Airport Currency Exchanges Charge Shockingly Huge Rate to Holidaymakers
In news that comes as a major surprise to most people, British airports are estimated to earn as much as £100 million every year thanks to their dealings with currency exchange companies.
In fact, airport bureaux de change are now understood to have been taking advantage of customers for a long time by selling currencies at up to 26% above the going rate. It is no wonder that airports in the UK have seen their revenues from rent increase by 20% over the past couple of years alone.
Telegraph Travel pointed out in October that while the pound was pegged at the euro’ value at a few airport exchange desks, London Southend’s Moneycorp was selling £1 for less than €1.
While the pound has strengthened, Moneycorp was changing £1 for offering €1.15.
Martin Lewis, well known for his consumer awareness site MoneySavingExpert.com gave the example of Moneycorp branches at Gatwick Airport that bought pounds at 1.35 euros and sold them at a mere 97 cents.
It’s very clear to see that people who exchange money at British airports get short changed because they end up paying rates 26% higher than what the market offers. FairFX CEO Ian Strafford-Taylor said that its shocking that airports take such undue advantage of their captive audience comprising not just of vacationers but also corporate travellers.
The Times had also released the results of a study commissioned by it which indicated that there was a variation of airport currency rates were approximately 13% higher than market rates over a period of three months. The Times report also delved into the profits generated by airports in the UK as a result of their dealings with currency exchange companies. Heathrow and Gatwick collectively brought in £76 million in 2015 as rental income from bureau de change operators.
Travelex outlets had generated £53 million for Heathrow during this period.
The other important airports in the UK, namely Bristol, Manchester, and Stansted, collectively earned £25 million as rental income from foreign exchange operators.
The airports have countered by pointing out that foreign exchange companies have to factor in higher costs at airports because of rent and increased staffing requirements. Airport money exchange counters are staffed all day and they offer a higher level of service than high street forex operators. They maintain holdings of many more currencies than high street stores do, and they also keep very high volumes with them.
Mark Horgan, chief executive of leading foreign exchange company Moneycorp said that the company earned very little from its airport operations since it had to face very big rent bills. Therefore, its airport business wasn’t a large profit centre for it. Tracy Bownes, retail director of the same company echoed the same lines, stating that the company had to maintain high levels of staffing in order to provide the desired level of service to customers at any time of the day or night.
A Heathrow spokesperson said that Travelex provided extremely competitive rates, even though all the evidence points to the contrary. There is however, one exception.
Passengers who wish to get the best possible exchange rates from currency conversion companies are advised to place their orders prior to travelling, using the internet to do so, and to collect the funds at the airport just before they travel. As a matter of fact, more and more travellers are opting to do this, so much so that half of all money transactions at airport counters happen this way. The rates offered for online reserve and collect are extremely competitive.