pinniped

Well, "gouging" is a loaded term, but the motivation is indeed the same: you're charging different amounts to different market segments based on what that segment will bear.

If the segmentation can legally be enforced, and the act of doing it isn't considered too distasteful by society at large (even if legal), it can work out well for the business.

And I think we all agree there are (usually) ways to do phrase it and apply it so that it's legal. The airline case in the OP is probably handled by the website domain (if it's actually done by UA, AA, etc.), not the passport or ethnicity of the buyer.

Tchiowa

OK, "over-charging" instead of "gouging".

It not only works will for the business but also for the customers.

Once you have fixed costs covered by your normal customer group you can then target new customers with lower costs designed only to recoup incremental costs.

pinniped

Well, it certainly works out well for the customers who can find their way into the lower-cost segment.

Tchiowa

I say it works out well for all because if the business manages to increase its customer based significantly then by "economy of scale" they can provide a better service to all, reduce their incremental costs thus allowing them to reduce costs for all, or some combination thereof.

There are actually some really, really ugly equations to show how this works but at my age I refuse to perform any more differential equations.

pinniped

I agree in some contexts - as when the different segments use the product differently. In a very simple example, a hotel may have three guests at very different price points - a business traveler on a corp rate, a leisure traveler on the hotel's own nonrefundable rate, and a Priceline guest. They all are fully aware of the existence of the others, but they chose their rate based on their needs knowing that each rate delivers something different. The fact that the hotel can sell to all three benefits both the hotel and the guests. All three of these hypothetical guests would see this system as fair to all as well.

I too recall the equations from grad school...airline and hotel yield management often being the examples used. They were usually applied to a situation slightly different than just discriminating against someone based on where they're from, but I'm still not convinced that the U.S. legacies are really doing this the way it was described in the OP. (e.g., on a simple U.S. domestic flight...)

dvs7310

I get the point you're making, but not always. When the leisure traveler becomes aware that some corporate rates are fully cancellable until xxPM on the arrival day, include breakfast (for non-elite members), and are still cheaper than the 30% off sale, non-refundable rate that the leisure traveler paid. My partner's Hilton corp rate is exactly like that, at least in Asia it typically rings in right below Hilton's non-refundable rates including most sales. I don't think her rate gives last minute guaranteed room availability though which I think some of the higher priced ones do.

Notice the OP hasn't come back and said a word since the original rant. I have a feeling they were told to bugger off more than once in their quest for equality for all.

Tchiowa

Nor am I. I speculated earlier in the thread that his may be someone trying to take another bite at the UA FC TATL from Denmark mistake fare.

dvs7310

I looked at the other posts the OP made, they seem to reside in mainland China, so I'd take a stab and guess its something like BigFlyer brought up earlier in the thread.

slawecki

the rates for tatl flights are quite different for east bound and westbound. the rates to get into museums are different for citizens and guests in many cities. hey, man, life is just not fair.

MSPeconomist

At least in the past, some intraEurope airfares were discounted for people with certain passports who also had work permits (and therefore some form of temporary residence visas). In particular, there were significant discounts on fares from Germany to Spain (IIRC LH but it could have been IB or both) for "gastarbeiter." I know a visiting professor who was offered (and used) the discounts.

WhiteLightsLeadToRedLights

I understand that prices often vary for different markets. However, typically long-term residents of a country are treated the same as citizens. For example, anyone with a US credit card/mailing address is able to purchase as part of the US market.

WhiteLightsLeadToRedLights

It was a Delta sale for flights from China to the US (various routes). If one purchased two tickets at once, the price was much cheaper.

BRITINJAPAN3

I think its fair, we just dont like it unless we are on the right side. this is just supply and demand and good business practice.

BRITINJAPAN3

Why would you say typically ? I think this is plain wrong to say typically and I speak as someone who has lives as a LT resident of US, Japan,Singapore and UAE

WhiteLightsLeadToRedLights

China