over the years," Grattan continued.

GRATTAN'S accusations are not true, said Jan Metzmaker, who was hired in July as the bureau's first paid full-time executive director.

"We're doing what the city has asked us to do," Metzmaker said. "It's all very well-controlled and looked at."

She pointed to increased resort-tax revenue as a measure of success. More people are coming to Whitefish to stay, eat and shop, and Metzmaker thinks the upswing in numbers of visitors is tied directly to the bureau's efforts.

"This is nothing new," Metzmaker said about the membership structure. "I called Jackson Hole and other resorts and they raise millions" with similar membership fees.

Rhonda Fitzgerald, a Whitefish innkeeper who chaired the bureau until its expansion last year and currently is vice chairperson, said she and others spent nine to 10 months interviewing prospective members and asked them specifically, "Where's your comfort zone?" in contributing to the bureau.

Fitzgerald likewise stressed that the proof of WCVB's effectiveness is reflected in increased resort-tax revenue.

"The numbers aren't lying," she said. "Our businesses are all better. We're up, we're able to have higher [lodging] rates in the winter."

Whitefish lodging properties collected $518,363 in bed taxes last year, up 15 percent from 2005. The fourth quarter of 2006 was up 19 percent, at $70,721.

"These are very strong increases that show the benefit of the WCVB marketing program," Fitzgerald said.

The ultimate goal, Metzmaker said, is to increase the bureau's ability to promote Whitefish. To that end, the bureau typically has about 100 articles published each year in national publications and brings in travel writers, all in the name of promoting Whitefish.

THE WHITEFISH Convention and Visitors Bureau was born in 1998 when the resort town broke away from the Flathead Convention and Visitors Bureau. For years Whitefish had contributed its state bed-tax money to the Flathead group, but community leaders thought that not enough emphasis was being placed on Whitefish and its attractions, so it opted to run its own bureau.

The Whitefish bureau operated as a committee of the Whitefish Chamber of Commerce until a year ago, when the City Council made the bureau a volunteer committee of the city and appointed its board of directors.

The city's bed-tax allotment - roughly $57,000 this year - is a big part of the bureau's approximate $100,000 annual budget and remains a vital pool of public money for the group. The bureau has projected it could potentially triple its annual budget through private memberships.

Metzmaker's $40,000 annual salary is paid largely with private collections, Fitzgerald said. The bureau contracts with Lisa Jones for publicity, and Jones gets more than $60,000 a year for services that include bringing travel writers and national media to Whitefish.

The City Council approved a $76,250 budget for the 2006-07 fiscal year, but that's only the public portion of the bureau's budget that includes bed-tax revenue.

"The private dollars are kind of a work in progress," Fitzgerald said. "It's a flexible thing."

MEMBERSHIP in the Whitefish bureau is voluntary, but Grattan and Gideon said that Whitefish hotels are deprived of group discounts - such as Big Mountain lift-ticket discounts - if they don't join the bureau.

"Grouse Mountain has worked in partnership with Big Mountain for years," Gideon said, "but for [Big Mountain and WCVB] to tie a benefit to a membership is wrong. It shows an ulterior motive."

Metzmaker maintained the discounts are "a benefit we want to give our members."

According to Metzmaker, "We know there are those who won't join and will ride the coat tails of others, but in the long run, this will be a good organization" that business will want to be a part of.

Grouse Mountain and the other hotels that supported Grattan's letter have not joined, Metzmaker said.

"We thought the discounted lift tickets was a carrot," she said. "Grouse Mountain thought it was a stick."

Gideon estimated that Grouse Mountain Lodge, with 145 rooms, would pay between $35,000 and $60,000 a year to belong to the Whitefish bureau.

Dennis Drumheller, general manager of Rocky Mountain Lodge, said he believes the lodging properties are shouldering an unusually large portion of the bureau's budget with the contribution of 1 percent of total gross proceeds.

"I think the WCVB's heart is in the right place," he said. "There are just some stumbling blocks."

Rick McCamley, general manager of Pine Lodge, said he remains opposed to the bureau's 1 percent requirement.

"There's no way we'll ever pay that kind of money," McCamley said.

Patty Frey, co-owner of the Whitefish Holiday Inn Express, said she joined WCVB but is "revisiting" her hotel's membership now that she realizes the 1 percent of total gross proceeds will cost her more than $10,000 a year.

"I ditto everything the other hotel [managers] are saying," Frey said. "I have as many concerns as they do."

Frey pays a $1,100 flat rate to belong to the Flathead Convention and Visitors Bureau and said she's happy with the results she gets from the Flathead organization.

"We want to support Whitefish, and we want to be team players, but there are limits," she said.

ALL THREE hotels represented in Grattan's letter also are members of the Flathead Convention and Visitors Bureau, which receives Kalispell bed-tax revenue and operates with an annual budget of about $100,000 a year.

"Our mantra is if one succeeds, we all succeed," said Dori Muehlhof, executive director of the Flathead bureau. "We draw no boundaries and we promote the entire Flathead Valley. Our goal is to be the team player."

The Flathead bureau has members from across the region, including Polson, East Glacier and Eureka. It has 31 Whitefish members among its 143 members.

The Whitefish bureau currently has about 35 members; membership is limited to businesses within Whitefish's 2-mile zoning jurisdiction. An associate membership is available to outsiders, but the business must offer a service or activity that is of "typical or complementary interest to a visitor to Whitefish."

Prospective associate members who offer services or goods that exist in Whitefish may not join.

The Whitefish membership structure outlines a variety of funding obligations. Hotels and restaurants pay 1 percent of gross receipts, defined as a "tourism promotion assessment" by the bureau, while retail businesses pay a tiered rate, depending on size. Financial institutions pay a flat $1,000 fee; grocery and gas stations pay a flat $500 annually, and professional firms pay $200.

By comparison, the Flathead bureau bases its membership on numbers of employees. Small businesses with five or fewer employees pay $250 annually, while larger businesses pay more. Businesses with from 61 to 80 workers pay $1,650 a year. Nonprofits pay $165.

Muehlhof said she would like to see a more cooperative effort between the two bureaus.

"I totally respect what they're doing, but two CVBs trying to do the same thing" can be a duplication of efforts, she said.

THE WHITEFISH City Council did not discuss and took no action on Grattan's letter or earlier correspondence sent by Grouse Mountain to the city.

"I don't believe it ever came up," City Attorney John Phelps said.

There's no protocol or requirement for the city to respond to every letter it receives from residents, he added.

Although the council approves the budget for the portion of public money that comes into WCVB coffers - the state bed-tax allotment - it has no oversight of the private money raised through membership fees, Phelps said.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com

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