Spurred by a group of hotel executives, Palo Alto is considering withdrawing from the San Mateo County/Silicon Valley Convention & Visitors Bureau, a regional organization that has been helping to market local hotels for the past decade.

The proposal, which is being spearheaded by Barbara Gross, former general manager of the Garden Court Hotel, has created a rift in the local business community. Gross and Jim Rebosio, general manager of the Sheraton and Westin hotels in Palo Alto, claim in their request that they have "overwhelming support" from other hotel leaders and point to signatures of support from 19 out of 21 respondent hoteliers to a recent survey. The Palo Alto Chamber of Commerce, meanwhile, is squarely against the withdrawal, which one hotel executive likened Palo Alto's own "Brexit."

In requesting the withdrawal, Gross and Rebosio claim that the hotels are not getting their money's worth from the visitors bureau. Local hotels pay about $309,040 annually into an assessment district that funds the visitors bureau. The San Mateo County Tourism Business Improvement District (TBID) allows local hotels to tack on fees ranging from 15 cents (for the smallest hotels) to $1 (for the largest ones) to hotel bills to support the marketing efforts.

If the City Council concurs with the request to withdraw, it would terminate an agreement that has been in place since March 2010. That's when the council pulled the plug on the city's two-year marketing program, "Destination Palo Alto," and joined the Burlingame-based assessment district.

Now, some are arguing that the arrangement is no longer working. Gross, who currently serves as a hospitality consultant, and Rebosio argued in their letter to the council that many hotels believe that the visitors bureau is no longer meeting local needs. Some reportedly expressed these concerns in January, when bureau President Anne LeClair came to Palo Alto for a presentation. According to the letter by Gross and Rebosio, many hotel owners questioned whether the bureau is generating an "adequate amount of leads" for the Palo Alto market.

Similar concerns came up in subsequent meetings, the latest of which took place on Sept. 18. According to the letter, representatives from many of the smaller properties at that meeting responded that they had "responded to many leads over the past decade (but) yielded nothing in return."

"They expressed concern that given the vast territory covered — San Mateo County plus Palo Alto, and given the lack of Palo Alto specific leads, their responses almost never yielded anything of value," the letter states.

Some of the larger hotels expressed concerns that the visitors bureau is "not a good fit," according to the letter, and that the "rates of Palo Alto properties, especially the larger ones, are too high for the budgets of the majority of leads generated through SMCCVB efforts."

The list of signatories at the bottom of the letter includes 19 hotels, which includes large establishments such as the Crowne Plaza Cabana and Sheraton as well as smaller ones such as Hotel Keen and Oak Motel. Citing broad support, the letter claims that the "majority of Palo Alto hoteliers are voicing their opinion that this partnership has not yielded a return on investment to warrant continued participation."

Rebosio, whose two hotels provide a combined 530 rooms, called the San Mateo County/Silicon Valley Convention and Visitors Bureau is "a great organization." That said, he does not believe that its offerings match the city's needs. Many of the smaller hotels in Palo Alto see no return at all from being members in the bureau, he said. Some weren't even aware that they can add a fee to the hotel bills to pay for the assessments, he said. Instead, they paid the assessments out of pocket.

"The rates in this market versus most of the hotels that the San Mateo County Convention Visitors Bureau represents are not comparable," Rebosio told the Weekly. "They're not marketing to people who are in the price point of Menlo Park and south. It's just not a good fit."

Even though local hotels are comparatively expensive, it's still very difficult to get a room between Monday and Thursday, he said. In a self-sustaining market like that, Palo Alto doesn't need the help of a regional marketing organization like the bureau, Rebosio said.

Not everyone feels that way. Matt Dolan, general manager of Homewood Suites by Hilton, is vehemently against the idea of leaving the regional organization, particularly without another plan in place. The idea, he said, is being driven by Gross and does not enjoy the type of widespread support that its supporters claim, Dolan told the Weekly (Gross did not respond to a request for comment).

Dolan rejected the idea that the city's membership brings no benefits. He cited the visitors guide that the bureau publishes and that gets distributed to local hotels. As members of the bureau, Palo Alto hotels get free cases of visitors guides, which highlights various destinations throughout the Peninsula and Silicon Valley, including ones in Palo Alto. Each guide, he said, is valued at about $3; the guides alone make the tourism fee justifiable.

