Online Booking Agencies Using Onshore Rates?

[zink]

Do there exist an online agency for booking hotels that allows payment by credit cards and uses onshore rates (USDTHB=33.9 according to Bangkokpost).

I checked Asiarooms that their USDTHB rate is something like 31.xx!

[torrenova]

I think they will all be using offshore as they will want their FX converted prior to receipt. Some may be playing the game as well !

[onethailand]

Part of the problem is how the billing is made. Since most Thai hotels charge in baht, the website has to pay in baht, so they bill in baht. If the processor is offshore, however, then they use an offshore rate.

I guess the logical thing to do is to use an onshore processor. But the point you've raised is valid - and combined with the likelihood that you are paying additional tax by using sites outside of Thailand (for example, rates from UK-based sites probably have another 17.5% VAT tacked on), I would highly recommend double-checking any time you make an online booking - and try to stick to sites which are based locally.

[enyaw]

Part of the problem is how the billing is made. Since most Thai hotels charge in baht, the website has to pay in baht, so they bill in baht. If the processor is offshore, however, then they use an offshore rate.

I guess the logical thing to do is to use an onshore processor. But the point you've raised is valid - and combined with the likelihood that you are paying additional tax by using sites outside of Thailand (for example, rates from UK-based sites probably have another 17.5% VAT tacked on), I would highly recommend double-checking any time you make an online booking - and try to stick to sites which are based locally.

The way I see it is since the offshore suppliers are paying directly to the hotels they will pay the onshore rate in the same way me and you would if we was to book with the hotel directly? Maybe the lower exchange rate acts as an insurance against the billing system which would be paid via a monthly statement or similar and could incur fluctuations from the time of booking?

[Jiu-Jitsu]

Some booking systems e.g. sawadee.com utilise Dynamic Currency Conversion. In other words the price on the website is in Thai baht, but they will bill you in the currency of the card presented. The caveat here is that they will do so at an unfavourable exchange rate and then share the revenue with the local bank in the form of lower processing charges. The losers are you and Visa/Mastercard International.

Sawadee. com used to practice "back office DCC", but since the practice was highlighted, there is now some small print on the final payment page.

They still don't offer you the choice of transaction currency. Decidedly dodgy.

Edited November 3, 2007 by Jiu-Jitsu

[onethailand]

Some booking systems e.g. sawadee.com utilise Dynamic Currency Conversion. In other words the price on the website is in Thai baht, but they will bill you in the currency of the card presented. The caveat here is that they will do so at an unfavourable exchange rate and then share the revenue with the local bank in the form of lower processing charges. The losers are you and Visa/Mastercard International.

Sawadee. com used to practice "back office DCC", but since the practice was highlighted, there is now some small print on the final payment page.

They still don't offer you the choice of transaction currency. Decidedly dodgy.

Most of the booking sites have tried all sorts of things to hide costs and maximize margins. However, offering a choice of transaction currency is beyond the ability of most sites, let along online travel sites. It would also be extremely risky for a site to allow this unless their processor was in Thailand - and for bookings of hotels overseas, the nominal currency would be USD, Euro or GBP.

[Jiu-Jitsu]

The Sawadee website allows for booking of Domestic accommodation, so the use of DCC in this case is simply unacceptable. I don't want to be offered a choice of currency, I'm happy to pay in the quoted currency.

If they want to charge my in £, US$ or Euro, they why not quote in those currencies. It's just an underhanded practice. No less.

Luckily for me, my bank refunds these underhand charges and then reports the guilty company. So they should be careful.

[onethailand]

The Sawadee website allows for booking of Domestic accommodation, so the use of DCC in this case is simply unacceptable. I don't want to be offered a choice of currency, I'm happy to pay in the quoted currency.

If they want to charge my in £, US$ or Euro, they why not quote in those currencies. It's just an underhanded practice. No less.

Luckily for me, my bank refunds these underhand charges and then reports the guilty company. So they should be careful.

I think that if a site wants to charge in an alternative currency, they should mention this at the point of transaction, not in some small print buried elsewhere.

That being said, I looked up the Visa exchange rate for today at http://www.corporate.visa.com/pd/consumer_ex_rates.jsp (thanks for your DCC link to Wikipedia, btw) - and it is 33.97 for 1 USD - way better than Bangkok Bank is offering either over the counter (33.62 on large banknotes) or even for TT (33.89). I have always felt that using a CC would give you access to the best rates, so in this particular case it happens to be true. Mind you, your CC issuing bank may tack on an additional charge but that is beyond my ability to detect...

Food for thought. Very useful information for me, thanks again.

[Jiu-Jitsu]

The Sawadee website allows for booking of Domestic accommodation, so the use of DCC in this case is simply unacceptable. I don't want to be offered a choice of currency, I'm happy to pay in the quoted currency.

If they want to charge my in £, US$ or Euro, they why not quote in those currencies. It's just an underhanded practice. No less.

Luckily for me, my bank refunds these underhand charges and then reports the guilty company. So they should be careful.

