Money and Costs
Budget: Less than US$50
- Cheap guesthouse room: US$5–10
- Local meals and street eats: US$2–4
- Local buses: US$2–3 per 100km
- Air-con hotel room: US$12–50
- Decent local restaurant meal: US$5–10
- Local tour guide per day: US$25
Top End: More than US$150
- Boutique hotel or resort: US$50–500
- Gastronomic meal with drinks: US$15–50
- 4WD rental per day: US$60–120
Lao kip (K)
The official national currency in Laos is the Lao kip (K), but Thai baht (B) and US dollars (US$) are also commonly accepted.
ATMs are now found all over Laos. But before you get too excited, ATMs dispense a maximum of 700,000K to 2,000,000K (about US$85 to US$250) per transaction, depending on the bank, not to mention a variable withdrawal fee. If you also have to pay extortionate charges to your home bank on each overseas withdrawal, this can quickly add up.
A growing number of hotels, upmarket restaurants and gift shops in Vientiane and Luang Prabang accept Visa and MasterCard, and, to a much lesser extent, Amex and JCB. However, many places will also pass on the transaction fee to the customer, usually around 3%. Outside of the main towns, credit cards are virtually useless.
Banque pour le Commerce Extérieur Lao (BCEL) branches in most major towns offer cash advances/withdrawals on MasterCard and Visa credit/debit cards for a 3% transaction fee. Other banks may have slightly different charges, so it might be worth shopping around in Vientiane.
Laos relies heavily on the Thai baht and the US dollar for the domestic cash economy. An estimated one-third of all cash circulating in Vientiane, in fact, bears the portrait of the Thai king, while another third celebrates US presidents. Kip is usually preferred for small purchases, while more expensive items and services may be quoted in kip, baht or dollars. Anything costing the equivalent of US$100 or more is likely to be quoted in US dollars.
The majority of transactions will be carried out in kip, however, so it's always worth having a wad in your pocket. Notes come in denominations of 500, 1000, 2000, 5000, 10,000, 20,000, 50,000 and 100,000 kip. Small vendors, especially in rural areas, will struggle to change 100,000K notes.
For current exchange rates, see www.xe.com.
After years of volatility the kip has in recent times remained fairly stable at about 8500K to the US dollar. Don't, however, count on this remaining the same.
Generally exchange rates are virtually the same whether you're changing at a bank or a moneychanger. Both are also likely to offer a marginally better rate for larger bills (US$50 and US$100) than smaller bills (US$20 and less). Banks in Vientiane and Luang Prabang can generally change UK pounds, euros, Canadian, US and Australian dollars, Thai baht and Japanese yen. Elsewhere most provincial banks usually change only US dollars or baht.
Licensed moneychangers maintain booths around Vientiane (including at Talat Sao) and at some border crossings. Their rates are similar to the banks, but they stay open longer.
There's no real black market in Laos and unless there's an economic crash, that's unlikely to change.
Tipping is not customary in Laos except in tourist-oriented restaurants, where 10% of the bill is appreciated, but only if a service charge hasn't already been added.
Travellers cheques can be cashed at most banks in Laos, but normally only in exchange for kip. Cheques in US dollars are the most readily acceptable. Very few merchants accept travellers cheques.
Bargaining in most places in Laos is not nearly as tough as in other parts of Southeast Asia. Lao-style bargaining is generally a friendly transaction where two people try to agree on a price that is fair to both of them. Good bargaining, which takes practice, is one way to cut costs.
Most things bought in a market can be bargained for, but in shops prices are mostly fixed. The first rule to bargaining is to have a general idea of the price. Ask around at a few vendors to get a ballpark figure. Once you're ready to buy, it's generally a good strategy to start at 50% of the asking price and work up from there. In general, keeping a friendly, flexible demeanour throughout the transaction will almost always work in your favour. Don't get angry or upset over a few thousand kip. The locals, who invariably have less money than foreign visitors, never do this.