christep

Having just been, yet again, stung by a Manila hotel using a ridiculous exchange rate to convert the quoted rate in USD to the charge on my credit card in PHP I think it would be useful to do a comparison of the extent of this ripoff in the various Manila hotels. The best way to do this is probably to publish the rate charged by the hotel compared with the rate obtained from an ATM on the same trip.

I'll start with the Renaissance Makati today:

ATM rate (even including the ATM fixed fee): 1USD = 50.50PHP
Renaissance hotel checkout rate: 1 USD = 56.00PHP
Ripoff factor = 5.5/50.5 = 10.9%

GibSpmuh

It's not just in Manila it happens, in Indonesia I've found there can be quite a wide array of values used in the conversion from US$/Rupiah. Is there any reason that the hotels can't actually bill in US$?

When I've bought air tickets in Indonesia for instance, I've been quoted in US$ and charged in US$ as well. Or is it that hotels just don't want to because it's an additional source of profit for them?

MegatopLover

For the hotels at least, it's a Bank of Indonesia foreign-exchange regulation. The central bank basically requires that transactions be processed in rupiah (even if notionally priced in dollars). I'm no expert on currency regulations, but I can think of at least two reasons for this: protection of the home currency as the currency of principal use within the country (i.e., a safeguard against the whole economy gradually converting to dollar transactions), and making it easier to keep earned foreign exchange within the country (i.e., dollars might be easier to move offshore).

The hotels might be happy with the extra source of profit, but I think they'd probably be happier to have their income come in in dollars since they're debt and other obligations is probably dollar-denominated in large measure.

I don't know why your air tickets were processed in dollars as well. Perhaps the point of sale of the processing was offshore.

I've been lucky with hotels in Indonesia and Thailand processing the conversion fairly close to the bank rate. I bought some art from a gallery in Ubud, Bali, recently with the price negotiated in dollars. The dealer converted it to rupiah for the processing on my credit card. She used an exchange rate that was below the published bank rate (I'd checked it that morning), so I started arguing with her. Eventually she managed to explain that using a rate that was "too low" benefitted ME when going from dollars to rupiah. Doh! The one percent I made from her generosity covered some of the hit I took from Chase Manhattan when the charge went through my Visa card.

christep

My experience in Indonesia has also been good in this respect, Even to the extent of getting cash exchanged at the hotel (which is normally a rip-off place to do it) at close to interbank rates. It does seem to be The Philippines where this ripoff is a particular problem.