India's discriminatory travel policies

I negotiate technology deals for a living. But of late I have diversified into travel negotiations. With hotels and car services in India. Because the savings are big enough to pay for 2-3 more client staff going on the trips. I nickel and dime and make sure hotel rates include breakfast, wifi, airport transfers; car service include plenty of hours and mileage.

And I hate it. Because I know no matter what I do, an average Indian off the street would get another 40 to 50% off. Even the local airlines with their official tariffs charge fares bought in foreign currency a premium. Can you imagine the lawsuits in the US if our hotels and airlines charged more based on national origin? But it continues unabated in India.

One practice, though, is beyond unreasonable - it is unethical. Hotels and car services quote you in dollars, then convert that into Indian rupees, then Amex converts on your statement back to US dollars. But the intermediate conversion is 7, 8, 10% more than the official rate, so they make out on that also. Well respected hotels like the Leela in Bangalore, the Taj chain, the Travel House car service all do this and just shrug their shoulders when you point this out. I have started to dispute that difference on my Amex. You quoted me in dollars. Stick to that original rate.

To my friends in the Indian outsourcing business, please negotiate rates for your visitors and lobby the government to penalize discriminatory behavior. Your visitors come to India to save money, not to get gouged. The practices of the travel industry create an unethical view of Indian business in general.

Comments

[Nitin]

Vinnie,
ForEx fleecing is just one angle. What about the inefficiencies in the facilities/administrative lobs that work for Indian companies, both MNCs and locals included? Don't you think if they were more efficient (ethical?), the clients would save a lot on local travel, car hire and other stuff? Not to forget their hapless employees who would be more grateful.

[rajagopal sukumar]

This is utterly shocking. I didn't realize this much gouging was going on. I knew that hotels applied a differential tariff and we have negotiated with some of the hotels on behalf of our clients. Generally we take care of local travel for our clients at our expense. But this sort of discriminatory practices are really bad.

Btw, it was good seeing you in India last week.

[vinnie mirchandani]

a reader writes "These sorts of discriminatory practices are not restricted to the travel industry. Take for example a round of golf at the KGA in Bangalore. Cost for an Indian non-member -- Rs. 800. Cost for a non-Indian -- Rs. 2500"

actually that reminds me I took a group of visitors on a trip to a local temple, and the entry fee for foreigners was 10X that for Indians. And they would not accept local currency.

[Harish]

Part of the discriminatory pricing has historical government sanctions. But with the global economy I agree that there should be uniform pricing for all. Unless there are are special deals like VUSA air fares or packages that are typically economically priced --- and maybe only for foreigners or locals. "The practices of the travel industry create an unethical view of Indian business in general" is rather a harsh indictment of ALL Indian business.

[vinnie mirchandani]

Sukumar, most Indian tech vendors are very gracious and offer local transport to visitors. Some clients though have policies against "gifts" from vendors and do not want to avail of that...

[Arvind]

As you say, domestic airlines charge in dollars for foreign tourists and the price is much higher than for Indians. This is changing now. Think some of the airlines have started offering tickets at the same price for foreigners - http://timesofindia.indiatimes.com/articleshow/402063.cms

And foreigners have to pay more for visiting the Taj Mahal. Related thread here - http://www.indiamike.com/india/agra-f61/taj-mahal-what-does-it-cost-to-visit-t8271/

Don't know the rationale behind such stupid decisions. On one hand we want more tourists to visit India and on the other we charge exorbitantly, taking as much as possible from the tourists' pockets. All tourists visiting India should take note of this discrepancy and start demanding their travel agents for explanation. When the escalation starts to happen at the higher end of the chain, it will bring changes to the lower end, I believe.

[Anshu Sharma]

I am 100% with you. When I visited the Taj Mahal, the entry tickets were: $1 (Rupees 50) for Indians and $50 for "foreigners". And guess how they figure that out - colour of your skin and ability to speak Hindi. Borderline racism. Mmm. Outright racism.

India also has other double standards. Millions of Indians work in other countries and we fight for their rights. But the Bangladeshi and Nepali immigrants in India have few rights and are treated with suspicion. How fair is that?

[Sairam Gopalan]

Vinnie

Most of the vendors take care of the travel pickup and drop while the visitors are at their location for the outsourcing evaluation visit.

The main issue is hotel. The price tag is going up exhorbitantly higher while the facilities have either remained the same or not on par with the price that you would pay in US or elsewhere.

Supply vs Demand concept only and ofcourse being greedy without realizing how it can impact the over all situation.

Worry is whether they price the same way to common men as that can be a daunting cost structure for them.

I am sure all of this will have an impact on how this is viewed as part of the decision making process of a customer.

[Karl Waldman]

It is more than just the Taj - I visited Charminar in the Muslim section of Hyderabad and was charged what I assume was the "ghora" price -- 10x what everyone else was charged - of course it was only $2.

It is not just India that does this - I've seen the same in parts of China and Latin America. Typically the amount is not egregious and I don't usually complain - which I guess makes me part of the problem.

[anonymous]

This happens all over Asia. They break the very first rule in blatantly maintaining a discriminatory price.

- Taxi and Auto drivers will have two fare sheets

- Shops will have a "foreigner price" and an "Indian settled abroad" price and a "Indian in India" price. They make 100% margins on the "Indian in India" price. You can only imagine how much the other two get fleeced.

-Hotels will have a different section for foreigners and "indians settled abroad" vs. Indians living in India in the same hotel.

- The hotel staff take turns in servicing these different floors - as they get paid tips in international currency. If you pay in Ruppees you can very easily see the quality of service drop.

- Hotel bartenders hover on you worse than bees to make international currency tips.

