Should foreigners pay higher prices?

A few years ago, I fronted up to Delhi’s Jantar Mantar, a stellar remnant of India’s Mughal past. An Indian by birth and ethnicity, I handed over the ‘local’ entrance fee – about US$0.10 – only for the guard to laugh and demand the much higher ‘foreigner’ fee (US$2). My protests were brushed aside: I could not produce an Indian passport, and my Hindi was horribly accented. So the foreign price it was.

Though initially infuriated, I began questioning whether this was really unfair treatment. I moved quickly from wondering how legitimately ‘Indian’ I was to contemplating whether charging different groups of people different prices – based on nationality – is a justifiable practice.

This debate has played out several times on our Thorn Tree forum, with members sparring over whether extra charges are ethically legitimate,how problematic ‘different’ fares actually are and why governments defend such practices.

As the ‘ripped off’ visitor, it’s easy to be indignant. You are paying more for the exact same experience. You are being discriminated against owing to your nationality (and sometimes, more problematically, your ethnicity). You feel as though you’re getting a raw deal.

But before you feel duped, consider these two questions:

Who ‘owns’ public attractions? It’s hardly unreasonable to assume that citizens of a particular country can lay priority claim to assets belonging to that country – from welfare support to membership in certain organisations. Following this logic, it seems fair that a citizen has priority right of access to something like a national park, owing to ‘collective ownership’ of the park. And they’re almost certainly paying taxes that support it. This preferred right of access might manifest itself in a reduced access fee.

Is this just legitimate market segmentation? Few people bat an eyelid when private train tickets cost less for students, or cinemas offer reduced-fee entry for senior citizens. But these institutions are generally not discounting for the greater good: they’re doing it to maximise profit. If you’re running a business, you’d ideally charge each consumer the maximum price he or she could afford for your service. That’s practically impossible, so segmentation is the next best thing. You divide up your consumers into groups based on ability to pay, and you adjust prices so that you extract the most money possible out of each group. (If you think this sounds horribly unfair, keep in mind that consumers generally have similar powers of choice based on businesses’ abilities to offer an attractive price.) Viewed in this way, charging foreigners higher fees is a crude tool, but it makes economic sense for the providers.

So what does this mean for you, the traveller? Short of perfecting a local accent, your choices are limited. It’s not as though you’re going to get the laws changed anytime soon. Therefore, you have to figure out where you stand on principle, then balance that with the enjoyment you might be passing up.

It’s safe to say that the vast majority will continue lifting an eyebrow, perhaps letting out a peeved sigh, and forking over the additional cash. In my case, experiencing a crumbling royal observatory in the midst of the chaotic Indian capital was definitely worth it.