ICCC: Hotel rooms costly

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THE Independent Consumer and Competition Commission is concerned about the high hotel room rates, especially in Port Moresby, and has urged major operators to be “reasonable” with what they charge customers.
Commissioner and chief executive Paulus Ain raised the concern after receiving complaints from businesses and delegates of the Asia-Pacific Economic Cooperation economies.
“We have received complaints and reports from businesses and delegations of Apec member countries that they cannot send their full delegations to attend Apec-related meetings like the (three) Senior Officials’ Meetings (SOM1, SOM2 and SOM3) because of the high cost of hotel rooms in Port Moresby,” Ain said.
He said the commission could exercise its powers under the ICCC Act to undertake a market research with the view of regulating the industry where necessary.
However, at least two hotels in Port Moresby yesterday told The National that the cost of doing business in Port Moresby was very high.
Holiday Inn director of sales and marketing Michael Boyacii said their room rates were a reflection of operational costs such as electricity, water and food. “Our rates are to cover our costs and make sure we remain a viable business,” Boyacii said.
Laguna Hotel front office manager Leo Landicho shared the same view saying the ICCC statement was not fair because hotels were charging just enough to make a profit.
During the construction phase of the PNG LNG project (around 2010), hotel room rates shot skywards when hundreds of expatriates, investors and business people flocked to Port Moresby, putting a strain on the limited supply of high-end rooms.
Ain said it created a “supply constraint and rooms had their rates increasing significantly. That demand eased off after the completion of the PNG LNG project (around 2014). However, the room rates have never subsided,” Ain said.
He said that in the past two to three years, there had been significant developments in the hotel industry in anticipation of Apec 2018.
“Port Moresby appears to be well positioned to meet an anticipated surge in foreign delegates. Although there has been an increase in hotel rooms, it is never reflected in the rates. “They are even more expensive than some of the best hotels you find in other jurisdictions, including our neighbouring economies,” Ain said.