City's Reputation At Risk If Visitors Are Ripped Off
Sydney Morning Herald
Wednesday October 6, 1999
When Bruce Baird went to the Barcelona Olympics in 1992 it cost him $700 a night for his room, instead of the $150 he'd be paying if it wasn't for the Games.
Of course, as minister responsible for Sydney's Games bid, Baird didn't suffer any personal financial hardship as a result. But he was keenly sensitive to the damage caused by accusations of price gouging levelled at local hoteliers.
And as minister for tourism he was concerned of the potential damage to Sydney if its hotels did the same.
When he returned to Sydney, Baird and Sydney's bid committee agreed with the local hotel and motel industries to cap Sydney room prices at normal levels. Their thinking was the hotel industry stood to gain long-term benefits from the Olympic Games and they should not be aiming to turn a quick buck by jacking up prices for a couple of weeks.
At a press conference in the ANA hotel on December 1, 1992, Baird and the Australian Hotels Association and the Motor Inns and Motel Accommodation Association announced their agreement and their plans to set it down in a legally binding document.
This was not just to protect Sydney's long-term tourism reputation and the pockets of Games spectators, but was also designed to win support for the Sydney bid from the International Olympic Committee members. After all, the regime in Beijing would have no trouble capping its hotel prices and to stay in the race, Sydney needed to do the same.
Since the bid was won, Sydney's hotel and motel operators have conveniently decided to shelve their agreement and make hay while the sun shines.
In the seven years since it was struck, there have been two major changes to the original agreement. Neither was announced.
The first change was to restrict the deal to those hotels and motels contracted to provide rooms to SOCOG. The second was to lift the ceiling on prices for those hotels which signed with SOCOG. So instead of capping all room prices to the 1998 level plus twice the (1.5) per cent inflation rate, these hotels can now charge 170 per cent of their 1998 rates.
Sydney's best hotels are all signed by SOCOG with fixed rates, while many of the rest are charging what the market will bear, so you could pay more for a lousy room in the suburbs than a swish room in the city's heart.
As accommodation gets tighter, some hotels will continue to raise prices and some visitors will be badly ripped off. Sydney's reputation as a desirable destination risks being damaged by such greed unless the Motels Association and AHA honour their agreement.
© 1999 Sydney Morning Herald
