japan times...Tuesday, July 4, 2006


THE ZEIT GIST
Travel firm rapped over foreigner ticket policy
Top travel agency charges foreigners more for 'discount' air tickets


By VANESSA MITCHELL
The nation's largest discount travel agency, HIS, which also runs foreigner-friendly No.1 Travel, has based the price of some air tickets from Japan on the nationality of the traveler, possibly in breach of Japanese law, The Japan Times has learned.


Holidaygoers line up at airline check-in counters at New Tokyo International airport, Narita. AP

Foreigners trying to buy discount tickets through the company were quoted higher prices than Japanese customers purchasing discount seats on the same flight.

The policy came to light when the company offered a discount ticket to Los Angeles over the telephone to a Japanese caller, but said it was no longer available at the quoted price after finding out a Canadian was the intended traveler.

It then informed the caller that the price for the ticket would be higher for a non-Japanese customer.

However, Japanese Air Law, Article 105, Paragraph 2, clearly states that "no specific passenger or consigner will be unfairly discriminated against."

The company, which has acknowledged the ticketing policy, has defended its actions, denying ticketing pricing discrimination and suggesting foreign customers pose a threat to profits.

Jason, a Canadian resident of Japan, wanted to fly on All Nippon Airways to Los Angeles just after Golden Week and asked his Japanese girlfriend to
check for cheap tickets online.

She eventually found a return ticket to Los Angeles listed on the HIS Web site for 57,000 yen.

Jason's girlfriend called HIS in Shinjuku to find out if the tickets were still available and was told that they were. She relayed this information
to Jason in English.

"She was speaking to them in Japanese and then talking to me in English," he said.

Soon after, the sales assistant asked if the ticket was for her, and, having been told it wasn't, asked about the nationality of the person who wanted to buy it.

Jason's girlfriend explained that the customer would be Canadian, and was promptly told that the ticket "is not available, and (that) the price for a non-Japanese person is 70,000 yen."

Surprised, the couple confirmed that this was the case by contacting No.1 Travel in Shinjuku, an affiliate of HIS. They then reconfirmed the company's policy with HIS in Iidabashi.

"With corporations as big as HIS there's a lack of communication and one person will tell you one thing and another person will tell you another.
That's why we checked it three times," he said.

When the couple asked why the prices for foreigners and Japanese nationals were different, they were told that the tickets were part of a package tour which had been canceled and that HIS was now selling the tickets to Japanese people only.

The couple are baffled at the explanation given.

"This is a strange story. There is no reason for these tickets to be cheaper for Japanese people than foreigners.

"They're boarding the same plane, eating the same food and getting the same service. There's no way that foreigners treatment would be any different to that of Japanese."

"They're reasoning or their justification doesn't make any sense, it doesn't satisfy me," says Jason.

"I live and work in Japan, and I pay the same taxes, I should be entitled to that ticket price," he said.

But Yukie Kinokuni, from the Corporate Planning Department of H.I.S. Co., Ltd., argues that business concerns, not discrimination, dictated the pricing policy.

According to Kinokuni, foreigners buy return tickets because they are cheaper than one-way tickets. They then return to their countries and don't use the return portion.

"In this case the airline may charge us the full fare which means low profits or a loss.

"So in order to avoid the risk we restricted the tickets to Japanese only customers, who will definitely return to Japan."

In doing so, they don't feel they were being discriminatory.

"We have never thought of ourselves as being discriminatory," said Kinokuni.

The ticketing policy has surprised both ANA and the Ministry of Land, Infrastructure and Transport, who both claim they had no prior knowledge of the company's actions and have demanded it be stopped.

Although HIS sets ticketing policy, it is ANA that is liable under the law for fines associated with ticketing discrimination, according to a spokesman for the Aviation Industries Division of the Ministry of Land, Infrastructure and Transport.

But ANA has denied any prior knowledge of the practice, describing the ticketing policy as "hard to understand" and pointing the finger of blame
at HIS.

"The first time we heard about this was when you contacted us and asked us about it," said Toshiki Yamamoto, Manager of Public Relations for All
Nippon Airways Co., Ltd.

"We fix our prices, as far as we know according to the law. We can't control the retail end and what price they are setting.

"If they are selling in that manner, we are going to have to tell them that they can't do that, but as to where the responsibility lies, if they're
selling it at a price that they are fixing, I think the responsibility lies with them," said Yamamoto.

HIS confirmed that ANA was not aware of the policy, saying the company does not report back to ANA and is wholly responsible for setting prices and the conditions of their own tickets.

But it was also quick to deny responsibility, with Kinokuni stating: "We don't recognize that we sold prohibited tickets. Therefore we are notliable for a fine."

