Price gouge warning for World Cup

Hotel and motel owners are being told to charge peak season rates for next year's Rugby World Cup - any more and they risk pricing themselves out of the market. Photo / Sarah Ivey

Treat the Rugby World Cup like a peak season or face being priced out of the market, industry groups have warned.

New Zealand risked tarnishing its reputation as a fair nation through greedy accommodation operators cashing in on Rugby World Cup hosting rights, Jasons Travel Media chief executive Matthew Mayne said.

However there still needed to be an element of gain for accommodation providers given the competitive nature of the market when big events were in town, some have said.

The Rugby World Cup runs from September 10 to the weekend beginning October 22 next year, with some of the pool play to be held in provincial centres such as New Plymouth, Whangarei, Napier, Nelson, Rotorua, Invercargill, Hamilton, Palmerston North, and Wellington.

Mayne said the level of interest in this country meant accommodation providers would be looking to maximise their profits, but needed to be careful not to price themselves completely out of the market.

Some of the prices some hotels in particular had been quoted as charging, were "ludicrous", and would directly impact tourism in this country by keeping a cap on visitor numbers, he said.

"There are three normal levels of pricing that an accommodation provider has - the shoulder season, peak season and off-peak season. In this case I would be advising them to price for peak season.

"Anything more than that is a profit," he said.

Mayne said the Rugby World Cup would be a huge cash spin-off for New Zealand and there would be people who would profit, but ultimately "we need to be thinking about the long gain".

New Zealand Hotel Council independent chairwoman Jennie Langley said it was of no interest to hotels to price gouge, and those that were, would be "picked up by the market".

"The hotels are really used to operating big events both regionally and in the main centres, but you have to be realistic, if there is limited amount of accommodation then of course you are going to charging the full price for that event."

Langley said she expected hotels would be charging event rate (also called peak rate by some).

One of the biggest challenges for the industry was making sure there was enough accommodation for loyalty travellers during the course of the cup, she said.

A recent television news report featured an Australian travel agent accusing Auckland hoteliers of being greedy in their pricing for the Rugby World Cup.

Australian Sports Tours said hotel rates during the World Cup would be about three times what they were during the Bledisloe Cup.

General manager Sam Harrison told TVNZ that a night at Auckland's Hilton Hotel could set people back $1700. These prices were pushing people to consider alternatives like travelling early or flying in and out on the same day.

He said even some two and three star hotels were tripling prices, believing demand will outstrip supply.

Michael Baines of the Motel Association of New Zealand said price gouging allegations were being manipulated by some Australian travel agents, who were doing it for their own gain.

Any accommodation providers who charged over their published price will be constrained by the Fair Trading Act, he said.

In the last couple of months more than $55 million worth of hotel accommodation has been sold through the Rugby World Cup organiser's official 'accommodation bank'.

What prices these rooms will eventually go for is not yet known, with the hotels expected to publish pricing details in July or August this year.

Stadium Hotel and Apartments Hamilton owner Terry Booth said he had a wholesaler was acting for his business during the Rugby World Cup, and he was not yet privy to their pricing structure for the event.

But he expects that a studio unit at his complex would fetch about $300 during cup games in Hamilton, against $135 during peak season.

"I have no reason to doubt accommodation will be at a premium and I would have to hope there would be some sensibility with it," said Booth.

New Plymouth Top 10 Holiday Park owner Christine Hickford said she had not yet set pricing for accommodation during the world cup, but it would more than likely be peak rate.

Peak rate for a two bedroom motel unit sleeping four people was $210, while cabins were about $110 for four.