Getting the best rate for sterling can be a roll of the dice
Travellers buying their currencies at UK airports are being offered as little as 86 euro cents to the pound. Foreign exchange broker FairFx said this rate, from Moneycorp at Southampton Airport, is the worst at any airport bureau de change.
Nevertheless the average euro rate at airports is now less than one euro to the pound.
Chief Commercial Officer at FairFX James Hickman, says the fact that airport rates are so low – much worse even than at High Street banks – shows that the bureaux de change really are taking advantage of unsuspecting customers.
“In reality they are ripping off the customer, who is effectively captive as they have nowhere else to buy their money at an airport,” he says.
At most airports individual companies have a monopoly. They should be regulated as there is simply no justification for charging someone 14 per cent [the average margin between the tourist and money market rates] to change their pounds to euros,” he says.
That margin is as high as 26 per cent at Moneycorp’s Southampton Airport outlet.
Moneycorp’s retail director Pauline Maguire says: “The reason for our higher airport rates is the significant cost associated with operating there – from ground rent and additional security, to the cost of staffing the bureaux for customers on early and late flights.
“An easier and more cost-effective way for customers to buy travel money is to pre-order online and collect at the airport.”
No-one is forced to buy holiday money at the last moment at an airport. This potentially expensive experience can be avoided by:
• buying online, in advance, from the outlet of your choice be it a bank, the Post Office or other bureau de change
• if you have a good reason to pick up cash at an airport, order it online in advance and use the airport bureau de change as the pickup point
• consider spending abroad with a pre-pay travel money card, or a no-fee credit card marketed for travellers abroad.
For sheer convenience you may be tempted to use your bank debit card at foreign ATMs, but BEWARE equally steep charges.
Although it might actually be more beneficial to use that debit card for purchases as the daily rates fluctuate and you may well obtain a better rate of exchange.
One reason for the poor rates on offer to tourists has been the continued decline of the pound on the foreign exchange markets, in the wake of last year’s Brexit vote.
Although in the past 12 months it has only fallen, viz a viz the US Dollar, from $1.31 to $1.29, it has been a much steeper fall against the euro.
The pound was trading at approximately €1.3072 as voters headed to the polls on 23 June last year 2016.
In the past week sterling has hovered around €1.0850 euros, a dramatic 17 per cent slump since the referendum.
“There is certainly a possibility for euro/pound to hit parity,” said Forex.com.
You may also be interested in: