The Norwegian Star sits at Vancouver's Canada Place cruise terminal, where it will not be able to berth during the Olympics. (CBC)

Vacant hotel rooms will be very hard to find in B.C.'s Lower Mainland during the 2010 Olympics, but an Alberta company that is chartering a cruise ship to use as a floating, 1,100-room hotel in Burrard Inlet has had to slash its prices by half in an apparent attempt to draw more guests.

An Edmonton-based company, Newwest Special Projects, has leased the cruise ship Norwegian Star for the Vancouver Games. The initial price being charged to stay on the ship was $700 US a night per person. That has now dropped to $650 US per night for a room, including meals, CBC News has learned.

Travel industry experts said it costs at least $10 million to charter a cruise ship for a few weeks. That price would go up if the shipboard casino was not used or if the vessel had to travel a long distance to the charter destination.

The usual berth for cruise ships in Vancouver's port, at Canada Place, is within a high-security zone for the Games. The alternative commercial berth is at the Ballantyne Terminal, but that will be occupied by a cruise ship leased to house Games security personnel.

So the ship has had to find another parking space, at the industrial docks owned by the resource company Kinder Morgan in North Vancouver.

Kinder Morgan uses its terminal to store up to a million tonnes of goods at a time, including agricultural products, pulp and paper, and up to 175,000 tons of bright yellow sulphur, stored in huge mounds.

View will be 'fantastic'

Newwest says the appearance of the terminal is not likely to scare potential guests away.

These mounds of sulphur could be part of the North Vancouver view for some guests aboard a floating hotel during the Olympics. (CBC)

"It's an unencumbered view of downtown Vancouver, and it's absolutely fantastic," Newwest marketer Tamara Castellano told CBC News.

"On the starboard side you have to remember the ship sits 55 feet above the ground, so you will be looking over anything that is going on in the shipyard out over the mountains," Castellano said.

Views looking toward Vancouver will include downtown and Stanley Park.

Guests will have to pass through security to get on and off the vessel, and they will have to be be bused to Lonsdale Quay in North Vancouver to hop on the SeaBus in order to travel to Vancouver.

Castellano does not deny there's been a price reduction, but could not say whether it was driven by slow sales.

"Our prices for groups have been reduced by half," she said.

Castellano said Newwest was now marketing to travel groups rather than individuals.

The company's investment could pay off , if the price is right, according to Tourism Vancouver.

"If people perceive that the value isn't there, no matter what kind of accommodation they are not going to pay it, it's as simple as that – and that's lessons learned from previous Olympic Games," said Walt Judas, Tourism Vancouver vice-president.

Newwest will have to beautify the buildings next to where people arrive at the ship, provide an accessible gangway and reinforce the dock to accommodate a ship of the size of the Norwegian Star.

"We're essentially taking the entire cruise ship terminal that you see over at Canada Place and moving it to a shipyard," Castellano said.