Don't Trust Hotel Currency Conversion

Experienced travelers will already know this, but it bears repeating: Don’t trust your hotel to perform currency conversions for credit card transactions. They will rip you off. Leave it to the credit card company.

A few months ago I stayed at a Sheraton hotel in Australia. They swiped my credit card when I checked in, and on check out they asked if I wished to pay with that same card. I did, so I didn’t need to swipe my card again. They sent me an invoice for approximately $265 AUD.

A few weeks later I was processing my expenses, and I realised I’d been charged over $300 NZD. With the exchange rate at the time, it should have been about $275. Looking closer, I realised that they had charged me in New Zealand dollars. They should have charged me in Australian dollars, and let my credit card company sort out the exchange rate.

What’s going on?

Some hotels offer you a choice of currency when paying your bill. This should be an option when you enter your PIN. Do not take this option. It is almost never a good idea. Your credit card company will charge you a fee for currency conversion (1.85% for my New Zealand credit cards, 3% for my US credit cards). But here, the hotel applied a much higher fee, making it cost about 10% more than it should have.

What’s worse is that they didn’t even give me the option, and it was not reflected on my invoice - which means I can’t claim those costs as business expenses, and I’m out of pocket. I was furious when I realised what they’d done. I rung them up, and they agreed to refund me the NZD amount, and charge me in Australian dollars, so that I would pay normal currency conversion charges.

Other hotels are more upfront about it: when I stayed at the Hilton in Sydney, they offered to charge me in New Zealand dollars, but they clearly spelled out the conversion charges. These were more than my credit card charges, and so there was no reason to use their service, but at least they were clear about the costs.

Moral of the story: Don’t get tricked into paying extra for services you don’t need.