Wednesday, December 15, 2010

Hamilton Accommodation Rip-Off?

We note that a spokesman for Hamilton moteliers has added credence to a recent news story about alleged price gouging by accommodation providers over the Rugby World Cup period.

To demonstrate alleged price gouging, the Waikato Times story breathlessly reported examples of tariff over key rugby matches in Hamilton with the Novotel Tainui at $772 per night and the Ibis at $652 per night along with a minimum three-night stay policy.

A Hamilton motel spokesman has been reported as saying that the tariff charged is "a bloody rip-off" and has stated that "motel association members would not participate in price gouging."

It should be of no surprise that our view is that accommodation operators should employ "dynamic pricing" based on consumer demand. And yes this means unashamedly raising tariff over high demand periods. While there are a hard core of Kiwis that believe in the quaint socialist adage that businesses should be evenly rationing goods and services according to consumer need and not demand, we believe that the market should be left to decide value.  

We honestly don't know if Hamilton's Novotel and Ibis are offering value over the World Cup period, however we say "good on them" for sticking their neck out and allowing the market to be the judge by pricing accommodation over a significant world event.

In previous media beat-ups about alleged price gouging over the Rugby World Cup, we note that Hospitality Association chief Bruce Robertson has been quoted as saying:
"Price rises at busy times were "entirely normal" and if rooms were over-priced, hotels would have empty rooms because people wouldn't pay.
The market does actually work"
Hotel Council chairwoman Jennie Langley has commented on overseas tour operators that were inflating accommodation costs by saying: "the market will rule on the day".

Even the national body of the Motel Association of New Zealand has chipped-in with some common sense by commenting: "The market will decide." 

However, it would appear that Hamilton moteliers are sadly aligning themselves with another accommodation industry organisation that up until now has stood alone:

@home NEW ZEALAND is the national bed and breakfast association that is made up of lonely old moccasin slipper wearing, bed wetting, socialist wowsers that struggle to understand the fundamentals of running a business. To prove a point they recently ejaculated the following press release:
“However, as we could foresee this situation happening, we advised our members by general email on 20 April that apart from a slight adjustment to cover proposed increases in GST and other fixed charges, we felt their room rate should not be substantially different to what they would charge during a normal high season period.  I and my board feel that to hike prices excessively during RWC 2011 could cause future damage to the tourism industry both for accommodation providers and for other services reliant on tourism......"
 We reckon Hamilton moteliers are better than this;-)

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