Navarre Beach hoteliers are balking at a solicitation by New York-based Tough Mudder Inc. to pay commissions of 15 percent on rooms they book for the scheduled April 9-10 event in Milton.
The initial Santa Rosa County Tourist Development grant application from Tough Mudder was for $120,000. At the Nov. 5 TDC meeting, director Julie Morgan referenced a conference call between herself, Commissioner Rob Williamson and representatives from Tough Mudder where Williamson ‘negotiated’ a direct spend of $80,000. In addition, Williamson recommended making an application to the Florida Sports Foundation for a grant of $30,000, requiring a $60,000 spend from the county for advertising the event. However, the TDC made a motion at the meeting to cap the spending at $20,000. In deference to the TDC, county commissioners voted to spend nearly the amount Tough Mudder had asked.
Despite already being promised more than $100,000 by Santa Rosa County to subsidize the event, Tough Mudder has sent contracts to several hotel and condominium-rental companies specifying its fee in return for advertising the two-day endurance contest that’s expected to draw thousands of participants and spectators.
Moreover, Tough Mudder wants the hoteliers to offer discount rates, set aside a block of rooms for the event and provide one out of every 20 rooms free of charge to guests. The organization claims they are ‘partnering’ with local accommodations for the event. Kate Fitzpatrick, Sr. Director of Community and Venue Development said, “We are only contacting Santa Rosa County lodging partners. Part of that contract will be certain stipulations, including a 15 percent commission.”
Laurie Gallup, owner of Navarre Properties Inc. and a member of the county’s volunteer Tourist Development Council, said she doesn’t really need help from Tough Mudder in April, around spring break, to fill rooms. “And there are no cheap rooms on the beach in April.”
Liz Horton, a marketing manager at Wyndham Hotels Resort Quest in Navarre told a reporter, “I just don’t know that this is in the best interest of Wyndham Resort Quest.” She explained, “Spring break is the last week in March and the first week in April. It’s really the entire month of April. I just don’t know that we need to give any discounts this year.”
News to Commissioner Lynchard
Learning about Tough Mudder’s proposition to hotels from the Navarre Press, County Commission Chairman Lane Lynchard wrote in an email, “I don’t know the details of any arrangements they are trying to work out with local hoteliers.” But he said if such fees are in return for “listing on a Facebook page or website” that it “seems to me for the hotelier just like any other advertisement.”
But hoteliers say they think Tough Mudder is already receiving ample payment from the county, with most of that money coming from tourism taxes they collect from guests.
Tough Mudder is gearing up for a sizable revenue stream aside from the county and hotel money. Pricing for participants in its military-style obstacle course is scheduled to be roughly the same in Milton this year as in the company’s Las Vegas event in October: $99 to $109.
Still, Lynchard said, Tough Mudder deserves support from the business community because “over 2 million people participated in Tough Mudder events throughout the country, including 4,200 in the one-day event in Santa Rosa” last year.
Quoting Tough Mudder’s statistics
While Lynchard is quoting numbers from an Economic Development Report on the 2014 Tough Mudder in Santa Rosa, the document published by San Diego State University actually relied entirely on figures provided by the company.
According to the report, Tough Mudder based its estimate of a $6.1 million economic impact for Santa Rosa County on written responses from 712 attendees.
The $4,000 cost of that report was also paid with public funds from tourist taxes as approved by the Tourist Development Council as part of the agreement to woo Tough Mudder here last March, according to TDC meeting minutes.
Yet some hoteliers are dubious about the report, which states that the event was responsible for about 4,100 hotel room nights last March. A room night is defined as one hotel room sold for one night.
“I don’t know how you’d verify that,” Gallup said. “I don’t know where they stayed but I didn’t notice much of a bump in March here on the beach.”
Better numbers next time
But next April Tough Mudder may be able to better document its impact if hoteliers agree to the company’s contract. It calls for them to keep track of guests who stay with them in connection with the event.
In return, Tough Mudder promises to promote the participating hotels on its website and through emails to participants who sign up and buy tickets ahead of time.
The company is also promoting Tough Mudder events in nearly 50 other markets between April and November of next year.
Meanwhile, according to news reports in Maryland and New York, the company is facing litigation involving allegations surrounding the death of one participant and the amputation of another’s leg.
A Tough Mudder spokeswoman reached Monday in New York said both of those cases are still ongoing and she couldn’t comment on them.
Yet Lynchard asserted his confidence in the event’s value, stating to the Navarre Press in an email, “If you want to spin this event into a negative for the county that is your choice, but please don’t forget the positives.”
At the TDC meeting Kyle Holley said, “Tough Mudder is a $30 million company and they host 30 events per year.” Horton asked, “They get $1 million – what do we get?”
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