Hotels sting guests with big phone fees

By CHRIS DANIELS consumer reporter

With the price of toll calls dropping through the floor, Auckland hotels are cashing in by charging tourists top dollar for phone calls.

Telecom charges businesses as little as 4.5c for local calls, yet tourists are being asked to pay up to 85c for calls in the same city.

Most premier Auckland hotels contacted wanted to keep their phone charges secret.

Of six hotels asked, only Sky City and the Stamford Plaza were willing to divulge their charges.

Three of the four other central city hotels, the Carlton, Centra, Sheraton and City Life, referred inquiries to the Major Accommodation Providers Association, which then refused to answer on their behalf. It said such a request was impossible to work out.

A survey of hotels by American accounting firm PKF Consulting analysed revenue and expenses of about 1500 major hotels for 1998.

It found that for every $100 the typical hotel spent on telecommunications, it hauled in $227.05 from guests, a mark-up rivalled only by that on alcohol sales.

Auckland hotels seem to be following the international lead, with some charging guests up to five times the standard business rate they pay phone companies.

The assistant chief executive of the Consumers' Institute, Peter Sutton, said many hotel phone charges were "extreme."

Hotels justified high surcharges on the grounds that they were charged business rates and had to install and maintain complex phone systems.

"We think the charges are frequently much higher than they need to be," said Mr Sutton.

"However, it is a free market and our advice is to check carefully before you make calls from a hotel."

Using a calling card, cellphone or even walking to a pay phone is almost always cheaper than using phones in hotel rooms.

The financial controller of the Stamford Plaza, Kushlan Sugathapala, said the hotel had recently spent $150,000 on a new phone system to make sure all guests were able to transmit data down the phone lines.

Other hotels were less forthcoming about their charging.

Brian Moore, general manager of the Carlton Hotel, refused to say why the hotel could not work out its own charging system for guests.

City Life general manager Ronnie Ronalde said local calls cost guests 50c.

The hotel's phone system was not designed to make money for the hotel, just to break-even.

Asked why he would not provide the rates charged to guests, Mr Ronalde said: "To start quoting figures, it's not good, it's a private thing in a way."

Sky City spokeswoman Sonya Haggie said the hotel's charging policy was "in line with standard industry practice throughout New Zealand and around the world."

One inner-city motel, the Domain Lodge in Grafton, allows guests to make free phone calls from their rooms.

Even though a small motel does not have the call volume to negotiate special deals from phone companies, Domain Lodge guests pay the standard business rate for toll calls, with no surcharge.

One plan offered by Telecom costs a business 9c a minute for calls within the region, and a flat rate of 25c a minute from Auckland to Wellington.

Telecom spokesman Glen Sowry said a business would tend to pay 4.5c a minute for a local call.

Supplying local phone calls and toll services was extremely comptitive, so charges were low.

The Park Royal hotel in Wellington charges guests $1.05 for the first five minutes of a local call, then a smaller fee for every extra minute.