Should You Use Cryptocurrency on Vacation?

In April 2021, the Bobby Hotel announced that it would become the first hotel in Nashville to accept cryptocurrency—including Bitcoin, Ethereum, Dogecoin, and stable coin—as payment for its rooms and services. The owners of the funky hotel are cryptocurrency investors, so when the father of the bride at a wedding held at the hotel asked if he could pay his big tab with Bitcoin, the hotel owners decided to look into what it would take.

“This is a tech-forward hotel,” says Jeff Crabiel, area general manager of the Bobby. 

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The Bobby is not alone. Airlines, the Kessler Collection of luxury hotels, and even the paid parking at Denver International Airport all allow customers to pick an option other than cash, check, or credit card.  

At the Bobby, you would still use a credit card to hold your reservation at the beginning of a trip, and then use the cryptocurrency option to settle your tab when you check out. Crabiel says most people use it for larger purchases of more than $1,000. After all, it’s a bigger bang for your buck if you are saving on foreign exchange rates for a reunion dinner for 20 or airfare for a family of four than it is for a cup of coffee. At the Bobby, at least you can charge that coffee or cocktail to your room and then pay the whole tab on cryptocurrency when you check out.  

“Cryptocurrency is the way of the future. We’re really excited about it,” Crabiel says. “We have had a tremendous amount of inquiries.” 

For the most part, people are using cryptocurrency to pay for their vacations (i.e., hotels and plane tickets) rather than using it to spend while on vacation (i.e., margaritas and paddle board excursions). Of course, these decentralized payment systems aren’t for everyone. 

If you’re considering cryptocurrency as you plan your next holiday, consider these pros and cons. 

Pro: No foreign exchange fees.

Cryptocurrency pays in the currency of the country where you purchase, and your transaction is settled within minutes. So if you’re traveling overseas, you don’t have to pay the foreign transaction fees your credit card charges, or calculate the exchange rate you’ll get converting dollars to Euros, or try to spend all those Euros you get at the ATM before you head home.

You do have to watch the cryptocurrency exchange rate, though. At the Bobby, for example, the exchange rate in the checkout email you are sent is good for 15 minutes. After that, it may fluctuate.  

Pro: You won’t get robbed.

Pickpockets, the scourge of vacationers everywhere, can’t grab your Bitcoin out of your backpack or when in line at the ATM. Many people feel that cryptocurrency is secure (it’s unlikely that account numbers will be hacked like traditional credit card numbers can be).

If your crypto is stored in an account accessed on your phone with a secure password, you’re probably safe. However, if you use a USB wallet that is stolen, you may be out of luck. Depending on the crypto exchange you use, you may not be able to dispute breaches if they happen. According to a 2021 survey by GamblersPick, reducing criminal activity was the reason 53 percent of respondents were interested in cryptocurrency. 

Pro: No frozen accounts.

You know the ones. You forgot to call your credit card company before you headed to Greece and then you arrived in Athens and your card was declined.

“With Bitcoin, there are no frozen accounts, and you don’t have to alert anyone,” says Savannah Bilbo, a consultant for Pelicoin, a crypto ATM network in the Gulf South. 

Pro: You can keep it on the down-low.

Maybe you want to plan a surprise getaway for your sweetie. Or maybe you just don’t like that your transactions with traditional financial institutions can be public.

“Many hackers and thieves like to take advantage of travelers that are on vacation, but cryptocurrency keeps traveling information private, keeping your business your own,” says Jim Pendergast, a senior vice-president at AltLINE Sobanco, which has a partnership with Southern Bank Company.

Con: There’s no way to change your mind.

Unlike when you pay with a credit card, there are no refunds. At the Bobby, because you have a credit card holding your room, you can discuss your bill with staff before you actually check out and they can adjust as needed. But once you’ve paid with cryptocurrency, that’s that. 

Con: Cryptocurrency values fluctuate.

“If you bought $5,000 of Bitcoin at the beginning of your trip, you might end up losing a few hundred after a few weeks even without spending money,” says Ben Reynolds, CEO of Sure Dividend. Most folks who buy crypto like this volatility; it is part of what makes the possibility of big gains appealing. But if you are using it transactionally, you need to be sure you can cover your travel expenses regardless (or have a back-up method of payment). 

Con: No credit card bonus rewards.

If you’re hooked on deciding which credit card to use to get the most cash back or points for your next vacation, crypto on holiday is probably not for you. 

Bilbo adds: “There are some credit card companies that reward you in more Bitcoin, but when spending Bitcoin, there are no cash-back or airline miles opportunities.” 

Cons: You’ll pay taxes.

Spending cryptocurrency is a taxable event, so you may have a tax liability when you use it. You’ll need to keep track of the cost basis (the value when you bought it) and may need a professional to help you calculate capital gains or losses as you would with other investments. TaxBit software can help you sort out the specifics. 

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