An OMAAT reader recently stayed at the Ritz-Carlton Grand Cayman, and asked for my take on a little profit side hustle that the hotel seems to be running…
In this post:
Currency trickery at theRitz-Carlton Grand Cayman
It would appear that on-property (like for food & beverage outlets), the Ritz-Carlton Grand Cayman lists all prices in the local currency (KYD), but only accepts payment in USD, using the hotel’s own conversion rate, which is significantly higher than the market rate.
For what it’s worth, the hotel uses the exchange rate of 1 KYD to 1.25 USD. Over the past several years, the official exchange rate has ranged from 1 KYD to 1.15-1.20 USD, so the hotel is getting a 4-8% spread on purchases. On top of that, the hotel has a mandatory 20% gratuity for food outlets, and that 20% is being calculated based on the higher exchange rate, meaning in the end, you’re paying 5-10% more than you should.
As the reader explains:
On our visit for lunch we were surprised when the hotel refused to accept payment for the meal in KYD, despite the menu listing all prices in KYD. For reference, this is very much not the norm in the Cayman Islands – almost everywhere will give you a choice to pay in USD or KYD, but nowhere we found refused payment in the local currency.
The hotel admittedly does disclose this on menus in small print, but to me it just leaves a bad taste in guests’ mouth. Listing prices in the (lower) KYD, to then only accept USD, just seems a little deceptive. What’s worse is it seems this policy isn’t disclosed anywhere on the hotel’s website, yet it could add a significant amount to the cost of a guest’s vacation over the course of several days.
Our server informed us that they only accept KYD payment from residents with Cayman-issued credit cards, so it certainly seems that the hotel has the ability to collect card payments in KYD, so it feels like a bit of a scam to insist on USD payments rather than letting guests pay with no-fee credit cards in local currency.
For what it’s worth, this doesn’t seem to be a new practice. For example, here’s a TripAdvisor review from late 2022:
But leave it to the Cayman Islands Ritz to squeeze an extra 5% of their guests. Normally, the conversion rate is $1.20 USD to $1 KYD. But the Ritz forces you to convert to their unfavorable rate of $1.25 USD to $1 KYD, it may sound minor, but your mandatory 20% tip is based off of the unfavorable conversion, and you end up spending an extra $50 per $1,000 for the currency conversion.
I brought it to the bartender’s attention early in the trip and he said — and I quote — “You are American, so we are charging you USD.” Wait a second… how does he know I’m American? He replied “you look American, you sound American.” So this smug Bartender profiled me because of how I look and how I sound and decided “it’s ok to charge him the extra 5%?”
How unethically is the hotel acting with this policy?
Unfortunately the concept of hotels trying to profit off of currency conversion on a widespread basis happens way more than it should. For example, it’s not uncommon to see hotels try to push you toward paying in your currency, since there’s a small margin there for them.
That being said, what the Ritz-Carlton Grand Cayman is doing strikes me as being especially bad. I’m not an expert on banking regulations in the Cayman Islands (or the lack of them) ;), but it seems a little ridiculous to post prices in local currency, but to refuse to accept payment in local currency from some guests.
What makes this worse than what I’ve seen at other hotels is that it seems the hotel accepts payment in the local currency from some guests visiting food & beverage outlets (including locals), but doesn’t accept payment from other guests. Like, what’s the basis of refusing to accept payment in the local currency?
If I were a guest, this would also rub me the wrong way — “hey, here are our prices, but they’re not actually what you’re going to pay.” Just raise the prices by 5-10%, be honest, and call it a day!
To me this is such a frustrating aspect of the hotel industry. You pay insanely high room rates, then you pay a steep nightly resort fee, then you pay the high prices for food and drinks, and on top of that, they’re still padding the pricing even more with this trick.
Bottom line
The Ritz-Carlton Grand Cayman seems to have a sneaky practice when it comes to its on-property spending, whereby the hotel displays prices in the local currency, but then only lets many guests pay in USD. Not surprisingly, the hotel is using an inflated currency exchange rate.
While hotels trying to profit off of exchange rates is nothing new, I think this is especially bad, given that costs are posted in one currency, and then the hotel only accepts payment in another currency, using an unfair exchange rate.
What do you make of this Ritz-Carlton Grand Cayman practice?
This sounds like the sort of thing one might expect in Cuba or the former Soviet Union where hotels sought to get hard currency from Western tourists -- not in the Cayman Islands.
People just need to leave bad reviews for these practices. It’s the only thing hotels really care about. Don’t put up with their pleas or comp offers. Just publish the truth.
It’s also a crap hotel with a poorly maintained section of beach. Seafire is nicer.
I think it is extremely clever to write a story about the menu and food prices at this hotel using the phrase "bad taste in guests’ mouth."
Waldorf Astoria Los Cabos does this to unsuspecting Americans as well, but will charge in local currency if you ask. Quite a common practice in Cabo.
The difference between their conversion rate & Amex was $110 on a $1000 tab.
They display prices in USD at Waldorf so how can they do this? At checkout they give ability to pay in pesos or USD, and all 4 times I’ve been the conversion rate has been the bank rate. I think you’re wrong here, or they’ve changed their practices since this January.
This happened at 5 star hotels in India such as ITC Sonar Bangla in Kolkata, being told that it's a mandatory hotel policy to use DCC on cardholders home currency for all credit card transactions. I think it's a hidden way to add a credit card "surcharge" such as the 3% credit card fees becoming so prevalent in the states.
Good way to get around it is paying cash where betterment bank atm card...
This happened at 5 star hotels in India such as ITC Sonar Bangla in Kolkata, being told that it's a mandatory hotel policy to use DCC on cardholders home currency for all credit card transactions. I think it's a hidden way to add a credit card "surcharge" such as the 3% credit card fees becoming so prevalent in the states.
Good way to get around it is paying cash where betterment bank atm card charges zero foreign charges and atm fees whatsoever, unfortunately giving up any credit card rewards to be gained
Ben, same thing for the Marriott in Reforms in Mexico City. It was criminal the difference on exchange rate. I called them out on it how that was illegal. That I should be charged the actual amount in pesos. They refused to do so.
I have no issue with locals and foreigners paying different prices. It is a practice I have encountered in many parts of the world that allows locals to participate in tourism. What is the issue here is the lack of transparency and what seems a case of nickel and diming guests. What I found hilarious is that the menu notes that a 20% gratuity is added for the guest’s “CONVENIENCE.” What phony Bs. If the...
I have no issue with locals and foreigners paying different prices. It is a practice I have encountered in many parts of the world that allows locals to participate in tourism. What is the issue here is the lack of transparency and what seems a case of nickel and diming guests. What I found hilarious is that the menu notes that a 20% gratuity is added for the guest’s “CONVENIENCE.” What phony Bs. If the property really wanted to ensure a guest’s convenience they would list the prices in both local currency and USD, a practice I have encountered at numerous properties that truly do care about guest convenience.
So the Cayman Islands dollar is pegged to the U.S. dollar, yet you can’t charge it directly? Meanwhile, the Hong Kong dollar is also pegged—yet it’s fully functional, easily billed, and seamlessly converted for end users.
Unlike the Hong Kong dollar, the Cayman Islands dollar isn’t traded internationally. While I understand the confusion and see where both sides are coming from, comparing HKD and KYD isn’t really an apples-to-apples comparison—it overlooks the fundamental differences in how these currencies operate on the global stage.
@Jimbo
You are correct if you're an economist studying currency fundamentals or trying to trade currencies.
You're incorrect if you're an individual making a credit card transaction.
"The 1.25 rate is also normal across island for KYD-USD. Although official rate is pegged at 1.2 - you will never get the official rate - even local banks charge locals at 1.22." Yeah, but Mastercard website posts a 1.2000005 rate before bank fees. Since I have a MC that charges no FC fees, I'd pay 4% less if they'd charge me in KYD (not that I'm headed to such a place).
In the U.S. banks typically charge a 5% premium to retail customers for buying or selling foreign currency. The grand cayman dollar has less liquidity and would either be unavailable or command a higher premium. It is standard for hotels to charge higher exchange rates. So this guest overpaid a few bucks while staying at a ritz Carlton resort using credit card points. How unfortunate and I’m sure they look forward to seeing them again in the future.
This is the same everywhere in Cayman - local debit cards go through as KYD, credit cards (local credit cards are only available as USD) and foreign debit cards are forced to USD. You can always pay in cash in CI dollars and get the KYD rate.
The 1.25 rate is also normal across island for KYD-USD. Although official rate is pegged at 1.2 - you will never get the official rate - even local banks charge locals at 1.22.
This is definitely the hotel taking advantage. And yes, it can add up especially after 2 grand spent being an extra $100. I put this in a similar boat as resort fees.
The process is called Dynamic Currency Conversion. Credit card holders must be asked for their approval before it can be done. You should always decline it. It should not be done automatically. Cardholders can dispute the charges if they so desire.
No, it’s not DCC. A different issue.
Not DCC as Volan said.
You are missing the point: How many Sir Turtle Miles did your reader earn for this trip?
Thanks for the heads up. I was considering a trip to the island but now will make sure to avoid the ritz grand cayman. No way I’m going to support a business like this… absolutely absurd and I hope knowledge of these unethical practice spreads to punish the resort.
Sadly this isn't just the Ritz, it's pretty much everywhere. The Ritz takes it another step by refusing KYD cash.
There are far many nicer places to visit than Cayman, do yourself a favor and skip it. I sent on business, paid in full by the customer who was based there, so at least I didn't pay for my education.
Ran into this at the Kimpton Seafire as well in 2023!
As always I requested to be billed in the local currency, but they noted that their payment processing system only does USD for foreign cards. So when the ratio was 1:1.25, I asked why it wasn't 1:1.2 and they noted it was the resort rate.
I ran into this across the island where I dont think I was ever able to pay in Cayman...
Ran into this at the Kimpton Seafire as well in 2023!
As always I requested to be billed in the local currency, but they noted that their payment processing system only does USD for foreign cards. So when the ratio was 1:1.25, I asked why it wasn't 1:1.2 and they noted it was the resort rate.
I ran into this across the island where I dont think I was ever able to pay in Cayman dollar on my chase or amex cards.
It definitely seemed sketchy but ultimately the standard practice that you need to have a Cayman issued credit card to pay in Cayman dollars.
Would be interested to see others take on this as well!
This issue has come up before at properties belonging to each of the major networks. And, guests have complained to corporate. And, corporate has said that the issue is not theirs to become involved. (Remember that Marriott's customer is the property owner.)
Even for the room rate and incidentals, properties can price in the local currency and then mandate payment in the guest's home currency (using its own exchange rate).
I’ve lived in Grand Cayman for 12 years and work in the tourism industry. The whole KYD vs. USD situation can seem unusual, but the Ritz-Carlton isn’t alone in how it handles it. The Cayman Islands Dollar (KYD) is pegged to the US Dollar, with the official bank rate typically around 1 KYD = 1.22 USD. However, the standard "street rate" used by most businesses is 1 KYD = 1.25 USD.
While this might seem...
I’ve lived in Grand Cayman for 12 years and work in the tourism industry. The whole KYD vs. USD situation can seem unusual, but the Ritz-Carlton isn’t alone in how it handles it. The Cayman Islands Dollar (KYD) is pegged to the US Dollar, with the official bank rate typically around 1 KYD = 1.22 USD. However, the standard "street rate" used by most businesses is 1 KYD = 1.25 USD.
While this might seem unfair, it's a common practice across the islands. It helps cover the inconvenience and fees merchants face when handling USD cash or credit card transactions. At my workplace, our card machines automatically default to USD for any foreign card—and even for Cayman-based credit cards. Only locally issued KYD debit cards are charged in KYD.
Seems like a currency/banking scam. What makes Cayman currency different than say the Euro? When you goto Europe you can pay on your credit card in euros.
Why is the default on most payment systems in Cayman unable to charge in Cayman dollar on foreign cards?
Good question. The Cayman Islands Dollar (KYD) is not an internationally traded currency, which means you won’t find it listed on global forex markets or available for exchange outside of the country. As a result, most international transactions in the Cayman Islands are conducted in US Dollars (USD), which is widely accepted and used for everything from tourism to real estate.
In fact, it's common for major purchases—such as property sales—to be priced and settled...
Good question. The Cayman Islands Dollar (KYD) is not an internationally traded currency, which means you won’t find it listed on global forex markets or available for exchange outside of the country. As a result, most international transactions in the Cayman Islands are conducted in US Dollars (USD), which is widely accepted and used for everything from tourism to real estate.
In fact, it's common for major purchases—such as property sales—to be priced and settled in USD. Similarly, many hotels, tour operators, and even government fees will default to USD, particularly when dealing with foreign visitors or offshore clients.
Because KYD isn't supported by most international card networks, many foreign-issued credit and debit cards simply can't process KYD-denominated transactions. To avoid declined payments and foreign exchange issues, most businesses route card payments through USD, even for local purchases.
For comparison, this is quite different from a currency like the Euro, which is widely recognized and processed across the globe.
Great response!
Thanks for the clarification, makes more sense things are the way they are...
Can you pay cash in KYD?
I can’t speak for the Ritz-Carlton specifically, but paying in cash with local currency is often the best way to avoid any unfavorable conversion rates. If you have a card that allows fee-free ATM withdrawals abroad, that’s a good option once you arrive.
Just keep in mind that KYD isn’t available outside the Cayman Islands—it’s not an internationally traded currency—so bringing it with you in advance isn’t really possible. You’ll need to withdraw it locally...
I can’t speak for the Ritz-Carlton specifically, but paying in cash with local currency is often the best way to avoid any unfavorable conversion rates. If you have a card that allows fee-free ATM withdrawals abroad, that’s a good option once you arrive.
Just keep in mind that KYD isn’t available outside the Cayman Islands—it’s not an internationally traded currency—so bringing it with you in advance isn’t really possible. You’ll need to withdraw it locally once you're here.
Yes you can
Please explain Mark?
Mark is answering Nick's question about paying with actual cash. Thus, if a person's bank prices foreign ATM withdrawals near spot and covers ATM fees, then the person might go this route.
So it’s a widespread normalized scam. Got it.
I can understand that viewpoint but I fear you have missed the meat of the discussion which is that as KYD is not traded internationally, all payments made with overseas cards need to be done in USD.