HomeBusiness DigestGive govt discounts: NIPC tells hotels

Give govt discounts: NIPC tells hotels

THE National Incomes and Pricing Commission (NIPC) wants all hotels and tourism service providers to charge lower rates for government and local authorities.

NIPC chairman, Godwills Masimirembwa, told tourism operators at a meeting this week that they must start working on the modalities of the new pricing system that will result in a permanent discount for the government and local authorities.

The directive means that the general public will pay more for accommodation and meals in hotels than government employees.

Although the discount rate has not yet been announced businessdigest understands that the NIPC wants the government prices to be 20% lower that those paid by the public.

The intervals for reviewing the two prices are also different.

While the public rate will be reviewed every two weeks the government prices will only change after a month.

Parastatals will not enjoy the benefit of the new system.

Masimirembwa made the directive after hotels and tourism service providers increased their charges without NIPC approval.

Masimirembwa told businessdigest yesterday that the NIPC wanted the system to start operating as soon as the modalities are completed.

“Yes that is what we want because we have to make it clear that hotels are not necessarily a luxury. There are others who come into hotels because they are on business. Here we are talking government and local authorities,” Masimirembwa said.

“Government and local authorities must not be treated like any person who comes into a hotel to seek an experience.”

The Tuesday meeting was convened to deal with the pricing issue after hotels increased their rates without approval from the NIPC.

Hotels increased their prices arguing that the NIPC was not responsive to its request for an urgent review.

The NIPC has been dragging its feet on the pricing issue for the past three month arguing that the prices that they approved last November had not expired.

The meeting was attended by officials from the NIPC, Zimbabwe Tourism Authority (ZTA) and the Tourism Council of Zimbabwe.

Masimirembwa said the new pricing system was meant to “show the difference between people coming into hotels for an experience and those that are doing so out of necessity”. According to the plan the discount will apply to all hotels including those with five stars.

Tourism stakeholders who attended the meeting told businessdigest that although the directive was bad for their businesses they had agreed to implement the system as a goodwill gesture to the government.

“This was a rescue plan. The NIPC wanted to push for the arrest of some hotel bosses. We had to do something,” said an official with a local hotel group.

Stakeholders said the new pricing systems will create distortions in the tourism market. They said the move showed that government was using its policies to protect itself.

“They put in price controls saying it was meant to protect the public but the new directive shows that government only wants to protect itself,” said a senior executive with a local hotel group.

By yesterday players in the hotel industry were still trying to come up with a structure that can be used to implement the system.

Hotels are yet to decide on the kind of documentation that will be required for government officials to be eligible for the discount.

There are also fears in the tourism sector that the system might be open to abuse.

For instance it is unclear how hotels will treat government official who are on an election campaign.

There are also concerns in the sector that the 400% price review approved by NIPC might not be enough for most hotels to remain viable.

The NIPC said the new rate for a five star hotel is $280 million per room but experts in the sector said it costs more than $400 million to prepare the room for a guest.

Discussions for another price review will continue today.–Shakeman Mugari

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