• Local businesses & tourist service providers vacillate between prioritising economic survival & ethics 
• Foreign tourists back reasonable overcharging alongside some regulation over being ‘ripped-off’  

The videos showing local vendors in Kalutara and Colombo trying to rip-off foreign tourists brought to the surface a topic that had been forgotten, yet requires attention, in connection with tourism in the present economic climate.

Charging Rs. 800 for an ulundu wade and a plain tea, and trying to charge Rs. 1,900 for a kottu, which the videos showed, are merely the tip of the iceberg. These incidents attracted significant attention because these videos went viral on social media platforms. Every day, foreign tourists pay more and get scammed in Sri Lanka. However, these acts are more prevalent than Sri Lanka cares to admit, and when it comes to areas such as the Southern Coast, overcharging seems to be the norm. 

Many who discuss the matter on social media platforms claim that foreigners are fine with paying more when in another country, while there is another group claiming that overcharging foreign tourists will tarnish the country’s name as a tourist destination and that foreigners should be charged the same prices applicable to local tourists.

To look into these concerns, The Daily Morning spoke to several foreign tourists, as well as several business owners who provide goods and services to foreign tourists. 

Foreigners’ charges versus locals’ charges

To discuss the vendors’ side of the story, The Daily Morning spoke to several vendors based in two tourist hotspots in Sri Lanka, i.e. Colombo and Matara, about overcharging foreign tourists. While many justified the act citing economic hardships, some pointed out that businesses should have ethics.

Forty-year-old business owner running a restaurant in Weligama, Matara, Wickramasinghe (name changed on request), opined that overcharging tourists is essentially a mechanism to protect businesses and local customers. Adding that local businesses have to cover their costs and keep profit margins intact, he said: “Most of these down-South based businesses run on loans, especially after 2020 when the Covid-19 pandemic started. Before 2020, we could charge from customers reasonably and still keep a good profit margin. However, the situation now is different. We cannot increase the prices of our food to meet the same profit margin. Locals would not be able to buy food from us. So, we are forced to overcharge foreign tourists, who can pay more, instead of charging everyone the same amount, in which case even locals facing economic issues will have to pay increased amounts which they might find unbearable. It is this overcharging that helps us keep the businesses running. So, by overcharging only foreign tourists, we are essentially protecting local tourists and local businesses such as ours.” 

In response to a question as to what percentage of a price increase (overcharging) he thinks is reasonable when serving foreign tourists, Wickramasinghe said that generally, his restaurant charges around 20-30% more from foreign tourists than from local tourists. Speaking about how businesses overcharge foreign tourists in the Southern part of the country, especially in Galle and Matara, he said: “Overcharging tourists has become extremely normal so much so that some businesses charge the same amount from locals as well. There are many businessmen that overcharge local tourists to discourage them from trying to obtain goods and services, in order to keep space available for foreign tourists who spend more. The main justification given by such businessmen to discriminate locals and prioritise foreigners is that locals damage properties and don’t know how to behave. This is just a silly excuse. It is a matter of money, because foreigners always pay more whereas locals question the rationale behind the prices.”

However, 35-year-old business owner in Colombo, Savinth Athauda had a different opinion about having different prices for different customers. While condemning the overcharging of tourists, he said that businesses should have ethics and a long-term plan to attract more customers. “There are many business owners who think that their goal should be to charge as much as possible from foreign tourists. That may work in the short run. But, it is a classic example of killing the goose that lays the golden eggs. I think that a business owner with a vision would always charge the ordinary prices now, and get customers to keep coming back every time they come to Sri Lanka, and recommend their business to more people, which, in the long run, brings more customers and more profit. A proper business should always try to create more customers instead of ripping off one customer.”

 With regard to businesses overcharging foreign tourists, Athauda said that businesses should have ethics about dealing with customers and that Sri Lanka is yet to adopt the concept of the ‘customer being the king’. “Without customers, there would be no business. So, we should focus on protecting customers and the trust that they have kept in us,” he said.

Meanwhile, a manager of a star class hotel in Galle, who wished to remain anonymous, said that many reputed businesses have strict policies against discrimination, and that those policies apply to overcharging foreign tourists as well. He added that in his hotel and in similar establishments, both foreigners and locals get treated in the same manner.

Spending US dollars in a developing country

‘Do foreign tourists mind paying more?’ is a question that constantly pops up in the discussion on overcharging tourists. Comments sections on social media platforms show that many Sri Lankans think that foreign tourists do not care about paying more in a country like Sri Lanka.

The Daily Morning reached out to several foreign tourists in Colombo to discuss what they think of this notion, and they expressed mixed opinions about overcharging.

Noting that a slight increase in the prices of goods and services is not a considerable issue, 37-year-old British national, Kenneth Peterson said: “However, there should be a system to regulate how vendors increase prices above the legally-set prices, because allowing any person to increase prices as and when they want would be really bad for Sri Lanka as well as for travellers. Some stores charge Rs. 20 extra for a bottle of a chilled soft drink (which comes in plastic bottles). The printed price is Rs. 170, but, they charge Rs. 190. When inquired as to why that is, they said that electricity charges are high, which is understandable. I think that in cases like that, it is acceptable to increase prices. However, there should be some regulating agency to monitor that.” 

When questioned about food prices, he explained: “I think that it is difficult to set a price for cooked food of any sort, and it depends on many factors. I travelled to Galle and Matara areas before heading to Colombo, and I have had similar dishes in both the areas. There was no considerable difference in their prices.” Speaking about the above-mentioned videos which showed local vendors overcharging tourists, Peterson said that while vendors have the discretion to charge whatever amount that they think is reasonable, the tourism authorities should educate the vendors about charging reasonably. Allowing food prices to fluctuate unreasonably, he said, would discourage foreign tourists and would have a negative impact on the tourism industry.

Meanwhile, 28-year-old United States (US) national and digital nomad who has been living in and working from Sri Lanka for several months, Andrea (refused to provide the full name due to personal reasons) said that while overcharging foreign tourists is a common phenomenon in many countries, there are many businesses that, as a policy, do not change prices on the basis of customers’ nationality. She added that a tourist should be able to find places that charge reasonably. She explained: “It happens in most countries, and as a (digital) nomad who has travelled in over 20 countries, I understand why people do that. Sri Lanka is no different. Given the economic issues that many businesses face and have been facing during the past few years, I think that overcharging (foreign) tourists is more justified in Sri Lanka than in other countries.” 

While acknowledging the diverse nature of businesses that provide services and goods for foreign tourists, she said that there are, however, businesses that charge everyone alike. She opined that tourists who mind paying more than locals do should simply do what she called a ‘market research’: “There are many places that don’t overcharge tourists. If you are a foreigner travelling in Sri Lanka and are on a budget, I suggest that you go to a few restaurants and compare the prices. If the restaurants are located within close proximity, chances are that there is competition (among the restaurants) and some restaurants have lower prices.” About the aforementioned videos of local vendors overcharging foreign tourists, Andrea said: “Those videos were infuriating. They showed greedy businessmen, not businessmen who have upped prices due to economic challenges. I think that everyone, even locals, should condemn and boycott them.” 

Another foreign tourist who refused to provide her name said that overcharging is a shameful act, and that it is against ethical business practices. She blamed foreign tourists for not filing complaints against such businesses. “I always pay tips and I don’t mind doing that in order to appreciate a good service. But, being overcharged is not the same as tipping,” she added.