Minister of Tourism details probe into hotel prices

{ Posted on Aug 13 2013 by B-man }
Categories : Travel news

There will be an official and thorough probe of tourist accommodation prices in South Africa. The investigation will be conducted by Grant Thornton, one of the leading business consultancies in South Africa.

The details were announced yesterday by the Minister of Tourism, Marthinus van Schalkwyk and he expects the results in three weeks.

Van Schalkwyk said: “There has always been a common understanding between government and the tourism industry that inflating accommodation prices during the 2010 FIFA World Cup will be detrimental to the sustainability of the industry beyond the event.

As a destination, South Africa is known to suit tourists’ pockets and the Department of Tourism intends to protect that reputation.

At every one of the engagements with stakeholders in the tourism industry since 2004, Van Schalkwyk has reiterated that price-hiking could be harmful to the reputation of the South African tourism industry.

“South Africa is a value-for-money destination and this reputation should be safeguarded. Price-hiking could damage the reputation of our tourism industry. However, at the same time it must be kept in mind that June and July 2010 will be high season in South Africa and tourists should not expect the normal low-season prices for that time of the year,” Van Schalkwyk said.

“However, in recent weeks we have noted allegations that accommodation establishments in the tourism industry are not responsible and are inflating prices excessively. Until now our impression has been that this is not the case, but we believe it should be investigated and the results of the investigation made public.

“I therefore believe that as a responsible government we should conduct an independent and scientifically sound survey to avoid a case where perceptions are created based on anecdotes. The Department of Tourism has therefore appointed Grant Thornton to conduct such a survey. We have also requested them to benchmark South African accommodation prices against those of other nations that previously hosted the FIFA World Cup,” Van Schalkwyk said.

The Department of Tourism has noted that in many cases where very high prices are cited, these prices are for private apartments and houses that are being rented out to individuals or groups, often in some of the most high-end neighbourhoods in the country. This phenomenon does not represent the tourism industry in general (tourism businesses such as hotels, guest houses, etc.). Furthermore it must be kept in mind that these prices are determined by supply and demand and the government cannot interfere in the functioning of the market in this regard.

Van Schalkwyk said: “Of course there will always be establishments which take chances during events such as the 2010 World Cup and we have always discouraged and will continue to discourage this kind of exploitation where it occurs. We believe this survey will assist us in getting to the bottom of the allegations. As soon as the survey is completed, which is expected to be in three weeks’ time, I will discuss the outcomes with the tourism industry.”

The Department of Tourism believes South Africa has enough accommodation available for all the visitors expected for 2010 and is now primarily focusing on providing a variety of services to these tourists.

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