Cr Melky stands by price gouging comments, TCA lobby disagrees

By ERWIN CHLANDA

 

Councillor Eli Melky is standing by comments he made at Monday’s Town Council meeting about price gouging by the accommodation industry during the Masters Games, but Tourism Central Australia (TCA) says it is common practice to vary rates according to demand.
Cr Melky said today: “It does not make sense to have a fluctuating rate.
“My view is that when the market is down the tariff is reduced. It is also an indicator that there is an opportunity to consider better strategies to increase demand for that period, rather than increasing the rate during peak periods.
“This approach is detrimental in the long term to the town’s economy and tourism. You are pricing yourself out of the market.
“This and the monopoly enjoyed by Qantas are major obstacles to a recovery of the industry.
“We must do something about this,” says Cr Melky.
“The town cannot afford that TCA is silent on this issue.”
Its acting general manager Laurelle Halford late yesterday provided a comment about increased accommodation prices during the Master’s Games.
Ms Halford says: “To my knowledge, TCA has not had any negative feedback about this. It is quite normal during a major event period. It is the same the world over.
“Take for instance the fact that accommodation costs in Darwin literally triple over the Darwin Cup and V8’s period.
“In my own search for accommodation in Hobart for this Christmas and New Year, when the Sydney to Hobart race is on, accommodation costs on Wotif were extremely inflated as well.
“The fact that it happens in Alice Springs is of no surprise and it has been happening for as long as I have lived here and been in the tourism industry – 12 years,” says Ms Halford.
“Hotel operators tell me that when negotiating rates with their wholesale and inbound partners, they are actually asked to nominate their rates during special events periods over and above their usual rack rate.
“Hotel operators also tell me that the average occupancy rate over the Master’s Games was 75-80%, with the highest rate on a particular day being 90% – a good result all round.”

 

Cr Melky, a keen sportsman, seen as a competitor on the Masters Games website: See you in 2014? Maybe not.

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3 Comments (starting with the most recent)

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  1. Steve Brown
    Posted November 15, 2012 at 5:10 pm

    It’s the age old law of supply and demand, Hotel Motel Operators the World over do the same. As such it must be considered normal business practice. However given that Alice is already a very expensive destination because of Transport to and from, no matter what mode of it you employ, it would pay operators to be very wary of increasing their rates too much for the Masters, as it would be a real shame to kill the golden goose and that most certainly is the possible result being juggled. Perhaps Masters Games and other Major Events should be approaching Operators, Qantas other Airlines and Charter Companies to come up with a special package price for fairs and accommodation that is somewhere in between, give a little incentive but still allow local business to make a dollar, after all that’s the real aim of the games.

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  2. Posted November 15, 2012 at 4:29 pm

    It’s not that accommodation providers do this to make extra money it’s so they can survive during the slow period. Most providers would not be able to afford to stay open during oct-april if they didn’t make extra money during these periods. you just have to look at how empty all the caravan parks are through out Alice during oct-apr sometimes they are lucky to have 1 or 2 check-ins a day.

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  3. Scott Alexander
    Posted November 15, 2012 at 9:17 am

    Isn’t Cr Melky being a bit hypocritical, is he not in a similar business, being real estate? Real estate prices are based on supply and demand, aren’t they, similar to what the hotels are doing? How is this different?

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