World Cup fans face 300 per cent hike in hotel room rates

African think-tank report blames Fifa and an agency that was allowed by officials to corner the market
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Tens of thousands of football supporters heading to South Africa for the world's biggest sporting event – the world cup, which starts next week – face hugely inflated prices for accommodation. In some cases hotel tariffs have risen by up to 300 per cent over the normal charge, prompting allegations of a "rip off".

Experts blame a British-based company which has a controversial exclusive deal with Fifa, football's controlling body, to provide lucrative hospitality packages for the tournament. The company has secured tens of thousands of rooms – up to 80 per cent according to estimates – in South Africa's leading hotel chains which it is offering at vastly inflated rates. Hotel rates in and around game reserves such as the Kruger national park are said to be exceptionally high.

Critics warn that expensive accommodation is deterring fans from travelling to the tournament to support their teams. Fifa recently downgraded its estimated number of visitors to South Africa during the event from 750,000 to 200,000, and tickets have been bought up by the government and given away to South Africans.

Kevin Miles, of the Football Supporters Federation, said that only around 25,000 England fans would make the trip to South Africa next month, compared to 200,000 who travelled to Germany in 2006: "Many fans are not going because they perceive they are being ripped off," he said.

A critical report into World Cup organisation, called Player and Referee: Conflicting Interests and the 2010 World Cup by the Institute for Security Studies, a respected African think-tank, blames Fifa.

It claims a British-owned company, Match Event Services, and a subsidiary, Match Hospitality, are to blame for inflated prices. Match, which is Swiss-based but owned by a UK-registered company, Byrom Ltd, is accused of securing as many as 55,000 hotel rooms and inflating prices. The report states Match Event Services were handed the licence to be the official provider of accommodation without a public tender. It says the deal is open to criticism because one of the shareholders of Match Hospitality is a Swiss company, Infront Sports, whose chief executive is Philippe Blatter, a nephew of the Fifa president, Sepp Blatter. The report is also critical of the fact that much of the tournament's profits will not stay in the host country but will go back to the UK and Switzerland.

Match Events said in a statement that its parent company had handled Fifa's accommodation needs since the 1994 World Cup and there was no requirement for a tender. It said it tried to keep prices low in South Africa by "appealing to the accommodation providers to confirm fair prices and reasonable terms".

Infront Sports said that its relationship with Fifa predated Philippe Blatter's appointment and that it holds only 5 per cent of Match Hospitality. But the South African tourist industry and hotel owners remain unconvinced.

One tour operator told a South African newspaper that it had to pay a 224,000 Rand (£20,000) licensing fee to Match as well as a 20 per cent surcharge. Hotels are also angry that many beds bought by Match have been returned, but the contract holds them to the higher price.

"They dictate the price to ensure that we're at the same level [as the other hotels where they have sold beds]," said a receptionist at the Southern Sun Hotel in Cape Town's Victoria and Alfred Waterfront area.

As early as 2008 guesthouses were complaining of being "bullied" into signing "punishing contracts", the Referee and Player report says. The chief executive of South Africa Tourism, Moeketsi Mosala, resigned shortly after accusing Match of bullying the tourism industry in 2008.

Mr Miles said Fifa could make money out of the World Cup, or use it as a national showcase. "Fifa face a choice. They can have the World Cup in a developed nation like Germany and turn it into a financial bonanza; or they can take it to a developing nation and use it to boost that country's profile. But they can't do both," he said.