..??!

In today's news.

Tourism Minister Datuk Seri Tengku Adnan Tengku Mansor said such undercutting of rates was unhealthy and would badly affect the country’s tourism revenue.
“The ministry wants to put a stop to the price war and will soon discuss with the operators to introduce a minimum fixed rate,” he said.
“I am disappointed to find several five-star hotels slashing their room rates to make quick profits. Their action has resulted in huge differences in room rates.” Tengku Adnan said the ministry did not want five-star hotels to charge below US$80 per night because room rates in the country were already very low.

The Star Online

Wtf?
There was another news that said this.

Help the country first and think of your “pocket” later.

This is the advice from Tourism Minister Datuk Seri Tengku Adnan Tengku Mansor to the private sector involved in promoting the Malaysia My Second Home (MM2H) programme.

The Star Online

Ok.. although it's on two separate issues. Doesn't that imply the same thing for both? Or is the minister implying that private sectors should help the country first in the MM2H , BUT think of tourism revenues first when it comes to room rates?

Competition is healthy for the consumers. Prices of services are up to the provider to fix, and if they want to undercut their prices, for long term gains in consumer loyalty, then let it be. One downside of it, is brand value. If for say, Marriott decides to push it's prices down to RM 200 per night, wouldn't that push the value of it's rooms down? Lower brand value pushes it's YED to be more less elastic and XED to a higher value. Certainly I'm very sure that the BODs are aware of this. So why does the government have to intervene in this? Government intervention has often be shown to screw up the market equilibrium by fixing prices and putting ceilings. I'm not referring to the ceiling prices of consumer goods, but in this case, the base price of US$80 per night room rates is really unneccessary.

Is this PR in the works because of the recent comments that VMY2007 isn't drawing in much tourists? Sigh - no comment.