Curious Spa Pricing

We went to a Dutch spa last weekend, having gone to a very similar German spa in March, and enjoyed swimming and sauna-ing. The day price for us senior citizens (65 and up) was $19.50, as compared to $31.50 for younger people. At the German spa, the senior discount was far less; and it only applied during the day, Monday-Friday. Why the difference, given the similarity of potential client base and services offered?

One possibility, I am told, is that the Dutch government subsidizes the spa owner to increase demand from older people, and the German government may not. Regardless, the Dutch policy does not take advantage of variations in the timing of demand from younger people, so that the spa is very crowded (with older people as well as young) on weekend evenings. Both spas are engaging in price discrimination by age, but the discrimination doesn’t seem to be as rational at the Dutch spa as at the German spa.

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  1. Spa Getty. says:

    A display of chutzpa perhaps.

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  2. Tom Woolf says:

    The Germans realized that a discount was useless – the seniors would all be at home watching Jeopardy and Wheel of Fortune during the evenings no matter what the price.

    (I guess the Dutch have not yet caught on to the broadcast sensation that is Jeopardy and Wheel of Fortune.)

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  3. An interested observer says:

    Why is age discrimination ok if it favors the favored older generation? They would be the first to complain if they were charged more?

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  4. BarrettJ says:

    I always that it was “okay” to discriminate against the elderly because:

    1) The elderly are generally using the service at a time where it’s not as fully utilized (during the day when younger people are at work/school coupled with the fact that older people tend to eat earlier in the day)

    2) I think it’d be more rare for an elderly person to cause a “disturbance”, steal something expensive (i.e. more expensive than a dinner roll or some splenda), vandalize anything (in effect, lowering costs)

    3) Their income can frequently be more limited than those of younger people (they’re living off of a set amount of money that they saved up) and it’s to encourage them to spend it more freely (a customer who you make $0.01 off of is better than no customer).

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  5. Richard, Uk says:

    An interested observer, whilst it is age discrimination technically it should actually be thought of as discriminating by income group, ie. pensioners. The obvious rationale being that pensioners commonly have lower incomes than that of a non-pensioner. By lowering the price, you hope to keep the level of costumers at a higher level, whilst still allowing a higher price to be charged to other groups in order to cover costs/maximise profits.

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  6. Herman says:

    A far more economically efficient pricing model would deliver the day discount to everyone regardless of age.

    This would help alleviate the crowding during the prime evening and weekend time slots.

    Over time, people would adjust their usage to either favor their pocketbook or their watch.

    Call it spa congestion pricing.

    And I agree, subsidizing the elderly is blatant discrimination.

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  7. karapdx says:

    I don’t think it’s age discrimination if you give a benefit to someone because they’re older, but I do think it is if you deny someone a benefit because they’re older. My logic is this, and feel free to disagree: everyone gets older. I am getting older right now. …and right now. So eventually, if people are patient, they can benefit from being older. But, no one can go back, so saying, “you’re too old for such-and-such” is not fair, and is age discrimination.

    As for the differences in discounts, I like to think of discounts like desserts. It’s nice if they come to you, but you shouldn’t throw a tantrum if they don’t.

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  8. Barry says:

    Actually, spa time is a wasting asset, like an airline seat. Better to sell it for something than fly empty. As a class old people have less money, but more free time, so in marketing to them the price needs to be lower.

    Whatever feeds the bottom line.

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