Money & Shopping
The Lao currency is the kip, which is now newly convertible at banks in neighbouring countries due to the establishment of the Lao stock market in 2011. Current exchange rates can be calculated here . It is possible to exchange to and from kip at Vientiane airport (Opens at 09:00) and there is a Lao bank that exchanges at the Nong Khai-Vientiane land border (straight and right of the Visa on Arrival desk).
The largest note is 100,000 kip and rather uncommon (although you may get some from the ATM). Notes in common circulation are 500, 1,000, 2,000, 5,000, 10,000, 20,000 and 50,000 kip. Withdrawing the maximum of 1,000,000 kip from an ATM could result in 20 50,000 kip notes. This makes carrying large quantities of kip quite inconvenient. Although less common than in the past, USD will sometimes be accepted, although usually at about 5-10% less than the official rate. Thai baht may be accepted in many areas near the border, notably Vientiane. Beware though, that in remote places only kip is accepted and no ATMs will be available, so plan ahead.
More touristy places and banks are also accept the euro. So if you're from one of the euro countries, just bring some just in case. This could be cheaper than changing your euros into baht or USD and then into kip.
There are many ATMs in Vientiane, and they have also appeared in other major cities including Luang Prabang, Vang Vieng, Savannakhet, Tha Khaek, Pakse and Luang Namtha. BCEL, the largest bank, accepts both Visa/Cirrus and MasterCard/Maestro, but surcharges of USD1-2 often apply.
Many banks, travel agents and guest houses will allow you to take out cash from a credit card as a cash advance. This usually occurs by withdrawing the money in USD from the card as a cash advance; the card issuer will usually charge a fee (about 3%), the Lao bank involved will charge about 3%, and then the agent providing the cash advance might (or might not) charge another 3%, and then the amount is converted from USD to kip at an unfavourable rate, costing another 5% or so. Thus, these transactions are much more expensive than the typical charge for withdrawing cash from ATMs in other countries. Euros get pretty bad rates compared to USD when exchanged in Laos, getting a cash advance in USD and changing it to kips might actually save money compared to bringing euros with you to Laos. Expats living in Vientiane routinely get cash from ATMs in Nong Khai or Udon Thani (Thailand), where the maximum per transaction is mostly 20,000 baht, or ten times what you'll get in Laos.
The use of both ATMs and credit cards in banks is subject to computer operation, staff computer skills, power cuts, telephone network breakdowns, holidays, etc. A few travellers have been forced out of the country prematurely as they couldn't withdraw funds to continue their travels. Always bring some cash. Changing money can be next to impossible outside major towns.
Banks give good rates, and private exchange booths are common in the major tourist areas.
Many shops start an hour's lunch break at noon, and some maintain the (now abolished) official French two-hour break. Nearly everything is closed on Sundays, except restaurants and many shops.
The basic Lao approach towards tourists is the "milking cow" approach. They will take whatever tourists are willing to pay. Lately, prices have exceeded those of neighbouring Thailand and Vietnam, though the standards are lower. Hotels are of lower quality, and priced higher compared to Thailand or Cambodia, the dishes in restaurants are smaller, and the tuk-tuks more of a rip-off. It's worse in the tourist centres of Luang Prabang and Vang Vieng than in the smaller towns and villages.
A budget of USD40 a day is a good rule of thumb, though it's possible to get by on less. A basic room with shared bath can be as little as USD6 in Vang Vieng or as much as USD10-15 in Vientiane or Luang Prabang. Meals are usually under USD5 for even the most elaborate Lao, Thai or Vietnamese dishes (Western food is more expensive), and plain local dishes cost USD2-3. A local bus from Vientiane to Vang Vieng costs USD5; a VIP bus from Vientiane to Luang Prabang costs 160,000 kip; the slow boat from Luang Prabang to Huay Xai costs USD25.
Unlike in Thailand, access to temples in Luang Prabang is not free, but typically costs 10,000 kip.
Laos is more expensive than Thailand and Cambodia as most goods, petrol, and food is imported from Thailand and Vietnam, and because most people have the bad habit (especially tuk-tuk drivers) of considering USD1 as 10,000 kip, where in fact it's about 7,700 kip for USD1. Remember this in bargaining with tuk-tuk drivers and when shopping in markets.
2nd opinion: Outside of tourist centres, rooms can be found for USD2.50, and even at Si Phan Don for USD5/night. Large noodle soups are around USD2, and a typical price for large bottles of Beerlao is 10,000 kip.
Excluding transport costs, living on USD15/day isn't hard.
What to buy
Typical Lao dresses in cheap machine-made fabric can be made to order. Expect to pay around USD5 for the fabric and USD2 for labour. Handmade Lao silk is one of the most attractive things to buy. The talat sao (Morning Market) in Vientiane has dozens of small shops selling 100% handmade silk scarves or wall hangings from USD5 upwards depending on quality, intricacy of design and size. Beware cheap synthetic fabrics sold as silk imported from China and Vietnam. Be careful also of "antique silk". There is very little available, but new fabric can be made to look old and worn. Still attractive, but don't pay more than USD30-50. In markets, always bargain: it is expected, but keep smiling…