Motel price signs can remain
Following a rebuke by the Federal Trade Commission, members of the South Lake Tahoe Lodging Association on Thursday promised, through a bylaw change, never again to seek uniform restrictions on the display of room price signs.
“Essentially, it’s like a traffic ticket that says we didn’t do anything wrong and we won’t do it again,” said Attorney Dennis Crabb, a member of the association board of directors.
The FTC investigation focused upon a campaign last year by a member of the association to reach a “gentleman’s agreement” among all motel owners not to post price signs in windows.
In January, the FTC requested the association’s minutes following a complaint by someone not involved in the lodging industry, according to Crabb.
After a two-month investigation, FTC officials determined the lodging association unintentionally violated the act.
Price signs have long been a point of contention in the lodging industry. Many lodging owners feel the signs give the community a cheap look and result in price wars. As prices drop, motel owners are not able to afford upkeep and the motels deteriorate, further degrading the town.
In the early 1980s, the city attempted to implement window sign restrictions to target motel price signs but not such things as retail sale signs. The California courts overturned the ordinance because it singled out one type of sign based upon its content.
In other words, if window signs were banned, all window signs would have to be banned.
The city revised its regulation to limit window signs to 25 percent of the window surface without addressing content.
About that time, a similar attempt to achieve a voluntary ban lasted only a couple days before the price signs returned.
The June 1997 effort was spearheaded by Mark Patel, owner of the Tradewinds Motel a member of the lodging association and, at that time, president of the East Indian Association. The later association’s 38-members own several motels in town and also participated in the voluntary ban.
As a member of the South Lake Tahoe Lodging Association, Patel received the encouragement of the city lodging association membership.
In a door-to-door effort, Patel and several supporters received agreements from all but one city motel owner and the signs stayed down for several weeks during the summer.
“From the beginning, nobody did anything illegal,” Patel said in a telephone interview on Thursday. “I’m sorry they (the lodging association) had to go through this.”
The East Indian Association has been inactive for a year and the FTC did not pursue the issue with that organization.
“The FTC took the position that the East Indian Association is not a group in the same sense as the lodging association (which, as a trade organization is subject to the Sherman Anti-Trust Act),” Crabb said.
Wednesday, the lodging association board of directors agreed to amend the bylaws to prevent future actions on the price/sign issue and to report regularly to the FTC.
The agreement contains language to exclude the central reservations system, which puts together packages and requires lodging properties under contract with them to meet certain criteria. The lodging association also will not be prevented from lobbying the city and the Tahoe Regional Planning Agency on future sign ordinance proposals.
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