I was an uncommonly frugal traveler on my first trip to China, so when I looked at hotel rates, I shopped, compared, chose the best one and booked it… only to find out I was using the lowest rated provider on the web and paying just as much as I would have to any of their competitors. I got suckered by an artificial exchange rate.

The exchange rate from US dollars to Yuan Renmimbi is remarkably constant. One might even suggest it is suspiciously constant or even a bit fixed, but that’s quite another matter and one that really doesn’t affect this debate.

The scam goes like this: they know what the room costs in RMB, but they wiggle the exchange rate to something more favorable (that is untrue) and quote you an estimate in dollars, assuming you can get that exchange rate, which you can’t.

One case I personally saw was a traveler in 2001 who was quoted a rate of $32 per night from an online provider, based on an exchange rate of 10:1. The exchange rate is not 10:1, nor could this mistake have easily been understood. The room really cost 320 RMB per night, so with the exchange rate the room came out to almost $40 per night, not even counting taxes.

These companies are not working under the permission of the Chinese government, these are travel brokers working in any number of other countries, so be on the lookout. It’s not that he wasn’t willing to pay $40 per night, it’s that he was tricked in to using this company because they took advantage of his ignorance about how the exchange rate worked.