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…
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?
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