State what market structure exists in the hotel industry in Jamaica during the 1990s. Can excess profit be earned in this industry in the long run. Explain.
During the 1990s, the Jamaican hotel industry was one dominated by three players: Sandals, RIU and Grande Bahia. The three firms have further distinguished themselves in niche categories such that Sandals offers discounts for children under thirteen, RIU is an adult only hotel and Grand Bahia caters specifically to couples. It is an increasingly competitive market whereby firms are fighting just to maintain current market share. However, when new firms attempted to enter the market, the main players had an unspoken agreement to keep prices within a certain range to ensure they maintained their stronghold in the industry. Since the early 2000s, there has been a rise inthe availability boutique hotels as well as bookings via Airbnb. As a result, the three main players have seen a reduction in their market share as touristshave gravitated to these more cost-effective options.
State what market structure exists in the hotel industry in Jamaica during the 1990s. Can excess profit be earned in this industry in the long run. Explain.
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