Boo! Never used them anyway, but that sucks.

That is pretty crappy timing as just booked a ticket through them about 5 hours ago!!!! Having said that they were the only company who could find me a ticket and also the cheapest price at short notice (or maybe not had i phoned in Japanese?!?!?! :rolleyes: )
Unfortunately I am not really shocked about this kind of behaviour here anymore!!

call them back and say that you were lied too thus you are canceling your purchase. se what happens then.

i used to use them alot but i always ask for quotes from everyone the scary thing is that they are all pretty much the same price. id say that everyone is doing it. check with your airlines

I don�t want to be the devils advocate, but�..
Isn�t that a standard practice in your country? I am not very proud to say that, but in Greece �foreigners� pay usually double or even triple time the price than the locals�..and also usually never makes it to the news�..

Tsonda... NO! In Oz everyone travels smae price.

I just went through HIS because my J mate arranged the trip for his wedding thru a mate there. Got the best deal I've had so far, so no complaints from me.

lol Oz people must be really honest then.
I went into a shop last time I was in Greece to buy some souvenirs to bring back to Japan and I was told from the owner that the prices on the items are for foreigners. I got them for less than half the price. Also, I asked a Greek friend of mine to book me hotels etc and also paid less than the price they were charging officially.

im not going to greece now

Why the boo-hoo knee jerk reaction? It isn�t racism, it�s economics.

As a non-Japanese speaking foreigner living in Japan I would expect to be charged more by the only English speaking travel agent. In my opinion, they have every right to price their service where there is equilibrium between demand and supply. The commodity is not seats on a flight, rather it is English speaking agency services. If you don�t agree then use another English speaking agency. You might then learn a something new about the supply side of the equation.

Shop owner in Surfers Paradise (in Australia) are famous for jacking up prices the moment a Japanese bus load arrives. They know that Japanese are gullible and even if they do smell a rat, are too polite/shy to complain.

Go to Hertz.com and select America as your county of residence. Then get a price for a 3 day car rental in Germany. Now clear your cache and do it again, this time selecting Germany as your country of residence. The price for Americans can be up to 4 times higher.

damn germans

the boo-hoo knee jerk reaction is to the fact that they are in violation of Japanese Air Law, Article 105, Paragraph 2, which clearly states that "no specific passenger or consigner will be unfairly discriminated against."

the boo-hoo knee jerk reaction is to the fact that this "ticketing policy has surprised both ANA and the Ministry of Land, Infrastructure and Transport, who both claim they had no prior knowledge of the company's actions and have demanded it be stopped."

the boo-hoo knee jerk reaction is in response to HIS's ignorant, and dismissive, "We don't recognize that we sold prohibited tickets. Therefore we are not liable for a fine", stance.

the examples you have stated do not justify anything. they just demonstrate more acts of discrimination that you seemingly condone.

In my opinion it isn�t unfair discrimination. It is quite fair and justified by the system of free market economics that is practiced in Japan. It is a matter of demand and supply for English speaking travel agent services. That the law prohibits it is quite amusing to me. The same law should be equally applied to a whole host of other products and services that are differentially priced.

I think it was silly of HIS to charge a higher price for the actual ticket when they simply should charge a uniform price for the ticket and a higher commission for any sale to a non-Japanese speaker. There is a big difference.

Try buying a car in Japan using a gaijin broker. You will pay for the English speaking service.

My examples were not intended to justify anything, they were simply examples of differential pricing practised by an American company (to the disadvantage of its own citizens) and of Australian shop keepers.

I do however condone the higher price charged for travel agency services in English. That is perfectly fair.

This is not a statement that Free Market capitalism is fair. But whilst that is the system of trade in Japan, the HIS pricing strategy is a fair one (on the basis of rational interpretation. I admit that on the basis of feelings, it does not seem fair at all.)

no 1 travel staff isnt highly pad i think the staff turn over is horrible. One price one system im more than happy to just speak japanese if it saves me 200 bucks. id also like to know that though. as a person that will be a long term resident here i think that knowing what the actual price is important. when i book a holiday for my wife and am i paying 30% more cause im not japanese. would i have saved more money if my wife booked it? those are valid points i think. The fact that there is a law that says no one should be charged more is an important point. One price for all no matter what... if that is the law then it has to be followed.

le spud: This story is not about No1 Travel which is affiliated with HIS and does provide English (and other) language service. This is about the plain old HIS travel agency service in Japanese.

It's still better than being put on a no-fly list and not being told why you're on it, or even that you're on it...

