TO cope with rising energy costs, 70 percent of hotels and other accommodation establishments in Cebu City are contemplating to raise rates.
But Marco Protacio, president of the Hotel, Resort and Restaurant Association of Cebu (HRRAC), said hotels in Cebu City cannot easily increase rates as the market here is “price sensitive.”
“I don’t want to cause panic but a lot are thinking of adjusting (rates) this year,” said Protacio following a press conference yesterday on Cebu Goes Culinary and Cebu Food Expo 2008.
“(However), it all depends on the individual decision of each property (hotel),” he said, adding that before adjusting its rates, a hotel has to study its profit margin.
“It depends on the property; each hotel has set a different (profit) margin. As of now, room rates are stable. And I hope we don’t have to reach that point (where rates will be increased). We also have to consider the loyalty of our customers,” he stressed.
He said if hotels do not adjust their respective published rates by June, “then it (increase) would probably not happen this year.”
Protacio, also general manager of Waterfront Cebu City Hotel and Casino, said in an interview that hotels have not yet adjusted prices in relation to recent increases in energy prices. Like other industries, the hotel industry is affected by rising energy costs, he added.
“Now would be a good time to adjust rates. But it’s not easy. Maybe (it’s easier) for (more upscale) properties in Mactan but here in Cebu City, the market is more price sensitive. A difference of $1 to $5 would be (considered) dramatic,” he said.
Foreign exchange
Besides, he said, hotels that base their rates on the dollar are starting to be more optimistic with the greenback’s appreciation against the peso.
He revealed, though, that hotels normally make small adjustments to their rates in response to inflation. He said hotels have already made adjustments to the foreign exchange changes in 2007 which had the peso rising to about P41 against the dollar, compared to P49 or P50 to $1 in 2006.
The peso closed at P43.75 against the dollar yesterday.
Tourism Undersecretary Phineas Alburo said hotels, resorts and other tourism establishments can adjust their rates according to what they think is necessary to cope with inflation and other market conditions.
“It’s a free economy,” he said. Besides, the Department of Tourism is keener on attracting quality tourists and is concerned with numbers, he added.
He also said that the room supply situation in Cebu would improve next year with the opening of more hotels and resorts. He said about 600 rooms are expected in the first quarter of 2009 while the Sofitel-managed hotel of the SM group is targeted to become operational in the middle of next year.
“The main movers of tourism is the private sector; the government is more on the regulation aspect,” he said. (LAP)
