2010 hotel prices ‘mostly reasonable’

29 March 2010

Seventy-four percent of South African accommodation establishments are charging reasonable prices ahead of the 2010 Fifa World Cup™, according to a specially commissioned survey by auditing firm Grant Thornton.

The survey was commissioned by the government following allegations that accommodation providers were hiking prices excessively to take advantage of the expected massive influx of tourists for the World Cup.

‘Supply and demand’

The survey found that half of all South African establishments would not be charging additional premiums. It also found that price premiums were a normal occurrence wherever big events were hosted worldwide, driven by the standard economic principles of supply and demand.

Tourism Minister Marthinus van Schalkwyk said on Friday that he was satisfied that the majority of South Africa’s accommodation establishments were “acting responsibly”.

“I am also pleased to note that the survey found that many operators do recognise the damaging impact that exorbitant accommodation prices will have on the legacy objectives of the 2010 World Cup.”

Higher premiums

In areas such as Gauteng province, the survey found, more establishments were charging higher premiums.

The survey found that 65% of Gauteng’s establishments were charging over 50% above the high season rate of the standard price for accommodation during the event. This was found to be in establishments closer to stadiums.

In North West province, 53% of the establishments were charging prices 50% over the high season rate, while 53% of Durban establishments were charging premiums higher than 50%, compared to 7% of establishments in the rest of KwaZulu-Natal.

Van Schalkwyk said his department would continue to discourage excessive premiums where these did occur, saying he had already consulted with the tourism industry in this regard.

Code of conduct

For its part, the industry has committed unequivocally to take further steps. A code of conduct for major events will be rolled out. In addition, the industry will encourage membership of its industry associations in order to extend their reach and influence more stakeholders.

“Given the fact that South Africa is a robust free market economy, fans are encouraged to shop around and avoid establishments with exorbitant pricing in line with our desire that South Africa continues to remain a value-for-money destination,” Van Schalkwyk said.

The respondents to the survey were accommodation establishments in all nine provinces and included hotels, guest houses, bed and breakfast establishments, lodges, camping and self-catering facilities. A total of 2 479 responses were analysed.

Source: BuaNews