A 15% service fee charged by The Ritz-Carlton, Charlotte during the CIAA tournament last month has sparked controversy and allegations of racism.
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Erik Spanberg
Senior Staff Writer- Charlotte Business Journal
Jacqie McWilliams stayed at The Ritz-Carlton, Charlotte last month during the Central Intercollegiate Athletic Association basketball tournament. Typically, the hotel choice of a conference commissioner wouldn’t be newsworthy.
McWilliams, CIAA commissioner since 2012, told me Wednesday she ordered room service a few times but never ordered drinks or food in the Ritz lobby. That, she said, explains why the 15 percent CIAA service fee discovered by customers in the lobby bar — and labeled that way on receipts — didn’t catch her attention until social media complaints popped up about the charge.
This week, Harriet Worley, N.C. special deputy attorney general, sent a letter to David Rothwell, general manager at the Charlotte Ritz, seeking details on the service fee “so that we can better understand the nature and circumstances of the surcharge and how it was disclosed to customers.”
McWilliams told me she and representatives from the Ritz spoke Monday on a conference call about the service charge.
The hotel apologized, and the commissioner said she will likely meet with hotel executives in Charlotte within the next several weeks to further clarify what happened and why.
“For me, it’s just making sure I have all the facts before I make any response about what I don’t know,” McWilliams said. “I’ve read a lot of the articles that have been out, whether it was racially motivated or whether it’s just the CIAA. I’m trying to distance myself from that.
“I’m an African-American female, too. So I can take it very personally or I can take it to the business side to manage, and what I’ve chosen to do is be pragmatic and be sure I understand the facts and understand the sentiment of those that are impacted for the CIAA and be responsive. I have a job to make sure that if The Ritz-Carlton doesn’t manage this appropriately, how will the conference move forward? My hope is we’ll resolve it and The Ritz-Carlton will do what’s right.”
For the moment, she is noncommital about whether the CIAA will continue to book rooms at the Ritz during tournament week. The luxury hotel is a short walk from Time Warner Cable Arena, where the men’s and women’s tournament games are played. Last month, the CIAA started a new contract to play the tournament uptown through 2020. The agreement includes a provision for the Virginia-based conference’s headquarters to move to Charlotte.
“The Ritz-Carlton (fee) definitely was a mistake they have to deal with on their national and local level,” McWilliams said. “I have spoken to them. There has been an apology. I’ve addressed the information to our board and also to our sponsors. We will work closely with the Ritz to determine how we’re going to move forward in the future. We would expect that all of our hotels would have some consistent practices that does not expose the CIAA as we were exposed with The Ritz-Carlton.”
In the letter sent to the general manager of The Ritz-Carlton, the state attorney general’s office asks when management decided to impose the service fee, what its purpose was, when the charge was in effect, who was charged, how customers were notified of the fees, what the money collected will be used for and whether similar fees have been charged during other uptown events.
A Ritz spokesperson responded to an interview request with a statement promising to cooperate and “respond in due course.”
Charlotte tourism executives tried and failed to land the CIAA during the 1990s, when Raleigh hosted the annual basketball tournament. The conference of small historically black colleges and universities has built its annual men’s and women’s tournaments, played the same week in the same venue, into one of the most successful college basketball events of the year.
In 2006, the CIAA moved the tournament to Charlotte, lured by the opening of the NBA arena in October 2005. The CIAA has negotiated new contracts to stay here ever since, though Leon Kerry, the previous commissioner, and McWilliams have both cited concerns over what they called exorbitant hotel prices.
As part of the new contract signed last year, the CIAA received assurances from hotels, as well as control over a block of 1,000 rooms scattered among multiple hotels. McWilliams said the cooperation between the conference and local hotels led to lower rates for schools and fans.
Reunions, battles of the bands, step shows and a slew of parties — along with basketball — bring as many as 100,000 fans to town for the week. Spending during CIAA week adds as much as $50 million to the Charlotte economy, according to previous studies by the Charlotte Regional Visitors Authority. The timing is good, too, bringing an influx of visitors happy to spend on food, hotels, drinks and shopping in late February, when tourism business is usually nonexistent.
McWilliams praised Tom Murray, CEO at the visitors authority, for a swift response to the service fees at the Ritz.
Murray, in a written statement to CBJ, said, “While automatic gratuities may be common practice for some hospitality establishments, this language (during the CIAA at the Ritz lobby lounge) was confusing and misleading for CIAA guests. Both CIAA and the CRVA were unaware of this service charge when it was imposed. The experience that visitors have in our destination is undoubtedly a top priority for the CRVA — we strive to ensure the people who come here have positive, memorable visits. Unfortunately, this charge shaded many guests’ experiences and we are incredibly disheartened by that.”
The visitors authority executive went on to say the visitors authority and the CIAA “are partners in the truest sense of the word. Our ten-year collaboration is incredibly important to both parties and we’ll work together to ensure that CIAA guests continue to enjoy the Charlotte region for years to come. Our diverse and inclusive community continues to be a remarkable attribute that we pride ourselves on and we will certainly work to safeguard this distinction to protect the best interests of the visitors that generate billions of dollars in economic impact annually.”
There are 12 schools in the CIAA. Members include Johnson C. Smith University in Charlotte.
McWilliams, who worked for the NCAA before coming to the CIAA, said the goal of the conference is to figure out how and whether to work with the Ritz in the future.
“What we all want to know is, (is) this something consistent you do with all events that take place?” she said. “If you’ve been in the hotel industry or convention industry, there are certain fees that are going to be tacked (on). … That happens everywhere. I think there just needs to be an understanding why you view the CIAA as an additional tax. Why, specifically, name that a tax on the CIAA? Those are questions they’re going to have to not just respond to us, but it’s a much larger issue and concern that’s being dealt with. Hopefully, we’ll have a better understanding in the next week or so of why and then how do we move forward.”
The commissioner said the CIAA must have assurances such a fee won’t be charged again if the conference is going to book rooms during future tournaments. Attendance, spending and economic-impact studies will be completed soon, but, anecdotally, McWilliams said the tournament week went well.
It’s disappointing to have the CIAA service fee charged by the Ritz become the focal point publicly, she added. During her stay at the hotel, McWilliams ordered room service a couple of times, but the CIAA fee wasn’t charged on room service.
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Erik Spanberg covers government, sports business, hospitality and airlines for the Charlotte Business Journal.
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