20100329
allafrica

Johannesburg — THE overwhelming majority, 74%, of SA's accommodation establishments are not hiking rates substantially for the Soccer World Cup, according to a Grant Thornton study issued on Friday.

Tourism Minister Marthinus van Schalkwyk commissioned the study in response to an outcry over perceived price gouging. The survey found 48% of establishments were not charging a premium to their highest 2010 rack rates. Only 26% were charging increases in excess of 50% and 11% more than 100% of their rack rates.

The survey results are based on responses of 2384 establishments across SA and accommodation types. Rack rates are fully priced room rates the industry uses as a benchmark, and are generally higher than average retail prices.

The biggest rise in rack rates was recorded in Gauteng, where almost a third of establishments had raised their room rates more than 100% above their highest 2010 rack rates, while 65% were asking more than a 50% premium over their top 2010 rate.

With 21 matches, 14 team bases, the International Broadcast Centre as well as Fifa and the local organising committee headquarters, there is immense pressure on prices with many fans wanting to be based in Gauteng.

The survey showed SA's price increases were not out of line with Germany's in 2006 and well below those in Athens for the 2004 Olympic Games, when the average premium was about 185% above 2003's peak rate.

"I am satisfied that the majority of accommodation establishments are acting responsibly when it comes to pricing," said Van Schalkwyk. "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."

Graham Wood, MD of Southern Sun and deputy chairman of the Tourism Business Council of SA, emphasised the survey was of asking rates, not paid rates.

"That some establishments are asking hugely inflated prices does not mean they will achieve those rates. The jury is still out whether they will fill their rooms."