This is a bizarre one in that according to HIS, dealing with foreigners carries more risk. It's not about whether matey boy has the same chicken or fish on the plane. They say its about his risk of dropping them in the shit with the airline. In that sense, it may not be "unfair" discrimination. Thats what the law is about.

I never use HIS because they don't take credit cards. Free insurance for my family if I use mine.

Which cc is that Mr wiggles?

most cards i think

A rather dire and embarrassing failure to understand the difference between public and private duties and rights...

News item: The foreigner then became hysterical shouting, and trying to force his way down the aisle. "I live and work in Japan, and I pay the same taxes, I should be entitled to sit next to echineko! That is echineko I'm sure!" he said.

damn. my gf needs to buy a ticket to Thailand today, so I called No1 for quotes yesterday - they seemed ok value, and cheaper than the internet, but it sucks to know that you might be being chanrged more than necessary...

in unregulated countries one expects sharks and cheats... but in travel agencies in the UK it makes NO difference what nationality you are.
that is just f#ed.

spud - your arguament would make sense if HIS charged higher accross the board, for their service of English speaking staff, but to offer different prices to different nationalities based on their PREDICTED BEHAVIOUR (not using the return parts of tickets) is indefensible - especially if you then deny the practice!

being charged 2000 yen to use VISA by No1 is a pain but you pays your money and makes your choice.

My thoughts there too O11. What do paying taxes in Japan have to do with the issue?

Agree with Spuddy and Mr W. This is a economic decision and not a racial one.

The way the system works is that the wholesellers get a rate from the airline, they then add their fee and give a net rate to the agents. The agent then adds their commission (which they are pretty much free to decide) adn resells it to the customer.
The cheapest discount tickets as supposed to be sold in conjuction with a hotel or a rental car as a package deal, but this is never enforced.

The cheapest tickets are the return fares where the wholelseller has purchased a block of seats from the airline and flogs them off to the agents. The problem here is that the blocks are return flights, and one of the conditions on the sale is that both the outbound and inbound leg as used. If not then the travel agent may be liable for the difference in airfare between the discount fare and the normal fare. When you think that the normal fare TOKYO - LA is about 150,000yen (off the top of my head), you can understand their reluctance to sell to people who may only use it one way.

What has obivously happened in the past is that a percentage of non Japanese have used them one way and the agency has had some strife. The big wigs at HIS would have sat down and had a pow wow and due to their limited foresight and intelligence decided that the only way to get around this problem would be to either sell at a surcharge or only allow non Japanese to book fares that do not have penalities of the return fare is not used.

There are ways around this if HIS had stopped to think about it. All they'd need would be a credit card guarantee (but MR W says they don't accept credit cards)and explain to the customer that their card would be debited for the full fare if they didn't use the return portion.

But - why are they penalized if someone doesn't use the return end of the ticket? What's the loss for the airline? The only diff is one less person on the plane (and if not confirmed they may give that seat to someone else), one less meal (again assuming they know in advance that person hasn't reconfirmed the flight), and less baggage weight. Ticket is paid for, so what's the deal? And - why should one way be more expensive anyway? Isn't the extra price (on a return ticket) supposed to be for fuel and service and the actual seat?

At any rate if they check the status of the traveller they can see if that person is likely to come back to Japan or not. Of course someone might let go of a return end of a ticket and still return to Japan (via another way for whatever reasons....).

But again, I don't understand why the airlines lose out if someone doesn't use a return flight to the degree that they penalize the agent.

Sunrise:
The discount ticket industry in Japan is back in the dark ages. I agree it is stupid but this is not the agents fault as the airline sets these conditions.

The whole idea that a return ticket is cheaper than a one way ticket is illogical, but it happens.

You beat me to it I was just about to ask the same.

It would have been that way if the airline knew that the person isn�t travelling back. As long as you have a reservation, they cannot book your seat to someone else (although overbooking is something common to many airlines). So this means that they are loosing money because they have kept empty for you one seat that you were not planning to use anyway. If of course you notify them that you are not travelling back, then you will be asked to pay the difference between the one-way and the return ticket price.
What is stranger to me is why on earth the one way ticket is more expensive than the return ticket in the first place.
For example imagine if the return ticket for the trains would be cheaper than the one-way.

Well next time im gonna book then my wife is going to book. i want to see what they chargeb

The discount air ticket business is too cut throat now. Most agents used to charge a 10% commission, but now it is down to 2-3,000yen per ticket.
You need to sell a whole lotta tickets to make any money. Which is why we got out of it.
Also the fare calcultations now are so difficult with Airport tax, insurance, fuels surcharges that if you make a small mistake you wipe out your margin and end up losing on the deal.

