You Can’t Use Local Currency To Pay For Hotels In Uzbekistan?!

A few days ago I wrote about the fascinating currency exchange black market in Uzbekistan. Uzbekistan has an unstable currency, and as a result, the official exchange rate is very different than the unofficial exchange rate.

Officially one USD gets you ~4,120 UZS (Uzbekistan Som), while unofficially one gets 7,000+ Som. That means the black market rate gets you ~70% more. Uzbekistan is cheap as could be to begin with, and only gets cheaper if you exchange money unofficially.

This doesn’t require going into some shady exchange shop, or anything, but rather just about anyone who has money will gladly exchange your USD, from a taxi driver to a restaurant.

I didn’t know about this black market exchange rate before going to Uzbekistan, so I didn’t bring much cash. Fortunately Matthew brought quite a bit of cash, so we could exchange some at the better rate.

We thought this would be an opportunity to basically get 40% off our hotel bill, so on our last night (yesterday), Matthew exchanged about 200USD on the black market, which got him a couple of big stacks of bills.

Unfortunately it didn’t work out quite so well at check-out this morning, as we were informed that foreigners aren’t allowed to pay a hotel bill in the local currency. More accurately they can’t pay for the room rate with local currency, while incidentals could be paid with it.

Now of course I get where they’re coming from. I suppose on some level they’re trying to prevent what we tried to do. However, this is the first time I’ve stayed at a hotel that doesn’t let you pay your bill in cash in the local currency, even when it’s priced that way. Instead we had to pay by credit card and were billed in USD.

As much as I always recommend avoiding dynamic currency conversion, at this hotel it wasn’t an option. There’s a first time for everything, I suppose.

Comments

  1. It’s the same in the Maldives. Foreigners have to use USD but locals and work permit holders can pay in the local currency. There’s also a strong black market for USD

  2. That’s not uncommon in countries with controlled currencies. I have also found that in some places with unstable currencies that room rates are only quotes in something like Dollars or Euros.

    Be careful when you to admit publicly that you bought money on the unofficial market. That is strictly illegal in some countries.

  3. Back in ’99 shortly after the breakup of Yugoslavia, I spent a weekend in a Croatian resort town. When I went to pay the hotel bill, they wanted Deutsche Marks rather than Croatian Kuna. Fortunately the ATMs dispensed both. I ended-up buying a lot more souvenirs than I’d intended … to burn through the rest of my Kuna.

  4. so basically it’s double pricing – one for locals and one for visitors. I don’t see why it should matter to the hotel if you pay in som that you got at the unofficial rate or at the official rate. How would they know anyway? Essentially they could take the dollars you paid them and trade it on the black market to get the better rate.

  5. you’re to young to know, but this was standard in every east-block hotel when we still had the “good americans und bad russians cold war” going on…….
    I worked at a hotel in eastberlin.

  6. Few years ago cars with foreign plates were not allowed to pay for fuel in local currency in certain areas of Western Belarus. Only USD or EUR, so there was some extra inflow of foreign currency and they also made black market fuel smuggling less economical for those with Polish plates. Good days!

  7. You should read the comment section on your last post. Someone already warned you this practice there.

  8. Leaving Czechoslovakia in 1988 with a backpack, I had too much black market exchanged money at the train station that I couldn’t turn back into dollars or marks. I ended up buying cartons of cigarettes (I don’t smoke), Russian chocolates (tasted like potatoes), all the beer I could carry and a fountain pen. Sometimes a good deal is the opposite.

  9. @ Rico

    “Russian chocolates (tasted like potatoes)”

    I was drinking water when reading that and burst out laughing. Spraying water everywhere! Very funny! !

  10. Fortunately, this didn’t happen in China when traveling there. The currency exchange from Chinese RMB back to US is not easy.

  11. My childhood memory told me it was like this in the 80s in china as well. We had to obtain some “foreign exchange certificate” to buy a microwave. It was only discounted in 1995, not too long ago ;p

  12. Did that in 1985 East Germany and Czechoslovakia. Bought so much cool stuff – Czech crystal that my family still uses at holiday dinners etc. good times!

  13. I apologize in advance for the longer comment but thought this is important to point out

    I am assuming you used a Visa to pay for this (CSR?), so I will write about this relating to Visa. As a condition of the Merchant accepting Visa they agree to abide by the Visa Operating Regulations, Visa does allow Dynamic Currency Conversion (DCC), however the Merchant (if they use DCC) must allow you to actively make the choice and must always allow you to choose either the local currency and your home currency (although they can also give the option for other currencies but I have never seen this). This merchant forcing you to use DCC and pay in USD is a violation of the Visa Operating Regulations and I recommend that you dispute part of the charge with your bank (hopefully you have something showing what the local currency rate was and getting a refund of the markup fee).

    You can find more info on pages 17 and 18 of this Visa Acceptance Guide for Lodging and Cruise Ship Merchants (http://bit.ly/2w8aENF Visa link). If you would like I am happy to point you to more detailed Visa Operating residuals. (NOTE: I know the guide says it is for everyone but Visa Europe (not sure if Visa classifies Uzbekistan as Europe or Asia) however the DCC requirements are the same worldwide)

  14. I paid for the Radisson Blu in Tashkent with a suitcase full of local currency (literally) in 2013.

  15. “You should read the comment section on your last post. Someone already warned you this practice there.”

