The "tourist price" and how it negatively affects everyone involved.

A Public Service Announcement for both sides. Not all Americans are rich! I feel like this is a funny topic because it seems like both Europeans and Americans constantly get this fact mistaken. I think that some Europeans see certain things on television like the large suburban homes in some parts of the United States, or they see the gas-guzzling SUV's toting kids to and from school, and then make the general assumption that all Americans are wealthy. Obviously this is not the case, but it can lead to a variety of annoying side effects, like paying more for a product or service simply for being an American. I also believe that quite a few Americans feel as if our dollar is some almighty currency that all others pale in comparison to. This leads to the occasional shock and awe when they find out that the price of a Starbucks coffee in London is about twice as much as it would be in most of the U.S.

In some Eastern European countries, you can still live pretty well on the American dollar, but we no longer have the buying power that we once did. When traveling through most of Prague you can find a larger meal for just a few dollars, but head towards the “old town” area and you can be expecting to pay San Francisco prices for any dinner or drinks that you find. As you might expect, the old town is one of the areas in Prague that is a high priced tourist area. In areas like this, establishments inflate their prices to cater to, what they assume are, big Americans wallets. That leads to a surprise for some people. Occasionally, American travelers visit somewhere like Prague and they find cheap meals in one area followed by overpriced restaurants just a few blocks closer to the city center. In fact, I even had a bartender at a popular old town bar tell me that there are two different drink menus that they hand out. The one written in English has different prices than the one in Czech.

I think that this “American pricing” is what really irks me about being labeled American. I am sure that there are still plenty of American travelers that head over to foreign countries and spend plenty of money with no thought of a budget. Unfortunately, when someone lives and works in a foreign country, they only get paid a salary that is equivalent to what a local would get, but they get charged the “American price” and almost can't survive financially. It isn't until they explain that they live there or just go to a different store that living becomes affordable.

What happens is that this system of overpricing is actually bad for both the customer and the vendor. Often times the customer may not buy something that they otherwise would have because they know they are getting gouged. Although the vendor may make a few sales and get a few extra dollars of some unsuspecting tourists, they are actually selling less products and taking in less net profit in the long run. Then there's the possibility that the customer can just walk away and take their business elsewhere, but their word of mouth will travel and slowly erode away at the vendor's profits even further. Plus they may tell their friends and family not to travel to some beautiful part of the world to avoid being taken advantage of. This brings even more problems to some of the cities around the world that rely on tourism. The bottom line here is that pricing items according to someone's nationality is a bad idea and will create more negative long term effects than positive.

Empty tables. An effect of "American pricing" driving customers elsewhere?

So have you felt like you've been charged the “American price” for something while traveling? Or are you a vendor that knowingly up-charges tourists whenever the opportunity arises? Let us hear what you think about the the idea of variable pricing. Do you feel like it is wrong and does it annoy you, or do you feel like it's just something that you've come to expect?