World Cup accommodation prices 'reasonable' - SA minister

GIDEON NKALA
Staff Writer | Wednesday March 31, 2010 00:00

Speaking at a conference held at the glittering Emperor Palace Hotel Convention Centre here, Schalkwyk said the survey was initiated in response to a public outcry at the overpricing of accommodation facilities in South Africa ahead of the world's biggest soccer jamboree that will be held on the African continent for the first time.

While the minister said he had not quite believed 'these generalisations and sound bites', he felt they needed to ascertain the facts, hence the study.

'The research shows that 74 percent of all accommodation establishments in the country are charging a premium less than 50 percent above their highest rate for 2010,' said Schalkwyk. 'Half of all establishments will not be charging a premium at all.'

This survey covered all of South Africa's nine provinces.

According to Minister Schalkwyk, the survey showed that South Africa compared favourably with other cities that had hosted major international events such as Athens for the 2004 Olympic Games and German cities for the 2006 World Cup.

'The global norm is for premium pricing during mega events which create significant demand,' he said. During the 2004 Olympiad, Athens, a small city that hosted one concentrated event, saw actual hotel rates of 260 percent more during the event.

'In Germany, where 12 venue cities hosted the 2006 World Cup, average accommodation rates were 37 percent higher than the same period in the previous year.'

Schalkwyk pointed out that while the figures for Athens and Germany were achieved rates after the event, South Africa was providing its rates ahead of the event and that what is actually quoted in the course of the tournament could eventually be different.

Hotel industry players who were represented at the launch said they had committed to a code of conduct. Representatives of the industry said they were aware of the damage exorbitant prices could have on the legacy and objectives of 2010 FIFA World Cup.

'A code of conduct for major events will be rolled out,' Schalkwyk said. 'In addition, the industry will encourage membership of industry associations to extend their reach and influence to more stakeholders. The main associations will continue with their commitment to take strong steps against price-gouging transgressors.'

The minister informed the conference that there had been a few hotel and accommodation owners who did not want to cooperate and that these transgressors would be dealt with by the industry.

'We will continue to do everything to discourage excessive premiums when these do occur,' said Minister Schalkwyk. 'Given the fact that South Africa is a robust free market economy, fans are encouraged to shop around in line with our desire that South Africa continues to remain a value-for-money destination and avoid establishments with exorbitant pricing.'

It emerged at the launch that Botswana's nearest South African province to the south, the North West, will be one of the most expensive with 53 percent of accommodation centres there charging more than 50 percent more than the highest rack. Limpopo is at 27 percent while Gauteng is the highest at 65 percent.