    I thought the same thing.
    Why bother to include a comment section if our comments are ignored. Oh well. I guess they’re for our entertainment.

  16. I’m sure many of us are amused as you make these little “discoveries.” You are still so young, and consequentially, naive. And I say that with no malice!

    This is, and has been, a common practice in many countries for decades. The reason is simple. The country has limited foreign exchange reserves, so a significant way to generate foreign exchange is to require foreign tourists to pay in their foreign currency.

    This manifests in countless ways in countless countries, as several responders have already commented.

  17. This has recently been introduced – not more than a few months. Though before June.

    But a question that’s worth asking more is this: just how little research do you exactly do before going to a place you’ve never been to? Everything you’ve posted about Uzbekistan that has you marvelling is easily available information with literally barely a search. I went to Uzbekistan in July and literally none of this was unexpected, so I was able to plan my cash well – and had USD ready for the hotel. I expect your next post to say “omg we got to the airport and found out they won’t exchange soms back to USD at the official rate without a receipt showing we originally exchanged them at the official rate, so I’m stuck with $200 USD worh of soms”.

    I get the point about finding out about places as you come, “open to experiences” if you wish, but there are some very basic things you should check up on before you travel to avoid being needlessly disappointed – and enjoy the country instead. I’d like to point out, for purposes of quality of your content, that nothing in this chain of posts adds any value to our collective knowledge – once again, all of this is available elsewhere – it would be much more valuable if you posted something about the country, the people, the life. Or is life external to the hotels and the lounges out of scope of this discussion?

  18. Many people have said it already: this is common practice in countries with black markets!
    It only works if you can spend the local cash in shops and restaurants and pay tips and taxis.

  19. Longtime reader, first time commenter here.
    Funny story. In Turkey this spring I was surprised that Turkish hotels are listed on Booking.com… but can’t be booked from within Turkey. Weird quirks!

  20. I have a drawer full of “bank-banded” 500 notes from Cambodia just because I wanted a suitcase full. Hence, my screen name.
    Question: What do you declare as the value when you come back to the US if it can’t be exchanged?

  21. BEN! I have a question that i’ve been meaning to ask…

    In our daily email newsletter we get a certain amount of articles, yet more often then not I run into articles on your website that WEREN’T in your email newsletter.

    Why is that? I have major FOMO so I wanna make sure im getting everything you post.

  22. Illegal currency trading. Its wrong. You know it. You did it. Conciously. Be thankfull to god (or whatever) that the price you paid for greed is as simple as that.

  23. Forced acceptance of DCC is a violation of merchant rules at both Visa and MasterCard. I’d suggest simply disputing the charge with you card issuer.

    @Brad B

    Visa consider Uzbekistan to be part of CEMEA and thus subject to Visa inc rules. Though this is largely a moot point since the former Visa Europe association was acquired by Visa Inc last year.

  24. Now who is greedy?

    To refresh your memory, you call out American Airline for being greedy and now you are doing this.

    You cant have it both.

  25. @Adam good to know

    I highly recommend Ben dispute this charge with his card issuer to recoup the ~3% service fee for DCC and their horrible exchange rate.

  26. I just don’t get it This is a practice used in many countries that need foreign currency. If you are not a resident, you pay with the “hard” currency.
    Additionally, there are several countries where a foreigner/tourist pays a higher rate than the locals. That’s just basic! Sometimes it’s irritating, but seems to be justified.
    But please do your research before going to “exotic” countries. You won’t need more than a few minutes to find out about these regulations.

  27. You are surprised? Ben, you really need to get out of the cocoon of the west a bit more often. There are MANY countries where they reject their own currency and insist all transactions be done with hard currency – typically dollars, but I’ve been to some that also accepted euros or pounds. Especially for travel purchases, big ticket items, and especially if you are an obvious foreigner.

  28. “It’s the same in the Maldives.”

    Maybe at resorts but not always on local islands. We paid in ruffiya last year for accommodation on the island of Villingili. Loved that island and the people. And just a short ferry ride from the capital.

    Ben I am old enough to have paid in FEC in China for a bus and a hotel back in the day when they still used those Foreign Exchange Certificates!

  29. to be fare, the old Chinese FEC is different. It basically recognized the gap between official rate vs. black market rate and gave people who exchanged local currency benefit and discount in lots of places. It actually reduced the need of black market exchange for foreign visitors.

  30. I was several times in Tashkent last year – 2016 – and always paid my hotel bill in local currency. I was staying at the Wyndham. You should have tried it a day before leaving with a smaller amount – I always paid in two or three different days to pay lower amounts and to avoid being stuck with a lot of local currency at the end of my stay.

  31. Seems I’m late to comment. Often time controlled currencies like this one are very difficult and very expensive to change back if you brought the currency back to the US. There’s also a change you’d get stopped on your exit if you carry too much out of the country. With this said, it is not uncommon, especially in some African countries and Asian countries. We need to also remember that not too long ago, it was pretty similar in China, only they had a ‘foreigners’ currency that the locals couldn’t use. It is generally common in countries where the dollars are much needed. In fact because my business travels often take me to obscure places, I face this all the time.

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