President of Ukraine Viktor Yanukovych is concerned over the high prices for hotels and has instructed Deputy Prime Minister, Minister of Infrastructure Borys Kolesnikov and Minister of Economic Development and Trade Petro Poroshenko to take measures to bring hotel prices to an economically reasonable level, including during Euro-2012 in Ukraine.

"Ukraine has a law on public-private partnership, and in the framework of this partnership, during the preparation for EURO 2012, the state has done everything to exempt hotel owners from income tax for 5 years," President said.

Therefore, according to Yanukovych, the government has every reason to request hotel owners to set adequate prices during EURO 2012.

UEFA Operations Director Martin Kallen once said that an urgent challenge before EURO 2012 is accommodation of guests in Ukrainian hotels, in particular, some of them offer unreasonable high prices.

The UEFA official said some hotel owners offer very high prices, and it negatively affects the image both of the host country, and the tournament as a whole, and can certainly affect the number of guests who will visit Ukraine during EURO 2012.

"The prices for accommodation in hotels are very high in Ukraine, and it can become an obstacle for funs. Guests simply won't come to you," he said during the telebridge "Warsaw-Kyiv.100 days till Euro-2012".

In his turn, vice PM and minister for infrastructure of Ukraine Borys Kolesnikov noted that Ukraine's authorities had already warned hotel owners about this problem. "The hotels have been warned they may stay half empty," he said.

According to minister of tourism and sport of Poland Joanna Mucha, the Polish side is holding talks with the host-cities, as well as restorers and hotel owners about the prices for accommodation. "We are trying to persuade them that this is not the last time tourists come to us, but the first one. We want to make them understand that they need to create such conditions, which would ensure the returning of the guests," Mucha said.

The official also admitted that due to high prices for hotel accommodation, some fans will have to stay 30-40 km far from the very host-cities.

At the same time the very participants of the hotel market believe that the price increase during the championship is a normal practice.

Analyzing the problem (or may be not a problem at all) ForUm has asked experts and politicians about the situation and what to expect.

Dmytro Prohorov, executive director of Association "Star hotels" of Ukraine:

- The question of high prices for hotels in Ukraine ahs never been a pressing one. We have just lost the information war to Poland. Our mass medias have taken information from the Polish and started to write about overpriced hotels in Ukraine.

According to the world practice, hotel operators increase prices maximum two times, right before this or that event. But there is nothing to talk about super high prices for accommodation.

I am sure we should not expect any price drop, as such reduction contradicts with the common sense and rules of economy. May be some private hotels with 15-20 rooms will lower the prices, but it will not make any difference on the market. In this situation it is the market, which rules.

Mykola Yevdokimenko, president of the Association of hotel unions of Ukraine:

- Once, during the times of Olympic Games-80ies, the prices for hotels were determined by the state, but now hotels are private and it is difficult for the government to influence their policy.
But we still must take some measures to prevent paralyzation of hotels, as once happened in Portugal, when hotels increased prices so much, that tourists stayed in Spain coming to Portugal for a day only.

Now we are calling a seminar in Yalta to discuss this problem, but we still do not know what to do.

Volodymyr Fesenko, director of "Penta" political research center:

- I think that high prices for hotel rooms are nothing but a banal desire to earn money. And the government, namely anti-monopoly legislation, does not have constraining factors.

I believe the state can influence the price policy to a certain point. For example, I heard that some hotels have taken loans from the state, hence the state has instruments of influence.

Anyway, in order to settle this problem in a proper way we must find a balance of administrative control and to promote the development of competitiveness within the market.
Oleksandr Paliy, an independent expert:

- Indeed Ukraine is losing tourists because of the price situation on the market of hotel services, and not only for the period of Euro-2012. Take Crimea, for example. Last year only five million tourists visited the peninsular, while the tourist flow in Turkey increased by 18% with 35 million visitors.

The situation with high prices is conditioned by excessive monopolization of the market. Any economist will tell you that monopoly leads to the reduction of competitiveness. The best solution is not administrative orders, but market mechanisms.

Vasyl Horbal, MP from the party of Regions, former governor of Lviv region:

- President's desire to solve the issue of high prices for hotel accommodation for the period of Euro-2012 is understandable. Of course, it is needed to hold talks and consultations with hotel operators and owners. The government offered them a significant reduction of taxes, but many hotels have ignored the request to lower prices for some reason.

In this case the dialogue is the most important, as such major events are used for commercial purposes, as everywhere in the world. For example, London is hosting Olympic Games, and hotel operators increased prices for accommodation, but this issue has not been brought for consideration by the English parliament or government.

Of course we want Euro-2012 to be held at proper level, but we should not forget that the market is market.

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