Whine Wednesdays: Hotels Using “Fake” Exchange Rate To Convert Room Rates To Local Currency

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As some LoyaltyLobby readers may have noticed, I have been in the Latin America for the past few weeks and will stay here for another month or so.

Whine Wednesdays Hotels Scamming On Exchange Rate

Many of the hotels display their room rates in dollars on their respective websites (Hilton, Hyatt, SPG, Marriott etc.), but the actual room charge is converted using a “market” rate from the USD to the local currency.

Here’s where the problems start. Hotels seem to want to double dip by displaying the price in USD that is often less inflationary than the local currency and then using an unfavourable exchange rate to convert the displayed USD price to local one. Based on my current tour, the rate is usually off by 3% to 5%.

Note that I am not here referring to exchange rates that hotels offer to convert foreign currency to a local one. Those rates are always terrible and you should never ever exchange cash at the hotels.

Here’s what you need to do if you prefer not to be scammed by the hotel:

1. Don’t accept the hotels explanation that they are using a hotel exchange rate set by their “finance” department.

2. Open the hotel chain’s website, they all provide currency calculators and then request the hotel to charge the rate shown on their own website.

3. Some hotels may be able to use their POS to charge in USD and this could be one option but not in all countries.

4. Don’t be afraid to escalate the issue to the Manager on Duty.

I know that some will criticize me that I should not care about 3% to 5% overcharge by hotels. I disagree. If the hotels want to fatten their bottom line, they are free to raise their room rates. Scamming their guests by using fictional exchange rates is not the way to go.

What if the hotel refuses to use the correct exchange rate?

1. Open a case with the chain’s customer service regarding the overcharge

and

2. Leave a review on TripAdvisor with less than stellar stars and cite the fake exchange rate used as a reason.

Conclusion

The photo above is from my folio at the Palacio del Inka, Starwood’s Luxury Collection hotel in Cusco, that tried to get away with using an exchange rate that was off by 3.3%. They did adjust the rate to the correct one after a discussion with the front office manager.

There is no rhyme or reason to this “scam”. Some hotels are using rates that are to the penny with the real market rates while less than honest ones are trying to charge rates that are off by as much as 10%.

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