The 2010 accommodation price scorecard

Friday, March 26, 2010

Johannesburg - Research shows that 74 percent of all accommodation establishments in the country are charging reasonable prices, said Minister of Tourism Marthinus van Schalkwyk on Friday.

The department commissioned auditing firm Grant Thornton to investigate allegations that some accommodation providers were hiking prices excessively for the 2010 FIFA World Cup.

The survey found that half of all establishments will not be charging additional premiums.

The survey found that price premiums are a normal occurrence when big events are hosted in a country or city. It found that during these times, normal economic principles of supply and demand come into play.

Van Schalkwyk expressed his satisfaction that the majority of accommodation establishments in South Africa are "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."

In areas such as Gauteng, the survey found that more establishments are charging higher premiums.

The survey found that 65 percent of the province's establishments were charging over 50 percent 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 the North West, 53 percent of the establishments were charging prices 50 percent over the high season rate while 53 percent of Durban establishments are charging premiums higher than 50 percent compared to 7 percent of establishments in the rest of KwaZulu-Natal.

Van Schalkwyk said his department will continue to discourage excessive premiums when these do occur, saying he has already consulted with the tourism industry in this regard.

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, industry will encourage membership of the 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," said van Schalkwyk,

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.