A hotel manager has set a rack rate for all rooms in the hotel of $149 for next year. Corporations, conventions, and conference groups were advised that early next year the rack rate charged could be reduced to a lower rate of $99, and the potential reduction will depend on the volume of business they provide. Travel agencies, which book a large number of hotel reservations for independent travelers, were advised that room rate discounts are available for $139, $129, and $119, with restrictions. The travel agencies were also advised that rooms booked at the $149 rate would increase their commission to 15%, rather than the normal 10% for a discounted rate reservation. Individuals that telephone the hotel directly for a reservation are first quoted the $149 rate; however, employees booking reservations have been trained to lower this rate to $139, $129, and $119, but never lower than $119. In addition, room-booking employees are required to advise potential guests of the restrictions that apply at each rate level.

Discuss the ethics of this situation.