Saturday, November 10, 2007

Vacation - Continued (Final) - Visit With Zo

First, Congratulations and shout out to Zo and Beth on the birth of Jake Lorenzo. Reports are that Jake and Beth are both doing well and that Mike is a little excited, although it would probably be difficult to detect. After finishing our tour of the Hearst Castle, Rachel and I set off towards San Diego. The difficulty in this journey is that there is no good way around Los Angeles. However, we lucked out and made it through LA in about an hour and a half. The highlight of our trip was dinner on our final night with Mike Lorenzo, the proud father mentioned above, and his wife Beth. This was the first time that Rachel and I had the opportunity to meet Beth. She is very nice and has no difficulty keeping Mike in his place. We ate at a great sushi restaurant and then went for ice cream at the beach. For those of you who know Rachel and I very well, you know that we are big zoo-goers. We could not pass up the opportunity to visit the San Diego Zoo while we were in town, so on Wednesday, we visited the U.S.'s most famous zoo. It was really cool, as the habitats were extremely well designed. As you probably know, the pandas are probably the most famous animals at this zoo. We can now say that we have seen them. They really didn't do much. Very lethargic animals. I affectionately named the one in this picture "Larry Wray". I welcome blog-readers to hypothesize why.

My favorite exhibits are always the apes (note that this includes lowland gorillas, orangutans and chimpanzees). I have included a video clip (I used Quicktime) of the baby orangutan playing with his father at the San Diego Zoo. Several families with small children abruptly left this exhibit, as two in the clan decided to get intimate. Rachel would allow no video footage of this spectacle.

My favorite of the apes is always the Eastern Lowland Gorillas, or "Silverbacks". They are large and in charge. The alpha-male pictured here was no different. This day was especially good for me, as they actually ran at one point. I had never seen one of them run. I gained a whole new level of respect for them, as they are not only huge, but really fast, much like Tim Tebow (I am watching him shred USC as I write this).

REFLECTION - Airline Price Discrimination
I learned in MBA school that an excellent way to make money is to segment your customers and then price discriminate amongst those segments, charging different prices to memebers of each segment. The airline industry has mastered this technique (I assure you that it is a valid tool and that airline earnings would be even worse without it).

Why do I write this, you ask. I can now say that I was a target of this price discrimination. I conducted a clinical experiment by buying 2 airline tickets from the same airline to different destinations from the same origination with both purchases made exactly 2 weeks in advance of the flight.

Flight #1: I fly from Philadelphia to Phoenix, AZ. I lay-over for the weekend in Phoenix and then fly to Orange County, CA on Sunday afternoon. I then fly back to Philadelphia on a red-eye flight Tuesday evening, arriving in Philadelphia on Wednesday morning. This flight logs over 5,000 miles and costs approximately $400.

Flight #2: I fly from Philadelphia to Knoxville, TN. I lay over for the weekend and then fly back to Philadelphia on Sunday afternoon. This flight logs 1,200 miles and costs about $200 more than Flight #1.

How can this be, you (and I) ask?

1) Knoxville is obviously a more attractive destination than either Phoenix, AZ or Orange County, CA, especially during football season.

2) Phoenix is not nearly as attractive destination as it once was, as most women have heard by now that Jeremy Graves is in fact married and thus is no longer available. The OC has suffered since the cancellation of its critically acclaimed series.

3) Competition - This may be the most plausible reason. Multiple airlines with multiple time slots fly from Philadelphia to both Phoenix and the OC. Prices are driven down further, as Southwest is one of those carriers. You want to fly to Knoxville, you have less options, which means a higher price.

4) Economies of Scale - More people fly to Phoenix and the OC from Philadelphia than to Knoxville. This is likely because they have not heard what a paradise that Knoxville truly is. 300-person flights allow larger planes to be used, achieving economies of scale vs. 50-person flights, which use smaller planes. In competitive markets, prices are driven towards variable cost. Each additional passenger on either flight adds very little variable cost (just the incremental fuel to fly that person's weight and baggage). These total variable costs are more effectively distributed across a larger passenger pool, achieving economies of scale on the larger flights to Phoenix and the OC.

Whatever the reason, it stinks that I have to pay $200 more to go see my parents than to travel coast-to-coast.

Thursday, November 1, 2007

Vacation - Continued (Again) - Hearst Castle

Rachel and I spent Monday evening in San Simeon. It was a neat experience, as San Simeon is sort of a throw-back to the 1960's. It is very small, and has no hotels, only motor lodges. It would seem that its only reason for being is to house tourists, like ourselves, who want to visit the Hearst Castle (if you squint, you can actually see it in the picture above).

Situated high on the hill, Hearst Castle was built by media magnate William Randolph Hearst in the early 1920's. Although the house is not as large as the Vanderbilt's Biltmore mansion, the grounds are amazing. It sits on 7,000 acres of land, all originally owned by the Hearst Family (from the castle, almost every bit of land that you can see was owned by the estate). It was home to Hearst, who owned SEVERAL MAJOR newspapers throughout the United States (he was a Rupert Murdoch on steroids). His home was the playground to Hollywood's elite, such as Carey Grant, Randolph Scott and others. Hearst actually owned a DC-3, which transported guests to and from Hollywood to the estate.

The grounds held 4 guest houses, in addition to the main house, each with multiple bedrooms. Guests could stay as long as they wanted, as long as they behaved. Hearst did not believe in telling guests to go home; however, it would be obvious to you if you wore out your welcome. Hearst did not allow drugs on his property, and only allowed drinking in moderation (if you got drunk, you were kicked out).

The grounds contained an extravagent Roman pool, where guests were allowed to swim and play. Hearst was a man of action, so guests were not allowed to sleep late and were encouraged to be active, while staying at the grounds. They could swim, horse ride, visit the zoo on the grounds, or play tennis on the outdoor tennis court.

Hearst was ahead of his time. The castle was designed by architect Julia Morgan during a time when female architects were not given second notice. Hearst was a champion of Women's Suffrage and did not discriminate based on color or religion, although he himself was a religious man.

Mine and Rachel's favorite place was the indoor swimming pool. It was built with bright blue tile enlayed with real gold and was supposedly designed to be viewed at night. As beautiful as it was in the daylight, I can't imagine how beautiful it must be in the evening.

Anyone who is ever in the area should make the Hearst Castle a must.