When Being Too Expensive is the Point: The Costs and Benefits of Price Gouging Tourists

Price Gouging Tourists in Dubrovnik

I first saw pictures of the seaside dream city that is Dubrovnik, Croatia, while taking a class on Balkan history at the University of Michigan. At the time, Croatia was a newly independent country, and most people only knew its name because of its role in the ugly and tragic wars that followed the breakup of Yugoslavia.

But there, tucked between lectures on nationalism and ethnic conflict, were photos of Dubrovnik: impossibly thick stone walls rising straight out of a sparkling blue sea, a quiet maze of limestone streets, architecture that looked like it had been designed by someone who had read too many fairy tales and decided restraint was overrated.

I decided, very confidently, that I would go to Dubrovnik.

Not immediately, of course. Life happened. I finished school. I had kids. I became a professor. But none of that erased the plan. Dubrovnik just sat there in my mental travel queue, patiently waiting its turn.

And then Game of Thrones happened.

Croatia had already been quietly building a reputation as a fantastic destination, but those sweeping shots of King’s Landing—also known as Dubrovnik—introduced the city to a much larger audience. Suddenly, Dubrovnik wasn’t just a beautiful historic city on the Adriatic. It was the place to go.

And the people came.

In waves. In hordes. In cruise ships so large they seemed capable of blotting out the sun. Thousands of sunburned, camera-wielding, aggressively enthusiastic day-trippers poured into a city that was never designed to host them all at once.

Dubrovnik was overwhelmed. And to its credit, it responded with something that looks a lot like good economic policy.

There was simply too much demand for a very limited supply of space, history, and atmosphere. When demand wildly outstrips supply, economists will tell you prices should rise. The goal isn’t subtle: raise prices until enough people decide to go somewhere else.

And Dubrovnik did exactly that.

Walking the city walls in high season now costs €40 per person. Forty. Euros. That’s not a ticket; that’s a commitment. That’s the price you charge when you know some people will still line up anyway.

Here’s the thing, though: both sides of that equation matter to me. A destination that is packed wall-to-wall with tourists is less valuable to me than one where I can actually breathe. Add a price tag that makes me audibly whistle when I look it up, and I become one of the people who quietly crosses Dubrovnik off the list and starts googling “places that look like Dubrovnik but are less famous.”

That makes me sad.

But it also makes sense.

This is what Dubrovnik needs. It is a victim of its own success, and pricing people out is how it protects itself. I respect that. I even understand it.

And that’s exactly why this story isn’t really about Dubrovnik at all.

Thailand: Pricing the Ladder You Climbed Up On

Thailand is different.

Not just as a destination, but as a gateway. A training ground.

For decades, Thailand played a very specific and very important role in global travel culture. It wasn’t just beautiful (though it absolutely is). It wasn’t just interesting (it remains endlessly so). Thailand was accessible.

It was forgiving.

It was cheap enough that you could stay for weeks or months without hemorrhaging money every time you bought lunch.

And that mattered.

Thailand was where a whole generation of travelers learned how to travel.

If you messed up your visa, someone explained it to you. Or just ignored the mistake.

If you took the wrong bus, it still got you somewhere interesting. And backtracking to get where you wanted to go was cheap.

If you were broke, tired, overwhelmed, or culturally clumsy, Thailand didn’t punish you for it.

It gave you room to figure things out.

Budget backpackers weren’t just passing through Thailand on whirlwind “see it all in ten days” trips. They stayed. They came back. They learned neighborhoods. They developed routines. They returned home and told everyone they knew that Thailand was the place to go.

They were repeat visitors.

They were long-stay spenders.

They were unpaid ambassadors.

Before social media algorithms decided what was “hot,” Thailand’s tourism engine ran on word of mouth, message boards, dog-eared Lonely Planets, and the kind of obsessive travel storytelling that only happens when people feel welcomed rather than extracted from.

Thailand didn’t just attract travelers.

It trained them.

And now that relationship is changing.

Costs are rising. Fees are rising. Regulations are tightening. Budget accommodations are disappearing or upgrading themselves into something shinier—and pricier. Long-stay visas are more complex. Short-term stays feel more transactional. A simple border run to renew your visa is a thing of the past.

