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Price skyrocket during Euro 2012

Tuesday, 29 May 2012 12:22
Euro 2012The rise in prices during the European Championship will affect virtually all sectors of the economy, but it will be double hard for the residents of the cities where matches will be held. Experts predict a rise in price of food and liquor, respectively the cost the catering and services will also grow. Realtors, taxi drivers, tour guides, the owners of Internet cafes and car rental salons certainly try to make money on foreigners, and along with fellow citizens.

Flight

The cost of travel in new trains, Hyundai, which had been purchased by "Ukrzaliznytsya" specifically for the championship, has been the subject of heated debate. Neither the speed nor the increased comfort of Ukrainians do not rejoice because the ticket will have to pay five times more than before. For example, a trip from Kiev to Lviv will cost 474 USD, although previously it cost UAH 90 in a convenient compartment. A ticket from the capital to Kharkiv will cost 422 USD (previously 103 UAH), and to Donetsk - 564 UAH (instead of 87 USD). Citizens call the prices ruinous, and they call to ignore railway innovations in social networks.

The boycott is unlikely to succeed: with the launch of Hyundai by «Ukrzaliznytsya», 15 night trains were canceled. Of course, you can get the host cities by aircraft, however, air transport can hardly be considered an alternative - a flight from Kiev would cost a minimum of 1.2 thousand UAH. Experts predict that the fans will use buses and intercity buses. However, the owners of this mode of transport said about the price increase. Given expensive fuel, it is naive to believe that the carriers won't raise the rates.

"Shadow businesses" services near rail and bus stations will be the first to rise in price.

For example, in Kyiv today you can easily hear a taxi driver's phrase: «Twenty Euro». And just realizing that this proposal is not appropriate, a taxi driver sighs: "Well, will you pay at least thirty hryvnias?". Obviously, this will involve legal carriers.

Transfer in the city won't be cheap as well. By arrival of tourists, local authorities plan to legalize taxi service, as 50-90% of drivers in large cities are working in this business illegally. This innovation will increase rates for the carriage at least by 30%, as calculated by Donetsk regional branch of the union of taxi drivers. But even without this, taxi services in the cities of EURO 2012 want to increase fares by half. For example, a kilometer of travel in the capital during the games is estimated at USD 11 UAH instead of the current six, and in Donetsk - to 7 UAH per kilometer instead of 3.5 UAH.

Housing business

It won't be easy for hotel business to get money from football fans. Anti-Monopoly Committee, the Ministry of Infrastructure, Economic Development and the Organizing Committee of Euro 2012 in Ukraine promised to closely monitor the rates for rooms. In such circumstances, it was not possible to inflate the prices: today in the capital's middle-class hotel double room costs 70-80 Euros, although in the early spring the hoteliers told that the minimum cost of accommodation will be 150-180 Euros per day. However, these statements scared away the tourists. According to the Director of Ukrainian organizing committee of the tournament Markiyan Lubkivsky, half the hotel rooms in the cities are free on match days.

Real estate agents are rubbing their hands in anticipation of profits. There is no risk, in contrast to the hospital industry, so the price of renting an apartment in June, will go off-scale. View current prices for Kiev apartments for rent you can on this site: http://www.accommodation.kiev.ua/ . According to the consulting company SV Development, housing for rent during Euro 2012 could grow 5-6 times. Now, two-bedroom apartment in the capital costs $ 250 per day, although winter price was 400 UAH. The appetites of Donetsk, Lviv and Kharkiv realtors are more modest: a flat costs $ 130-150 per day. By the way, the owners of apartments are going to earn money as well: there are rental announcements for fans on the Internet. Its cost is $ 50 in the suburbs and from $ 80 - in the host cities.

Food

Food will become more expensive during the World Cup less, but not significantly. The average price increase will be about 15% due to market speculation of traders. Fresh vegetables and fruits from in the market will be much more expensive than in the supermarket. For example, our local strawberries in the high season can cost about 30-35 UAH per kilogram, although usually in June, it becomes cheaper, 15-18 UAH. With regard to food baskets, Ministry of Agriculture and Food of Ukraine has recently promised price stability in general. According to the Director of the Department of Economic Development of Ministry of Agriculture Sergei Petrenko, the government has sufficient leverages to prevent fluctuations in food prices during the World Cup.

