Hotel price fixing allegations hit World Cup

The South African ministry of tourism has confirmed it will investigate claims hotels have been artificially inflating prices ahead of this summer’s FIFA World Cup.

Tourism minister Marthinus Van Schalkwyk announced an official investigation following allegations of unreasonably high prices at some properties, with hoteliers quick to deny the claims.

“In recent weeks we have noted allegations that accommodation establishments in the tourism industry are not responsible, and are inflating prices excessively,” the tourism minister said in a statement.

“Until now our impression has been that this is not the case, but we believe it should be investigated and the results of the investigation made public.”

The 2010 FIFA World Cup is scheduled to kick off on June 11th. This, the 19th football world cup, will be the first time the tournament has been held in Africa.

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Some 450,000 international visitors are now expected over the duration of the tournament, according to FIFA figures. This is down from an initial estimate of one million guests.

Airline Fix

Allegations of price fixing in the airline industry have also surfaced in recent weeks. Six South African airlines – Comair, South African Airways (SAA), 1time, Airlink, SA Express and Mango – are all facing investigation after allegedly colluding to hike fares for local flights during the tournament.

Government officials were responding to public claims fares for domestic flights had become “drastically high”, with SAA agreeing to provide the Competition Commission with evidence against its competitors.

All the airlines – excluding SAA – deny the allegations.

Ticket Prices

FIFA has also been force to deny rumours sluggish ticket sales have forced a cut in prices for the World Cup finals. Reports over the weekend even suggested free tickets would be available for group games, as the football governing body sought to ensure stadiums were filled.

The allegations were immediately rubbished, with FIFA general secretary Jerome Valcke telling a news conference: “There is no question of bringing down any prices.”

However, FIFA has confirmed it will seek to increase the number of category-four seats available. The specially-priced tickets are designed to allow local South African residents to attend the event, and sell for roughly £10.

Some 11 per cent of stadium capacity is currently made up of category-four tickets, with Mr Valcke stating this is set to rise to 20 per cent.

“This was a promise that the FIFA president made to the South African government,” Mr Valcke explained.

“There will never be a free ticket for the World Cup,” he concluded.