That's what I meant - I realise it's the airlines doing that - but WHY? And sure, they could put someone else in the seat, BUT if the said person was flying back on a return ticket they'd purchased there would have been someone in that seat anyway.... so the idea is to reconfirm the flight, and if it's not reconfirmed put someone else on it.... Still makes little sense to me since they have a way of knowing if the seat is actually going to be filled

Remember also that nowadays you have to pay all those surcharges up front, so that's already paid for when the ticket is purchased regardless of if it's used.... but I see your point that it's easy to muck up and miscalculate, still, that's up to the agent to be precise about, and we shouldn't have to pay for any occasional mistakes they themselves might make.

I didn't know one way tickets were more expensive, I thought they were around 3/4 the price of a return flight. But I haven't looked lately, guess it depends on the destination.

Sunrise:
Like I say, there is no logic too it. The tickets are supposed to be sold as part of a package and packages generally are returning to the point of origin.
You are right though. It is up to the agent to be precise about it, but you are mostly dealing with unqualifed people, who have not been trained properly (hence the low wages I s'pose).

Gotta say I agree with Sunrise on this. If you have paid for the seat, then you have paid for the seat. That's all there is to it. If the airlines want to make more money from the slight posiibility that you may not board the flight, then they are just being plain greedy. You shouldn't be penalised for their greed. It's like saying "OK, we'll rent you a car, but when it comes back, if you haven't put any kms on the clock, then we will charge you more because we could have rented it to someone else." Bollocks. They got their money. It's up to the purchaser of the service as to how they use it. Now I realise that what I just said actually backs up your argument Miso. It's not the travel agent but the airline policy that is to blame. But, how is it not discrimination against me (being a foreigner) for the travel agent to assume that I might not use the return leg of the ticket?? I live here with a permanent visa. I am being discriminated against if they choose to charge me more than a Japanese. To muddy the waters a bit more, I have two Japanese friends who use these return tickets to go out and don't plan on using the return leg (and have done so repeatedly over the last 10 years). It isn't only the gaijin that do it.

I once got a return ticket for a boat to Latvia and never came back....... it's not quite the same thing though eh..... well actually my mates who took the return boat got a lot more space in our cabin haha.

Actually i booked my NZ flights through No. 1 Travel and wondering about this situation - will test it out next time by getting a J-mate to call up and ask for a quote...... my next flight will be to Vladivostok - which airlines go there anyway?

BP:
I know how you feel, but HIS in their stupidity made a policy decision based on how they thought they could get around a troubling issue. They could have handled the issue better.
All they had to do was get a contractual agreement in place with the customer (Japanese or Non) saying that if the return flight was not used, the customer would be charged the full fare.
If the conditions are there, it's up to the customer to accept or decline them. If they decline them they don't get the cheap fare.

I've had Japanese mates do the same thing, but I imagine that had the figures to back them up on the gajin Vs Japanese aspect of this.

I imagine it was a group of upper level suits, all 50+ yrs, who are totally insensitive to issues like this. Ignorance may not be an excuse, but these guys don't exactly think outside the box. It was probably the only option they could come up with.

i think you have to take the boat. my friend did it, said the visa work was hell. was denied twice with no real explanation despite having all the required hosting and invitation documents.
it is interesting to hear people blame the airline for this issue, despite ANA's demands that HIS cease the practice.

regardless to whether or not this practice is justifiable from a finacial point of view, which it is clearly not, descrimination is never justifiable. lets imagine they went a little bit further and started to penalize individual nationalities on "common" travel practices. would more people get upset about the issue? lets imagine they were creating policies for religious groups and using finicial reasons as their grounds, would more people be upset? i think so.

how far off is the current scenerio really? is discrimination OK if it is broad and sweeping?

there is an option though, choose a different provider. there are others out there; ones that show the airline's quoted prices, and thus cannot shaft you with different "service charges" or "policies".

Misorano, what are you actually saying? You seem to be agreeing/sympathizing with what we are saying yet you say it isn't discrimination. You admit that they could have handled the issue better, but instead a bunch of suits came up with this clumsy policy. Do any of these things make it not discrimination? Take it the extra degree (ie, singling out specific nationalities)as Daver just pointed out and then it is clear disrimination regardless of what the execs intentions were. And you are right Dave, just don't use them if you are aware of such practices. As I said above anyway, I don't use them. I almost always use local Japanese travel agents.

*** sorry off topic a bit folks...... daver - yeh yeh russian visas are a nightmare, i've been to russia before - i crossed the border from estonia to russia and got interrogated and my passport examined for a LONG time - but by far and away the most interesting country i've ever ever been to... i know about the boat it's like totally expensive though - i heard you could fly there, but i'll have to check it out..... ok back to the debate of travel agents....

