For British/AU/NZ/SA English, any sentence using the US 'transportation' also needs to accept transport. These countries have ministries and departments of 'transport'
No native speaker uses the term transportation. Transport should be accepted.
The most natural way to say this for many English speakers (at least in Australia) is 'What is the transport like here?' 'How is the transport/transportation here' sounds extremely stilted to me - I'd never say it in real life. My answer should be correct.
How does one travel around here? would express the question better in the U.S., but the words are different.
That's a different question with a different meaning. 'How is the transport' is a question about the quality of transport available: is it easy to travel, how good are the trains etc?