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August 2003 Vol. 18, No. 8   RSS Feed for Undercurrent Issues
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Discriminatory Pricing

from the August, 2003 issue of Undercurrent   Subscribe Now

Discriminatory PricingOne of the worst kept secrets in dive travel is the discriminatory pricing policy of various dive operations in the South Pacific. Quoted rates have varied widely depending on where travelers book from. Americans and Japanese pay the highest tariffs, subsidizing cheaper packages for Europeans and locals.

For years, one of the more notorious multitiered prices was Mike Ball Expeditions out of Australia. On the aptly named Mike Ball boat Spoilsport, Americans and Japanese were charged 20 to 30 percent more, depending on prevailing exchange rates, than what others paid.

Company spokespersons often explain this twotiered pricing by blaming higher marketing costs in the U.S. and Japanese markets. Some special services, such as Japanese interpreters, were also cited. But mainly it seems the company believed that Australians and others wouldn't pay the kind of rates Americans and Japanese were willing to pay.

Mike Ball sold a majority interest in the company in 1990 and is still a director but is no longer involved in day-to-day management, although he hosts a dive trip occasionally. General Manager Stan Kielbaska confirmed to Undercurrent that while the company "did have different prices for different parts of the world," since 2002 Mike Ball has been offering one rate in Australian dollars (AUD) with a converted rate in U.S. dollars (USD) for the American market.

Unrelenting pressure by savvy travelers and industry insiders, as well as bad publicity on the Internet, helped change the company's policy. We spoke with both an American and an Australian travel travel wholesaler who book Mike Ball live-aboard trips and confirmed that they had received and forwarded numerous complaints to the company. We also confirmed that Ball's prices match up when converted from AUD to USD.

Yet discriminatory practices still occur. Reader Vann Johnson recently stopped at the Walindi Plantation Resort in Papua New Guinea as part of a Peter Hughes dive package. He asked Shanda, the manager, for the "rack rate" for his bungalow for two, and she replied, "It would depend on where you're from." When Johnson told her he came from Raleigh, VA, she quoted him $153 USD/person/ night (including meals), leaving him to conclude that "U.S. citizens are paying through the nose."

Johnson wrote to Peter Hughes about this incident and received the following reply from Hughes vice president Sue Hamilton: "I'm guessing there was some type of miscommunication. Because of the strength (or weakness) of the Australian dollar over the past couple of years, they do enjoy a lower price, but I'm told the Australian dollar is increasing and shortly will most likely be on par with the U.S. dollar. By the same token, Europeans who choose to pay in euros actually pay about 15 percent more than Americans. This is not discrimination, just the differences between currencies. I hope this helps clear this issue."

Discriminatory PricingUnfortunately, this has little, if anything, to do with the difference between currencies. We e-mailed Walindi and got the same $153 quote for a bungalow for two. Then a colleague e-mailed from Bali and was quoted 163 AUD -- about $108 USD. And while the Australian dollar is gaining strength against the U.S. dollar, it is years -- if ever -- away from parity.

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