Foreign transaction fees are what banks will charge a customer, around 2-5%, for converting into the local currency. Ouch. Suddenly, that hotel room is not quite a bargain.
But, you can fight back. Many credit cards waive foreign transaction fees, but you have to look closely. For example, my United MileagePlus Explorer Card charges these fees, while my Chase Hyatt Card does not. For a list of cards that do not charge fees, check out this site.