Two New Yorkers spend six months 18 months!?! in Bangalore and other places in India.

Friday, August 03, 2007

USD for Me, INR for You

It's normal for most medium- and high-end hotels in India to charge foreigners extra. The usual way they do this is to quote foreigner prices in US dollars, with the Indian price, obviously, in rupees. The trick, if you want to call it that, is that the USD price is almost always higher than the rupee price. I'm a little hazy on how exactly this system arose, but it's clearly a way to get a bigger bite from the foreigner wallet. When it comes time to pay up, the foreigners are actually charged in rupees, so they end up paying more AND still usually having to pay for some sort of currency conversion. The "foreigner tax" generally amounts to paying 10-15% more*.

So, for instance, the Taj luxury hotels chain asks for 13000 rupees for a sea view "luxury" room in Goa when the person staying there is Indian. But for a foreigner, that price is 13,935 INR ($345). That's 935 rupees ($23) extra for not being from these parts. (Of course, the dollar buys fewer rupees than it did last year at this time--the foreigner premium was higher then*.)

I've gotten used to the system (it helps that I rarely stay in places fancy enough for there to be much of a difference, if any, in the prices). But I was a little taken aback to discover a resort that wants foreigners to pay 2800 inr (almost $70, or 33%) extra for a cottage suite. And that's the outdated tariff -- the one the hotel emailed me has the Indian rate at a 1000 rupees less and the dollar rate staying the same. All I can hope is that foreigners get perhaps some sort of keepsake for all that extra cash. Or maybe they could promise to be 2800 rupees' less messy? (Seriously, if I were even thinking of staying here I'd yell and scream to try to get the rate down. Way down.)

But there's a little hope that this may not always be the way things are: The Taj and Oberoi groups, among others, might be getting rid of this system, and Hyatt already has. This is a good thing, I think, and probably a sign of the hotels' increasing confidence. After all, the Taj owns hotels in the U.S. now -- I doubt there are two tariffs listed at the one in Boston.

* Interestingly, at the moment the Oberoi in Bangalore is asking foreigners to pony up "just" the equivalent of 27,265 rupees ($675) for its executive suite, and that's basically the same as the Indian price of 27500. Last year, $675 was closer to 30,375 rupees. Foreigners are getting a (very tiny) deal for now, but we can expect the prices to be re-adjusted when the current rates expire at the end of the month.

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