The Euro Observatory and Island Hotels Group sign first local price stability agreement

Island Hotels Group have with immediate effect imposed on themselves a voluntary freeze on all their food and beverage prices until April 2008 as a clear message to consumers in the run up to the adoption of the euro. Through the signing of a Price Stability Agreement with the Euro Observatory in the Ministry of Finance, Island Hotels Group are the first hospitality and catering organisation which goes beyond the commitments of the FAIR Initiative. In addition, following the lead training given by the NECC, Island Hotels Group have embarked on a wide-ranging training programme for all their employees to ensure timely preparedness for the euro.

Following the publication of the Final Master Plan for the Euro Changeover in Malta, earlier this month and the beginning of the minting of coins process last week, another important step in this nation wide project unfolded today.

Since the FAIR initiative was launched in January, more than 6,200 businesses have applied to commit themselves in carrying out a smooth changeover by promising not to increase prices for the sole reason that the currency is being changed. Now another tool is being used in order to ensure price transparency, boost consumer confidence and keep on promoting fair pricing.

The Price Stability Agreement was signed between Mr Alan Camilleri, Head of the Euro Observatory and Mr Winston J Zahra, Director of Operations, Sales and Marketing for Island Hotels Group.

Speaking during the launch of Island Hotels Group’s internal training programme, Mr. Camilleri said: “Price Stability Agreements are the third pillar of our Consumer Protection Framework. With the first being the dual display if prices and the second being the FAIR Initiative, we are today going beyond the concept of Fair Pricing, that of actually guaranteeing no change in price irrespective of other considerations. Island Hotels Group are not only reassuring their customers that they will not abuse of the changeover, but they are actually guaranteeing no price increases for a period of nine months.”

“The Euro Observatory is also seeking collaborative relationships with organisations willing to impose on themselves a voluntary price freeze to continue to reassure consumers that the euro does not necessary mean price increases. We do appreciate the comments being made in the media on price increases and we are doing our utmost to monitor prices and act on complaints of price increases. What Island Hotels Group are doing today, is proof of the commitment by best practice organisations which will hopefully lead to more organisations to follow this example” said Mr Alan Camilleri, Head of the Euro Observatory

The agreement highlights the importance of “the practical aspects of this operation in the early days of 2008.”

On behalf of the four hotels and catering enterprise that fall under the Island Hotels Group umbrella Mr Winston J Zahra stated that “It is vital to foster a relationship of trust between ourselves and all of our clients.  This is especially important for us in the hospitality business and vital during a period when we will be switching to the second strongest currency worldwide. A great deal of work has been done locally by the government at a macro level and by the NECC as the government agency responsible for the smooth implementation of the currency to ensure that we, as a country, are ready for the implementation of the euro.”

“There is no doubt in our mind that the introduction of the euro will help tourism flows in the future from other euro  area countries due to the obvious advantages of transparency of exchange and lower costs as a result of eliminating the need for exchange of currency. As a company we feel that it is the opportune time to show our full commitment towards this important change and to do our utmost to reduce any possible inflationary element.  Additionally, following a 12 month preparatory plan we have now reached the final stages which involves the training of all of our 1,500 members of staff in the use of the euro both at work and within their private capacities.”

“We are aware that we have taken a bold step but concurrently feel that by taking this lead many other businesses within the commercial community will follow suit and give a similar commitment to the general public. As business leaders we have a duty and an obligation to ensure that the introduction of the euro is carried out with minimal disruption to the overall economy.” Mr. Zahra concluded by stating that he hoped the Island Hotels Group example will be followed by many other businesses of all sizes locally.

In conclusion, Euro Observatory Head Alan Camilleri said that “While recognising that price movements are a natural development in an open and competitive market environment, it transpires that consumers are highly sensitive to price movements during the currency changeover, largely due to the experience of previous currency changeovers in the euro area. While ensuring the proper functioning of a market economy, it is recognised, nonetheless, that price movements during the changeover period are ill-perceived by consumers and potentially unhelpful for the smooth transition to the euro. This is the rationale behind the concept of Price Stability Agreements, a notion which was conceived and managed in France in 2001.”

Through the signing of the agreement, Island Hotels Group will also be in introducing special euro offers during January while doing dual display of prices even on a business to business level wherever possible.