Reports emerged earlier this week that the drawn-out dispute between the ICHHTO and hoteliers over how much room rates should increase in the current fiscal year (started March 20) has led to a substantial increase in tour prices, because hotels raised room rates by more than the 12% set by the ICHHTO.
Furthermore, hotels have also stopped offering discounts to tour operators a practice which was in vogue for years to help reduce travel costs and boost business.
The rise in tour prices is because tourism is booming, said Morteza Rahmani Movahed, deputy for tourism at the ICHHTO. Hoteliers believe they no more need tour operators to fill their rooms and have cut ties with their old friends (travel agents), he said referring to the steady increase in foreign tourists. In many big cities and major destinations almost all hotels have been booked for over a year.
Essentially describing hoteliers as fair-weather friends, Movahed said hotel owners offered discounts to travel agencies back when the industry was in a rut, but instead of continuing to support tour operators, they cut ties when people started to travel more.
Based on a memorandum of understanding between hoteliers and tour operators, hotel owners are supposed to cut rates by 20% and 25% for domestic and foreign travelers on package tours.
But the MOU is not legally binding, so it cannot be enforced. Whether or not it is upheld depends on the parties involved, the official noted.
Prices Gone Up
Exactly a year ago, a four-day package tour to Kish Island including transportation, accommodation at a three-star hotel and breakfast would have cost a family of four about 20 million rials ($580). Today, $580 can buy a four-member family only two days in the popular Persian Gulf resort.
The same family would have paid 15.2 million rials ($440) for a three-day tour of Shiraz, including a stay at a mid-scale hotel. Now, they have to pay 19.2 million rials ($560) for the same package.
They have either reduced the discounts considerably or scrapped them altogether, says Muhammad Ali Ashrafi Vaqefi, a travel agent and member of the Iranian Tour Operators Association. Because of this particular reason prices of package holidays have gone up.
He said there is a misconception among hoteliers that tour operators pocket the discounted amount by charging tourists extra, according to the Persian daily Donya-e-Eqtesad.
Thats not the case. By offering discounts, hotels allow us to lower the prices of package holidays. Essentially it is the vacationers who pay less; tour operators dont get anything extra, he said.
He called for dialogue between hotel owners and travel agencies, adding that a mutual understanding will help both sides.
By Financial Tribune
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