[Padmanabha Rao]

Differential pricing is a basic practice in any business, whether private or public. However, the transaction costs should be reasonable. On the other hand, it might well be the case that transaction costs here in India actually depend on who is being serviced. We are still wary of foreigners -politically, economically, socially- and that does add to the transaction cost. It will be some more years before our dilemma 'I want don't want to be exploited but I want to be exploited' is replaced by a more entrepreneurial operation.

[vinnie mirchandani]

Padmanabha, sure if transaction or delivery costs are higher, that justifies the higher price. If foreginers are more demanding, charge them a bit more for their rooms. If they want to fly business versus economy, charge more. But for same or similar product? How would you like it if a hotel in New York looked at passports and said "as an Indian, this is your tariff...40% more". I negotiate deals for a living...and each deal is priced differently. But it is based on volume, type of product, cost of delivery - not national origin. I fail to understand your argument about "explotitation" when you are pricing a rental car or a hotel or entry to the Taj, unless you think they are higher risk of causing damage...

[Padmanabha Rao]

That would be neat :-D I mean differential pricing based on Nationality would be a good idea if they were a small number of nations and a small number of items! (like the differential Visa pricing seen in many countries -Indian? $25. American? $0. Never mind that that differentiates to infinite%).

I think international travel/transaction continues to be defined as Commercial i.e. acultural. So, the citizen and foreigner categories are based on the notion that the foreigner wouldn't mind being charged the commerical prices/values he is used to back home. $10 for a cinema ticket back home? And peanuts for a dekho of the Taj, right? India knows it and so does the foreigner. Transparency, Vinnie, don't you think :-D Where travel/tourism/visitation is acultural the pricing will be transparently exhorbitant.

The problem to solve is to make the visitations cultural -expanding the footprints, literally. As long as the foreigner's interaction is limited to pictureque pockets so long will the mutually wasteful high-cost exchanges go on. As usual - we need sheer numbers. I am sure Huawei Technologies which rents many rooms in The Leela Bangalore will vouch for that.

[David Scott Lewis (Startech Global Corporation, Tsinghua University)]

Fascinating post. I don't see much of this in China. (I didn't say that I never see it; I said that I rarely see it.)

Usually it's more an issue of dumber-than-wood cab drivers getting lost than it is blatant discrimination. (My "favorite" stories are cabbies born and raised in BJ who really, truly have no clue how to get to either Tsinghua or Beida from the Chaoyang District.) There are some tricky things, like the outer lane cabs at SHA and the like, crime in GD province, things like this, but it's usually not too bad for tourist executives from the West.

For us living here, there's a lot of goofiness, but we get used to it -- even start ignoring it. I guess it's called adapting to one's environment. And, for what it's worth, I find that I'm becoming more and more like the locals each and every day. That's good in some ways, awful in other ways ... but always amusing!!

[Anil Kurnool]

Vinnie,

Though there might not be any different rate-cards based on nationality, but I did however see that Chinese avoid "others" in their shops in places like Singapore or Malaysia.

In US, there is no different rate card for Indians, but if you are a lone traveller (without SSN) a lot of things can be different. Most of the Amtrax/Greyhound self ticketing machines do not accept Indian Credit Cards (be it Visa or Master). Many of the places do not accept Indian Banks' "Dollar" cards and politely, yet firmly ask you for bills.

Car rentals is a different ball-game all together. Your Indian issued IDL is not accepted and payments based on your Indian Credit card again are a no-no. (At least in India, you may be pickpocketed but you still get a car).

Cab drivers any where in world are same. Outsiders beware.

[vinnie mirchandani]

Anil, shame on the US if we in spite of the weak dollar do not make it easier for foreign visitors. I think the problems with credit cards deal with historical Indian exchange controls, and those with cars relate to insurance coverage issues. When I rent cars overseas (try and avoid) I usually pay the exorbitant daily rates sold by the car rental because you never know the fine print in different countries...

[UniteFamilies]

Vinnie,
As the comments here point out, the issues and 'travel policies' cut both ways.

You point to the need to lobby against government sanctioned ‘discriminatory’ practices to make it ‘cheaper’ for your clients to visit India….Wonder what your views are on lobbying YOUR government against discrimination against spouses of American Legal Permanent Residents to travel to the US:
http://www.unitefamilies.org/eng/faq/index.html

I guess one can only call out what impacts one individually. ;-)

[vinnie mirchandani]

UniteFamilies: happy to provide my pov. The US has an immigration crisis. We have too many candidates for not enough slots. Given the need to ration, my personal voice says top of the heap as immigration candidates should be highly qualified professionals. Followed by varying degrees of labor - including blue collar. Then some humanitarian asylum seekers. I would throw those who come by lottery, brothers, sisters way down the priority.

Spouses would be somewhere in the middle. Let's face it our immigration has always been skewed towards younger males who came here single, assimilated and married here. In past they did not go home to find a spouse, and bring spouse back. Many never went home ever. With our new mobility it is a new phenomenon and certainly should make up a percentage of our visas, but not a huge one.

So not what you want to hear, but if anything I would lobby the government for more of our immigrant slots to be driven by merit rather than "love or lottery"

[UniteFamilies]

Fair points Vinnie,
However, you miss the funny point here. Spouses are not asking for charity... they are not eligible for even a visitor’s visa to temporarily enter the country. Even temporary visa holders (H1, FI, Business Visa etc) are allowed to sponsor and bring their spouses to live with them with no delay. Only Legal Permanent Residents have to endure this quirk.

As you rightly said, the system is broken... with no fix in sight.

[vinnie mirchandani]

UniteFamilies, that makes no sense. As they say the law is an ass. And bureacrats and politicians who makes and interpret those laws even worse...