Price Discrimination, Part II

Last month we reported that American divers visiting Walindi Plantation in Papua New Guinea are charged about 50 percent more than Australian divers; this even applied to walk-up divers, who weren't quoted a rate until they identified themselves as Americans. Proprietor Max Benjamin responded, offering this rationale:

All diving wholesalers world wide receive the same pricing in U.S. dollars except Australasia, which is quoted in Australian dollars. I have not adjusted for currency changes in the drop in value of the Australian dollar, which in effect makes it cheaper for Australian residents. By not adjusting the Australian rate, we have increased our number of Australasians to nearly 20 percent of total clients. This is a conscious market decision on my part. Last August Mt. Pago, a volcano near my airport, Hoskins, erupted which had the effect of virtually closing the resort for six months. As a result I am further guilty of offering even greater discounted trips for the Australian market to restore some financial stability. These discounts were not offered in the U.S. or any other market, as the high cost of airfares to get here negate the effect of the desired discounted package. Due to the precarious financial situation at the resort, I do not intend to change my pricing policy for Australasian residents at this time.

It has been a great 12 months: volcano, war, SARS, and now Undercurrent.

Yours Sincerely,
Max Benjamin