Retail price maintenance

Retail price maintenanceJade Ho (17) Natalie Hui (18)6A

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

Stakeholders

Hotel industry

There is very little variation in prices.

No price competition will take place within the hotel industry Avoids price war

Effects

EffectsStakeholdersConsumer 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.

END