None of this is irrational. Thailand is more developed. Infrastructure costs money. Popular places require management. And Thailand has every right to want more revenue from tourism, and both make and enforce its own regulations.

But here’s the problem.

When Thailand prices out ultra-budget travelers, tourism doesn’t vanish.

It moves.

To Vietnam.

To Laos.

To Cambodia.

Places that now play the role Thailand once did: affordable, flexible, forgiving. Places where new travelers cut their teeth, learn how to navigate discomfort, and form the emotional bonds that turn a country into a lifelong favorite rather than a one-time stop.

Thailand may have believed it would seamlessly price out the budget travelers and replace them with higher-spending tourists. But it hasn’t worked out that way. Thailand’s tourism industry has been losing ground for several years now.

This is the central tension.

By optimizing revenue in the present, destinations risk hollowing out the very feeder system that made them famous in the first place. The broke backpacker of today is often the devoted return visitor of tomorrow—older, wealthier, and eager to come back with time, money, and gratitude.

At least for now, it is hard to see that the benefits of Thailand’s new approach to tourism are outweighing the costs.

Uzbekistan: Don’t Charge Like You’ve Already Made It

Where you pay the entrance fee to access Khiva's Old City

Uzbekistan feels like it’s standing at the edge of something big.

You can sense it. The infrastructure is improving. Tourism messaging is getting sharper. The Silk Road cities—Samarkand, Bukhara, Khiva—are finally getting the attention they’ve deserved for centuries. This should be Uzbekistan’s moment.

And yet, when we were there, it felt like we had stumbled into a secret.

We visited in summer—peak season in most hot, historic destinations—and places were nearly empty. We wandered Samarkand’s Registan, one of the most jaw-dropping urban spaces on the planet, and there were moments when it felt like it was just us and a few pigeons soaking up the heat. The same was true in Bukhara. In Khiva, we spent long stretches wandering the old city without crowds, without lines, without the sense that we were part of a tourist conveyor belt.

It was magical.

This is the phase most destinations dream about: world-class sights, minimal crowding, and travelers who are genuinely delighted just to be there.

And yet—already—the nickel-and-diming has begun.

In places like Khiva, it sometimes felt like you could spot a monument shimmering in the distance—golden brick, blue tile, centuries of history—and an official would materialize out of thin air to charge you 20,000 som for appreciating it. To be clear: 20,000 som isn’t much money. On paper, it’s trivial.

But that’s not the point.

It adds up. It fragments the experience. It turns wandering into accounting. It makes you hesitate before following your curiosity down a quiet alley or toward a half-hidden madrassa, because you’re no longer sure whether curiosity will cost you another fee.

And sometimes the fees actively make the experience worse. In Khiva, access along the city walls is blocked in places—not for safety, but to funnel visitors toward separate ticketed sections. The result? A walk that’s less useful for photography, less fluid, and less enjoyable, all in service of squeezing a little more revenue out of a visitor base that… isn’t exactly overwhelming the place yet.

This strategy might make sense eventually.

Nepal adopted it after decades of global fame. Dubrovnik did it after drowning in cruise ship crowds. Thailand—arguably the most successful budget travel destination in modern history—is still trying to thread that needle without losing its soul (not to mention piles of tourist dollars).

Uzbekistan isn’t there yet.

It is extraordinary. It could become a top-tier global destination. But it hasn’t had time to build the emotional loyalty that carries a place through higher prices and tighter rules. Right now, it needs travelers to fall in love with it—to linger, to wander, to tell stories, to come back.

Charge too much, too early, and those travelers don’t disappear.

They reroute.

They go to Georgia.

To Armenia.

To places still in their generous, welcoming phase.

Uzbekistan doesn’t need to be free. It deserves revenue. It deserves preservation funding. But it also needs to remember where it is in the arc of becoming a great destination.

When demand is nowhere close to overwhelming supply, you shouldn’t crank up your prices.

You don’t price yourself like Dubrovnik when you’re still trying to become Dubrovnik.

The tragedy would be watching Uzbekistan’s rise stall—not because it wasn’t magnificent enough, but because it asked travelers to pay like they’d already arrived at the end of the story, long before the rest of the world had time to read the beginning.