Is The Ritz-Carlton Grand Cayman Running A Currency Conversion Scam?

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.

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).

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!

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.

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?

Can you pay cash in KYD?

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.

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.

You are missing the point: How many Sir Turtle Miles did your reader earn for this trip?

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.

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.

No, it’s not DCC. A different issue.

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.

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.

"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).

Great response!

Thanks for the clarification, makes more sense things are the way they are...

So it’s a widespread normalized scam. Got it.

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.

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.

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.

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

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.

Not DCC as Volan said.

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.

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."

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.

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.

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.

It’s also a crap hotel with a poorly maintained section of beach. Seafire is nicer.

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.

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.

This happened to me at Nobu Cabo, went to check out and they made me pay the final bill in USD and not Pesos. I have also stayed at the WA Pedregal (Cabo) and One&Only Palmilla and eaten off property at The Cape, Esperanza, and Las Ventanas and didn't have any problems at any of those properties paying my bills in pesos being charged to my credit card and it was pegged to the bank rate, so it was great the rest of the time.

But for the amount of business I had given Nobu, it really was awful, I was so mad, the wife had to drag me away from the manager as I asked him when did this policy change, as I had stayed at the property previously and told him that they let me pay in pesos before!! He, of course said it was always the case and I showed him my bill from my previous stay and he just shrugged, saying it is company policy, I basically told him to F*** Off in front of the entire staff and everyone checking in. I hate people like this that have no real power in their day to day lives and then become a super clerk at their job. Like those resorts don't make enough money from us already, with how little they pay their staff and the owners just pocket all of those tips and gratuities, almost makes me want to open my own hotel down there and take away all of their business and show them how to treat people fairly.

We stayed at the Kimpton Seafire up the street a few years ago. The practice there was the same. When I insisted on paying in local currency, they explained that the machine recognizes credit cards from the US and automatically charges in USD and would not allow us to charge in the local currency (KYD)

This happened to me at Nobu Cabo, went to check out and they made me pay the final bill in USD and not Pesos. I have also stayed at the WA Pedregal (Cabo) and One&Only Palmilla and eaten off property at The Cape, Esperanza, and Las Ventanas and didn't have any problems at any of those properties paying my bills in pesos being charged to my credit card and then it was pegged to the bank rate, so it was great the rest of the time.

But for the amount of business I had given Nobu, it really was awful, I was so mad, the wife had to literally drag me away from the manager as I asked him when did this policy change, as I had stayed at the property previously and told him that I had paid in pesos before!! He, of course said it was always the case and I showed him my bill from my previous stay and he just shrugged, saying it is company policy, I basically told him to f*** off in front of the entire staff and everyone checking in.

I literally hate people like this that have no real power in their day to day lives and then become a super clerk at their job. As if those resort owners don't make enough money from us already, with how little they pay their staff and then they just pocket almost all of those tips and gratuities,

Kimpton Seafire Grand Cayman is doing the same exact thing

The challenge is KYC has almost no liquidity, no large futures market, which make it difficult to conduct business in KYC vs USD. They also pay most of their foreign staff in USD, who then send the dollars back home, which is far more useful to them than KYC to send home. All of this conversion is expensive, and thus is essentially a standard across the island. You'll see anywhere from 1.2-1.3 with prices in KYC at restaurants, bars, boats, hotels, etc.

Less of a hotel scam, and more of the challenges of a rich island with a small population, that's also a natural USD tax haven.

As others said, comparing KYD to HKD is not a good comparison because KYD is pegged and is not a fully traded currency.

I want to comment about something slightly different but related. Marriott quotes the rooms in USD even if your default in the settings is "local currency" and the rooms are billed in USD, so I would think that this includes the game that is played. I wonder if you could even get a room priced in local currency. This is also not uncommon as I have stayed in other countries where hotels will price and accept the payment in USD, as well. There is a difference between being quotted and billed in USD and the DCC issue.

Hotels in Indonesia and Thailand are legally obliged to bill in their respective local currencies. If properties in other places are going to rip customers off, then governments need to step up and change the law. In the interim, shining the light of publicity on greedy hotel operators who run grubby, underhanded currency rackets by posting bad reviews does seem like a good course of action.

"Marriott Property Scams Guests Horribly, Leaving Them Without Recourse Because... Marriott" might be a shorter version.

That’s incredibly disappointing from a brand like Ritz-Carlton. Listing prices in KYD but forcing USD payment at a marked-up rate feels like a quiet scam. Guests deserve transparency, especially at luxury resorts.

The Cayman Islands Dollar (KYD) isn’t an internationally traded currency, so you won’t find it outside the country or supported by most foreign cards. As a result, USD is widely used for everything—from tourism and real estate to card payments, which are often routed through USD to avoid issues. While I can’t speak for the Ritz-Carlton specifically, using cash in local currency can help you avoid poor exchange rates. If you have a card with fee-free international ATM withdrawals, it's best to get KYD locally after you arrive.

The Cayman Islands Dollar (KYD) isn’t available outside the country and isn’t supported by most international
cards, so USD is widely used for everything from hotels to real estate. Many businesses route card payments through USD to avoid issues. While I can’t speak for the Ritz-Carlton specifically, using local cash can help you avoid unfavorable exchange rates—just withdraw KYD from an ATM once you arrive if your card allows fee-free international withdrawals.