In addition, the district pays about $31,890 annually for the visitor counter at the Palo Alto Chamber of Commerce, which focuses specifically on Palo Alto services.

"We have access to the visitors guide and the visitors center. We have front row seats to the best show in town and Barbara Gross wants to get rid of it," Dolan said.

Dolan, who chairs the Chamber of Commerce board of directors, said he has refused to sign the proposal to withdraw at the Sept. 18 meeting because he felt it was a bad policy and because he thought the meetings and surveys issued by the Palo Alto Hotel Council run afoul of antitrust laws.

"Anybody can go online and see what hotels are charging, but we can't get together to talk about it," Dolan said. "When a trade association gets together and starts collecting data about rates, clients and business and strategies, that is sharing your operating strategy. That's colluding."

Dolan disputed the idea that there is "overwhelming support" for withdrawing from the district. Several major hotels, including his own as well as Hilton Garden Inn and Dinah's Garden Hotel, have either declined to join the request or did not respond, he said. These three hotels alone represent more than 400 rooms, he said.

He also wrote a letter to the council earlier this month that raised concerns about the leaders of this effort.

"The choice is straightforward," Dolan wrote. Should the community, he asked, "maintain a relationship with a reputable highly functioning organization"? Or should it abandon it in favor of "a loosely defined council without the capabilities, core competencies and financial resources"?

He urged the council to "carefully evaluate" the request to leave the bureau before making any decisions.

"I don't believe Palo Alto needs its own version of 'Brexit!'" Dolan wrote.

Chamber of Commerce CEO Charlie Weidanz also submitted a letter opposed ending the contract. Without Palo Alto's participation in the assessment district, the Chamber would not get the funding it needs for visitor-support services, including inquiries from new residents, visitors and businesses, both already in Palo Alto or looking to locate here.

"We believe our Chamber provides a unique and valuable service to our community as a visitor center and economic development partner for a small amount of financial support which would not be replaced by any current plan or source of funding," Weidanz wrote. "We respectfully request the City Council not recommend cancellation until these matters have been evaluated in full and a realistic plan for mitigation developed."

John Hutar, president and CEO of the San Mateo County/Silicon Valley Convention and Visitors Bureau, also hopes the arrangement between Palo Alto and his organization can be maintained. Hutar, who served as general manager at Dinah's Garden Court before joining the visitors bureau in June of this year, said he had a conversation earlier this year with Gross and Stephanie Wansek, general manager of Cardinal Hotel, about their concerns with the existing arrangement.

Hutar had invited LeClair to give the January presentation. And in August, after he succeeded LeClair, he gave a presentation to local hotel executives detailing the visitors bureau's efforts on behalf of Palo Alto. Hutar estimated that in 2018, the bureau's total economic impact on Palo Alto added up to $1.6 million. The presentation, he told the Weekly, was received well and there were no questions or objections from the audience.

Hutar said it was a two-hour meeting that included an hour of discussion and didn't involve any questions.

"There was dialogue about how we make more of an effort in promoting restaurants in Palo Alto," Hutar said.

Hutar told the Weekly that he has been aware since May that Gross is looking to take Palo Alto out of the bureau. He said the organization has already undertaken several actions to address Palo Alto's concerns, including renaming its website from visitsanmateocounty.com to visitsmcsv.com (the new site went live this month). It has also agreed to do more to support Palo Alto restaurants. This includes working with PBS on a program in late October to highlight a local restaurant, The Sea by the Alexander Steakhouse.

Given the recent efforts, Hutar said he was shocked to learn about the September meeting being held to organize leaving the bureau. He said he has since heard a "narrative" being put out by proponents of withdrawing, suggesting that hotel visitors need relief from the fees because of the 2018 hotel-tax increase. He has not seen any evidence that this is the case. While the region as a whole has seen a dip in occupancy rates, Hutar and Dolan both say this has more to do with factors beyond the city's control, including recent travel bans and trade embargoes with China, and the addition of new hotels.

"It's almost a feeling like there was a decision made and now we're going to create the narrative," Hutar said. "And I wouldn't recommend to any organization, including the city of Palo Alto, to leave the situation without having a ratified, clear plan for how we're going to represent the hotels going forward.

"If there is a contingency plan and an alternative go-plan, that's great! Of course, I wouldn't like it, but it should be discussed. To just not have any representation, it doesn't make sense," Hutar said.