But not everyone will be able to eat outside the home. The Head of Research Department of the consulting company "AAA" Maria Kolesnik believes that at the time of Euro 2012 catering business and public catering available to ordinary citizens will increase the price. This is due to the mentality of people in Europe - they are accustomed to eating in restaurants, cafes and bistros. The owners of Ukrainian public catering will not miss a chance to earn extra income, so the standard menu prices will be increased by 15-40% depending on the "ethnic nationality of cuisine". For example, sushi and pizza will rise in price slightly, but the traditional Ukrainian borsch, dumplings and chicken Kiev can become more expensive by one and a half times.

Alcohol

It's cheaper for football fans to drink beer before the matches, because strong alcohol can become much more expensive. The government intends to increase the minimum retail prices for vodka, cognac and wine. The cheapest bottle of vodka in this case will cost 30.5 UAH, a three-year cognac - UAH 39, and young wine - 22 UAH. "It is reasonable to expect changes in the excise policy, because it is difficult for the government to meet all budget spendings" - says an analyst at Erste Bank Marian Zablocki.

The representatives of alcohol business are not happy about innovation. For example, the director of the association "Ukrainian Growers and Winemakers," Sergei Mihaylechko predicts in this case the fall in the domestic wine market by not less than one-third. Worst of all, that cheap drinks manufacturers will be forced to work in "gray" market. The number of legal products in the stores will decrease, and hence, the same fans, trying Ukrainian alcohol, risk poisoning. Alcohol manufacturers believe that raising the minimum retail price does not fill the budget, but only hit the industry, and perhaps the image of Ukraine.

Tours

Ukrainian service had high hopes for Euro 2012. According to the calculations of the State Agency for Tourism and Resorts, an increase of tourist flow into our country due to the championship could reach 30-40%. Tour operators are actively preparing for this: they develop new routes across the country and gradually raise the price. It is expected that foreign fans would like to see the Crimea and the Carpathians, visit the Chersonese, visit the famous fortress after the matches. Therefore, short weekend tours in June will be more expensive, by 15-20%. Guides in host cities will have more work and money. For example, 134 tours were worked out for fans in the capital.

Foreign tourists will be able to travel across Ukraine independently. However, it will be expensive - car rentals will become also more expensive. "Renting a car is very popular among at European tourists. Therefore, some companies have started to raise rates in connection with the forthcoming Euro 2012, but closer to the championship the prices will rise by 50-60%. Rise in price will last for one or two months. This happens in all countries holding similar events", - the expert of the Association of Lessors of Ukraine Roman Ivanenko reported.

In addition, some experts predict a rise in prices of Internet cafe services, in the night clubs and even hairdressers. "Greed can capture absolutely all entrepreneurs. Especially, small and medium business will be subject to it, which hope to get almost an annual income for one month. Therefore, grandmothers selling sunflower seeds at the crossroads can rise the price - jokes Kolesnik. - However, the price rise will decline rapidly when businessmen realize that it's not foreign oligarchs and Arab sheikhs, but usual and often not well-off fans who came to take part in Euro 2012".

Out of sight - out of the Euro

The only thing that can fall in price during the period of the championship is the services of advertising agencies. Advertisers will be left without their key customers - alcohol and tobacco companies. Deputies took two bills immediately that prohibit broadcasting of commercials advertising alcohol on television and radio during the day, as well as sponsorship of alcoholic brands, all tobacco advertising. In addition, it is strictly forbidden to smoke and sell cigarettes at Euro-2012 events.

Championship will bring less profit than Euro-2008

UEFA expects that its revenue from the final of the UEFA European Football Championship in Ukraine and Poland will total about 1.345 billion Euros. That's 6 million Euros less than the organization earned from the previous championship, which in 2008 took place in Austria and Switzerland.

UEFA profit from the sale of corporate packages that include tickets and special boxes for VIP-persons at the stadiums, will decline especially noticeable. At the previous championship organization received 155 million Euro from the sale of such packages, while at Euro 2012, it expects to gain only 100 million Euros. According to forecasts of UEFA, revenues from the sale of commercial rights can be reduced by 4 million Euros to 290 million euros, while revenue from television broadcasting rights will grow by 5%, reaching 840 million Euros. And the ticket sales will increase revenue of the organization by 14% - up to 115 million Euros.
 

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Ukraine (Ukrainian: Україна, transliterated: Ukrayina) is a country in Eastern Europe. It is bordered by Russia to the east; Belarus to the north; Poland, Slovakia, and Hungary to the west; Romania and Moldova to the southwest; and the Black Sea and Sea of Azov to the south. The city of Kiev (Kyiv) is both the capital and the largest city of Ukraine.
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