I had dealt with this exact issue when staying at the Kimpton in 2024. The FX rate being used is the street rate of $1 to USD1.25. You can ask them to process your card in KYD to get the KYD rate but it will automatically be rejected by the credit card processing machine. I tried it a few times and different places. Yes, the hotels and such could honor the official FX rate, but they don’t. At the end it’s the credit card processors that are doing this and the businesses are in alignment.

I racked up charges in USD onto my room, and at the end they handed over a credit card machine with the USD owed. I had to specifically ask for pesos. This was November 2024.

After living in the cayman islands for 9 years, Wherever you go and you are tourists or you employed on island, the exchange rate at the local bank is 1kyd = 1.22uds vs outside the bank anywhere you go and spend in USD the exchange rate outside the local bank is 1kyd = 1.25uds. Some people need to inform them self, before making any comments. You are not home, you are outside your country, don't expect to have the same law as home.

What’s happening at the Ritz-Carlton Grand Cayman isn’t just about currency conversion—it’s a case study in how luxury brands monetize trust. When a hotel quotes prices in KYD but denies tourists the ability to pay in that currency, it’s not about logistics or policy—it’s about control of perception. Most guests see prices in local currency and subconsciously assume they’re paying local rates. But by enforcing a USD-only policy at a padded 1.25 rate, the hotel quietly turns that assumption into a profit center.

This is part of a broader trend in travel: opaque pricing that targets guests’ inattention, not their choices. Think resort fees, automatic service charges, and now, currency arbitrage disguised as policy. It’s not illegal—but it erodes the contract of fairness we assume when we book with trusted brands.

The deeper issue is this: if luxury travel is built on transparency, experience, and trust, what happens when the margins start hiding in the fine print? Guests aren’t just overpaying—they’re being conditioned to expect less clarity and more friction in exchange for “service.” We should all ask—at what point does premium become predatory?

Our conversion rate in Cayman has always been 80c CI to $1. USD. $20US is $16CI and has been as long as I can remember. I am old but I can still remember the 70s.

There are bank rates, that business use directly with them and that ranges from 82c to 84c depending on instrument used.

However on island, in the stores the official rate is $1US is 80c KYD.

The 1.25 rate isn't padded. That's the rate it's been since i got my first job in high school working at one of the first hotels on Grand Cayman. $1KYD to $1.25 USD, or .80¢ CI to $1 US is and always has been the official exchange rate

What the RITZ is doing is a slight of hand. A burger costs $20, that looks better than $25 on the menu. But it's price is $20 CI or $25 US, if you pay via credit card, you have to pay US$, the processor can't do it in CI$, if this whiny commentator in the article had actually paid in cash, he could have certainly paid $20CI,

This exchange rate is why we created a $40 bill was created, to exchange a $50 US bill. That being said there are different transaction rates B2B, which growing up was great as I was given US tips and my mum's business converted them at their rate to .82¢ instead of . 80¢.

EXACTLY!

The KYD is woth zip off of the island and the rate of USD1.25=1KYD is such a wipeoff!!! I have tried when thre to get KYD and use vs CC and the upcharges... Cabo is just as bad!!!!

so in the US they should just start charging foreigners more since they aren't in their home, heck we should charge out of state people more just because. F it!

This very well seems illegal or against Visa and Mastercard rules. It is definitely against Amex rules which do not allow auto DCC

So, is the KYD legal tender in the Cayman Islands or isn't it?

We stayed at the Westin this past February and ran into the same issue, only we found it to be very wide spread. I was at the Sunset Divers bar (very cool place) and asked that I be charged in KYD. The bartender said it won't work with a US credit card. He proceeded to run the card and showed me the error message. I don't know where it is programmed, but the workers have no control over it. I also had it happen at a dive shop. Only USD accepted for the credit card and always a 1:1.25 rate.

Yes, KYD is the legal tender of the country. USD is accepted; however KYD is always returned as change if paid via cash. The conversion of 1:1.25 is widely used across the country, regardless of the bank's rate (which changes daily and would be impossible to keep track of on a regular basis). If paying by USD credit card, the transaction will go through in USD; this also applies to locals who pay in USD so is not a ploy on the hotels to swindle money off of tourists.

In future, it might be useful to research this information before traveling to a foreign country. Many Americans are gob smacked to learn that the Cayman Islands dollar (KYD) is stronger than the American dollar, especially when prices are converted to USD.

Further, it is standard across ALL service providers to add a 15-20% gratuity to bills. This serves as a tip to the service worker and, in many cases, is shared among all service staff of the establishment (i.e. bussers, bartenders, waiters, etc). Any additional tip on top of this is at your discretion but not necessary.

This is the norm almost everywhere in Cayman.

If you pay with USD you pay a conversion “tax” to the retailer and they pocket the difference.

If you want to pay in KYD you need a local bank card or CI$ cash and you’ll pay a fee to withdraw it from an ATM anyway.

Source: I live on the island, and I used to be a tourist so I’ve been on both sides of the fence.