I think that if a site wants to charge in an alternative currency, they should mention this at the point of transaction, not in some small print buried elsewhere.

That being said, I looked up the Visa exchange rate for today at http://www.corporate.visa.com/pd/consumer_ex_rates.jsp (thanks for your DCC link to Wikipedia, btw) - and it is 33.97 for 1 USD - way better than Bangkok Bank is offering either over the counter (33.62 on large banknotes) or even for TT (33.89). I have always felt that using a CC would give you access to the best rates, so in this particular case it happens to be true. Mind you, your CC issuing bank may tack on an additional charge but that is beyond my ability to detect...

Food for thought. Very useful information for me, thanks again.

In the UK, it is standard for the CC issuing bank to take a 2.5% to 3% commission. It is this commission that DCC is aimed. But, we also have some institutions that do not levy any commission, so the full(or very close to) Visa rate is possible to achieve.

Those institutions are:

Nationwide Building Society Visa Debit & Credit card.

Audi Card Mastercard CC

Post Office Mastercard Mastercard CC

So, the fact is that some companies conspire to force you to accept a poor exchange rate in a very underhand manner. They could quite easily offer you both options. For instance, if you pay via Paypal, they give you both options.

[Jiu-Jitsu]

Some info for the US market:

Visa and Mastercard charge a 1 percent foreign transaction fee, American Express charges 2 percent, and the companies issuing the cards can add fees of their own.

According to a 2005 credit card survey by Consumer Action, a nonprofit organization focused on consumer education and advocacy, most issuers charge 2 to 3 percent, which includes the Visa or Mastercard charge. But some issuers are geared toward the world traveler -- not only do they forego the foreign-transaction fee, but they foot the credit card company's as well.

The survey listed Amalgamated Bank, BMW Bank, Capital One, Discover and Tompkins Trust as charging no fee for purchases made abroad.

You need to check as to whether it is up to date.

[onethailand]

Some info for the US market:

Visa and Mastercard charge a 1 percent foreign transaction fee, American Express charges 2 percent, and the companies issuing the cards can add fees of their own.

According to a 2005 credit card survey by Consumer Action, a nonprofit organization focused on consumer education and advocacy, most issuers charge 2 to 3 percent, which includes the Visa or Mastercard charge. But some issuers are geared toward the world traveler -- not only do they forego the foreign-transaction fee, but they foot the credit card company's as well.

The survey listed Amalgamated Bank, BMW Bank, Capital One, Discover and Tompkins Trust as charging no fee for purchases made abroad.

You need to check as to whether it is up to date.

I can personally confirm that Capital One does not impose foreign transaction fees. Chase and Household Bank definitely do impose foreign transaction fees. In Household Bank's case, it's roughly 1-1.2%.

One time I actually looked at the DCC rate when making a purchase at the Emporium - the rate was so bad I rejected it and opted to do the charge in baht. Thus, when in Thailand, I don't believe that using DCC is beneficial to the consumer holding a foreign credit card because inevitably they use the offshore rate. Better to let Visa handle the conversion.

[zink]

Part of the problem is how the billing is made. Since most Thai hotels charge in baht, the website has to pay in baht, so they bill in baht. If the processor is offshore, however, then they use an offshore rate.

I guess the logical thing to do is to use an onshore processor. But the point you've raised is valid - and combined with the likelihood that you are paying additional tax by using sites outside of Thailand (for example, rates from UK-based sites probably have another 17.5% VAT tacked on), I would highly recommend double-checking any time you make an online booking - and try to stick to sites which are based locally.

Actually, I meant local sites. However, some of them use Singapore banks for credit card processing. I guess this is the reason for offshore rates

Some booking systems e.g. sawadee.com utilise Dynamic Currency Conversion. In other words the price on the website is in Thai baht, but they will bill you in the currency of the card presented. The caveat here is that they will do so at an unfavourable exchange rate and then share the revenue with the local bank in the form of lower processing charges. The losers are you and Visa/Mastercard International.

When I made a booking on Sawadee.com couple years ago, I noticed that the rate was significantly below official exchange rate, and that was before the offshore/onshore gap.

If they want to charge my in £, US$ or Euro, they why not quote in those currencies. It's just an underhanded practice. No less.

Asiarooms mention that the credit card will be charged in US$, at a horrible 31.xx rate compared to prices that they are quoting in bahts.

[onethailand]

Actually, I meant local sites. However, some of them use Singapore banks for credit card processing. I guess this is the reason for offshore rates

Soon... working on it now.

Singapore banks actually use rates pretty close to the onshore rates. I remember checking this in the past - Malaysia's rates are also close to the onshore rates, and apparently HK as well.

[zink]

I booked a flight on Air Asia using a foreign credit card and suprisingly got an excellent exchange rate, 48.39 for euro which corresponds to 33.xx dollar rate. If only there would be a hotel booking agency with these kind of exchange rates.

[torrenova]

Air Asia's booking process is outside Thailand to avoid the 7% VAT which you have to pay if you pay at one of their offices.