Retail price maintenance
6A
Jade Ho (17) Natalie Hui (18)
Summary of the news
• In 2010, UK’s Office of Fair
Trading investigate allegations of resale
price maintenance in the hotel industry
• Nowadays, the sale of hotel rooms over
the internet has become popular
• The hotels have been forcing those
websites (in this case, skoosh.com) to
set the price at the “cheapest” minimum
resale prices
• Skoosh.com either have to raise prices or take
the hotels off their list
You have to set according to our
suggested price! Otherwise,
we’re not supplying rooms to
you!
Hotels
Skoosh.com (hotel rooms retailing website)
Effects
Under resale price maintenance,
hotels themselves imposed a
minimum price on online hotel room
sales
Effects
Stakeholders
Hotel
industry
There is very little variation in prices.
No price competition will take
place within the hotel industry
Avoids price war
Effects
Stakeholders
Consumer
Consumers may look at several websites
and see the same prices advertised.
Positive:
They can pay the same price wherever
they use the online hotel room sales.
Information cost could be saved.
Negative:
The price set by the hotels may higher
than the market price, so the price paid by
consumers increased.