Expensive hotel rooms

The National Letters

I wish to make a comment regarding the front page of the The National (Aug 15) titled “ICCC: Hotel room costly”.
This is something that the Independent Consumer and Competition Commission (ICCC) should consider seriously in terms of the pricing of rooms. It should not be left to the operators to decide the price because there are no guidelines and regulations in place as far as the stakeholders are concerned.
To make it more complicated, the Tourism Promotion Authority (TPA) is not yet empowered to set the room rates for hotels. Therefore, the hotels decide their own rates based on competiveness, meaning they compare their prices against their room types and then set their prices accordingly.
This issue of the high room rates charged by hotels has adverse negative impacts on tourism in Papua New Guinea. The drop in tourist arrivals as a result of expensive hotel rooms is a major concern, not only for the tourists but also stakeholders, researchers and others who are connected to the hotel industry.
The director of the ICCC has raised a good point about doing a market research and designing regulations where necessary to regulate hotel prices. This is a great idea, especially when there are no price-control mechanisms in place to regulate the prices of various rooms in hotels in Papua New Guinea.
The first thing the Department of Tourism, Arts and Culture should do is work out a way of star-ranking hotels, motels and resorts before the Independent Consumer and Competition Commission undertakes its market research and designs price regulations.
The Tourism Promotion Authority’s functions have been limited because of the failure by successive governments to empower it with regulating authority in consultation with Independent Consumer and Competition Commission.
It is now time for the government to set up a tripartite committee to look into the hotel industry’s pricing of their services and goods and find a way in which there can be effective oversight of the industry and its services.
The tripartite committee should comprise the TPA, ICCC and Building Board. The committee shall be set up to raise the standard of hotels and design the price rate structure of each hotel according to its star ranking.
The tripartite committee should be able to perform the following functions:

  • Lay down criteria for classification of hotels to international standard;
  • Suggest guidelines for the promotion of hotels in PNG;
  • Suggest improvement on the existing arrangements and provide sources for promotion;
  • Classify hotels by establishing a star-ranking criteria to comply with international standards;
  • Suggest a rates structure that considers the existing competitive pricing structure in the hotel industry; and
  • Make recommendations to the Government to establish state-run hotels by either franchising with international brands or working independently.

Timothy Ben Teropi
MTI Hotel
Port Moresby.