The economics of travel

On my recent trip to Uyuni Salt Flats it emerged that I paid more than double the money for the trip than others. I already knew better than to ask other people what they paid, but I was asked by another member of the group and responded honestly. I had booked in advance using Trip Advisor because I’d read in one of the guides that this is the best and safest thing to do. My fellow travelers had paid the night before direct with the company at one of the many tour operators with shop fronts in Uyuni.

My immediate reaction was to feel foolish and that somehow I’d been ripped off. But why is this a common reaction? I was perfectly happy with the tour, it had exceeded my expectations. The amount I’d paid was far less than a similar trip would have cost at home so why did I still feel that somehow I’d been taken advantage of? Why should this take the shine of a once in a lifetime experience?

This got me to thinking about economics more broadly (stay with me.. or click away now!). Why, as western travelers and tourists do we find it a positive thing to go somewhere that is cheap for us? There’s really little I love more than paying £1.50 for a pint that would have cost £5 at home. Is this ethically a good thing though? Is there a case to be made that morally and ethically, we should be prepared to pay the price we would pay at home? We get paid wages (well, most of us do) for the work we produce, someone in a poorer country may do exactly the same work and get paid a fraction of the amount. We then take our (inflated?) wages to their country and pay the same as that person would have to. It doesn’t seem quite right somehow.

Back to my unjustified feeling of being ripped off. Who was really getting ripped off there? I’ve already said that the trip cost much less than a similar trip would cost at home. Was it me that was really ripping off the Bolivian company/driver? Would a more ethically/morally correct way of relatively rich westerners to behave in poorer countries, be to pay the same price for everything abroad that they would pay at home? After all, most of us get the wages to cover that. In Bolivia it’s definitely the case that wherever they can, they’ll charge “gringo prices” but what is necessarily wrong with that? For me it’s the “shadyness” of it the grates the most, if it’s honest and up front then I wouldn’t have a problem – local price is this, international price is that…it’s the way it’s supposed to work with buying petrol.

I suppose there’d be a couple of negative side-effects if every relatively rich western tourist decided to pay “home price” for things in a poorer country. Firstly, many of the businesses that provide for travelers are not necessarily owned by people from that country, and even if they are it’s quite likely to be the richest 1% elite of that country. So paying more would simply make the international or ruling elite richer. Secondly this would place an even higher premium on working in sectors that bring locals into contact with relatively rich westerners. Undermining other sectors of the economy and probably generating greater abuse of the environment.

I’m sure this is a quandary that is very old and well-rehearsed and I’m late to the party, but this is a trip of learning and discovery after all. What I think I might do is not be too shy with a decent tip whenever it’s warranted, it’s not gonna kill me to pay £5 a pint in a nice local bar once in a while.

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