I flew to Russia's far east from Niigata on (owch) Aeroflot. But I think we flew in and out of Khaborask (spelling) or Komselmosk (spelling), not Vladivostock. If my memory serves me right it was Valdivostock that we took an overnight train to (this was in 1992, so awhile back now).

I was going to buy a one way tix to bali to return to OZ with my wife.
my travel agent suggested a return ticket for almost half the price and to not use the return leg. we did so and it saved us around 6-7man yen.. thanks travel agent!

Sunrise - yeh yeh that's what i thought, out of somewhere like Niigata or Toyama.... haha aeroflot, i cancelled aeroflot flights into Moscow once and ended up taking ground transport along the most pot-holled road in the world. What was eastern Russia like back in 92? i'm so curious about this!!!!

bp:
What I'm saying is that HIS was in a bind. No doubt they were losing money on a certain type of ticket after being invoiced by the airline for no shows on the return flights. They must have had the figures etc that showed the the largest percentages of these were non Japanese.
Based on these figures they decided not to sell these tickets to Non Japanese.
They based this decision on economics, not on race. They were losing money on a certain demographic and chose a course of action to cut their loses.
I think their motivation for this was not racism but $$. That being said there were better ways of going about it that would not have left them open to this criticism.

Daver:
ANA may be saying to cease the practice, but they are the ones setting the conditions on tickets, and the one's invoicing HIS for the no shows.

If they tell the agent that they can sell a ticket, but they will be charged if the passenger fails to show up for the return flight (something the agent has no control over), how is the agent supposed to protect themself?

OK Here's another situation.

Our company refuses to accept credit card transactions from most of Africa.
Is this racist, or is OK because we've been burned several times in the past through credit card fraud?

well you have your reasons and rights to not provide a service to any one you choose. but that isn't the issue.
if you were charging more for the services to all africans then yes, racist.

Daver:
When an agent books a ticket they get data that looks like this:

C9 D6 I6 Y0 B0 M0 H4 Q9 K9 L9 U0 T0

What this is the the various fare categories on the plane. Basically the go from expensive to inexpensive from left to right. But as you move from left to right the conditions get stricter. For example the Y is the full fare economy class seat. With this you can change flights, dates etc right up to the time of booking and get a full refund if you cancel. Once you get to the K and L brackets you are looking at heavily discounted fares with strict conditions.
What HIS is doing is saying that they will not sell the cheapest (above T) tickets to Non Japanese. They will sell them the more expensive tickets with more flexibility (i.e. if they do not show up for the return flight then there is no penalty).
They would sell the same ticket to a Japanese at the same price.

This works in reverse also. Many of the hotels we deal with, in an effort to attract the foreign visitor, have a inbound FIT rate that is usually cheaper than the standard Japanese rate. What they are doing is valuing the non Japanese guest higher that the Japanese guest. The reason being that the odds are a person coming from overseas will stay several nights rather than the 1 night average for Japanese.

Is this racist or just good business sense?

well i will speak with my wallet and not use HIS or No 1 travel anymore. Thats what i will do.

OK Miso, your point is taken and understood. However, just because something is good business sense doesn't mean that that decision isn't at the same time discriminatory. I wouldn't call it a case of racism but a case of discrimination. As you yourself suggested, they should stipulate that extra charges will be born by the user if the return leg is not used, or increase fares across the board to cover their expected losses. Then their policy would cease to be discriminatory. Until then, and as long as they refuse to give me the same price as a Japanese customer then this is discrimination. As for your hotel example, that is discrimination too. If I were a Japanese wanting to stay more nights I'd be pissed if I knew that gaijin were getting cheaper fares because of the company wanting to maximise profits at the expense of fairness to the customers. It is discrimination regardless of the reasoning and who is benifitting (us or the Japanese). Reason and justify it all you want, but it is still discrimination.

Anyway, I will do like FT said and just not use them.

Are differential insurance premiums discriminatory? Based up behavioural characteristics leading to probability of loss, women pay lower car insurance premiums than men. Data and actuarial mathematics supports this business decision.

As for using another agent, I think all of them would suffer the same bind that Misorano described and have to cover the cost somehow. As a business traveller I was always moving around the world with a return booking from which I would use only one leg. It was simply cheaper to buy returns rather than one way, even when we knew that the return date and route was uncertain. The nice girl at work who arranged all the travel was once commented that the agent gets really pissy when we dodnt use the return leg. Now I know why. They didn't complain too much as our company account was worth big $$ to them. (The company I used to work for was BA's biggest single client).

Welcome to the free market and all the laws required to protect us from it.