Island Hotels Group is the first large company to sign a price stability agreement in which it agrees not to change its food and beverage prices until April 2008.
The price stability agreement (PSA) goes beyond the commitments of the Fair initiative. Whereas by way of the latter, businesses pledge not to increase their prices for the sole reason that the currency is being changed, businesses subscribing to the PSA pledge not to increase their prices for any reason whatsoever for a defined period of time.
Through the signing of the agreement with the Euro Observatory in the Ministry of Finance, Island Hotels Group is the first hospitality and catering organisation which goes beyond the commitments of the FAIR initiative.
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.
In addition, following the lead training given by the National Euro Changeover Committee (NECC), Island Hotels Group has embarked on a wide-ranging training programme for all their employees to ensure timely preparedness for the euro.
The NECC has trained representatives of 90 large companies who will now return to their workplace to train their employees.
The price stability agreement was signed by Alan Camilleri, head of the Euro Observatory, and Winston J Zahra, director of operations, sales and marketing for Island Hotels Group.
Speaking during the launch of the Group’s internal training programme, Mr. Camilleri said: “Price stability agreements go beyond the concept of Fair pricing: they actually guarantee no change in price, irrespective of other considerations. Island Hotels Group is not only reassuring customers that they will not abuse of the changeover, but they are actually guaranteeing no price increases for a period of nine months.”
He said the Euro Observatory was also seeking collaborative relationships with organisations willing to impose on themselves a voluntary price freeze to continue to reassure consumers that the euro did not necessarily mean price increases.
Island Hotels Group, which encompasses four hotels and a catering business, employs more than 1,500 full and part-time employees.
Mr Zahra said the group has taken the changeover very seriously and started its preparation in January last year. Four months later, an internal euro changeover committee was set up which was composed of members of the group’s executive team.
He said the group believed that fostering a relationship of trust between the group and all clients was very important. The group was leading by example and playing its part in combating the perceived increase in prices.
He said the group’s decision to freeze its prices was a risky one because the group could run at a loss if suppliers raised their prices. However, he said, in the long term the group believed, and hoped, that more companies would take this “bold step” in the country’s best interest.
“There is no doubt that the introduction of the euro will help tourism flows 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. 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 said.