Zimbabwe: Govt Reintroduces Price Controls in Tourism Sector

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The Herald (Harare)

6 August 2008
Posted to the web 6 August 2008

Harare

GOVERNMENT has with immediate effect reintroduced price controls in the tourism sector following a spate of unilateral price increases by the industry.

The latest move will see operators seeking approval just like any other industry before making any adjustments in the cost of their services.

National Incomes and Pricing Commission chairperson Mr Goodwills Masimirembwa and Zimbabwe Tourism Authority chief executive Mr Karikoga Kaseke met with the operators to strategise on the proper way of implementing the latest pricing mechanism.

Under the new pricing regime, hoteliers, restaurant and lodge operators will be required to freeze price increases until they get approval from the commission through ZTA.

Mr Kaseke said operators should submit prices they are currently charging for validation and proposals to ZTA which will then forward them to the NIPC for approval.

"We met to discuss the latest move taken by Government to reverse the deregulation of the tourism sector mechanism. From now onwards the industry will only be allowed to increase prices approved by the NIPC.

"ZTA is conscious of the need for a speedy decision making hence they will only take a maximum of 72 hours to complete the process. We understand the industry's concerns so we have come up with an efficient way of dealing with the proposals, to approve, disapprove or adjust the prices," he said.

Mr Masimirembwa said the decision to re-introduce price controls was muted after realising that most hotels and restaurants were charging prices based on the illegal RTGS rate.

He said they had also introduced a three-tier pricing model with a cheques, cash and RTGS rate.

"We want each operator to take responsibility of what they charge so we are going to force them to give us the names of their suppliers because most of them blame their suppliers for the increases.

"Business must complement government to bring stability to the economy because if their behaviour continues the new currency will soon lose value," Mr Masimirembwa said.

He said the NIPC would make sure that all operators charge the approved prices.

Mr Masimirembwa said the price controls would be relinquished only after the industry begins charging justifiable prices.

Last week, NIPC was forced to reverse the deregulation of the pricing mechanism in the tourism sector after complaints of rampant increases in the cost of services.

The president of the Zimbabwe Council Tourism, Mrs Chipo Mutasa, said the operators were aware that some of them were overcharging and the prices were not justified.

"We acknowledge that the sector is engaged in unfair business practices and the internal monitoring was not giving the intended results.

"The industry has, however been a price taker rather than a price mover. There is a need to influence suppliers so that we can control prices and we are more than ready to work together with Government so that we come up with solutions to the challenges we are facing," she said.

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