In the busiest ever summer for outbound travellers from Britain, the atrocious rates offered by airport bureaux de change have been brought into sharp relief.
Research by The Independent shows that a passenger who changes £1,000 into a foreign currency at Gatwick, then immediately changes it back to sterling, will lose a minimum of £297 – enough cash to fly to America and back. The choice of this transaction was to illustrate the extremely wide “spread” between buying and selling rates. The exercise gives an indication of the profit margins applied at airports.
Most travellers realise that rates at UK airports are poorer than on the high street. But we can now show just how unfavourable they are.
Research was conducted using advertised rates at the main Moneycorp counter airside at Gatwick on Saturday. At the time, the midmarket rate for sterling against the euro was around €1.12. But £1 bought less than 95 euro cents.
Buying rates are also highly unfavourable, with Moneycorp asking €1.36 for each pound.
A passenger who exchanged £1,000 to euros and immediately switched back to sterling at these rates would lose £308 on the transaction – ending up with just £692.
For Australian dollars, the cost of the same notional transaction is £358.
The keenest rates are for US dollars, but even then the traveller’s £1,000 “investment” would lose £297 – more than the cost of a low-season return fare from Gatwick to New York.
“Exotic” currencies fare even worse. The Barbados dollar is locked to the US dollar at a rate of 2:1. But a traveller who opts for the island’s local currency would lose £385 on the transaction. For the South African rand, the loss is £372.
In central and eastern European destinations, local bureaux de change compete intensely, In Budapest, the “spread” between buying and selling rates is rarely more than 3 per cent, resulting in a loss of £30 in the £1,000 double transaction.
But at Gatwick, the cost of the same exercise is an astonishing £417 – more than the return fare for a flight from the airport
For transactions of less than £300, Moneycorp also levies a commission charge.
Rates at many other UK airports, and other exchange firms, are similarly unfavourable.
Airport bureaux de change have very high operating costs. They must maintain large stocks of a wide range of currencies and keep long hours. In addition, the airport owner extracts a substantial margin.
Far better rates are available for web customers who reserve online and pick up the currency at the airport. Moneycorp was offering €1.09 to £1 online, giving buyers 15 per cent more euros.
Pauline Maguire, head of retail at Moneycorp told The Independent: “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. An easy and more cost-effective way for customers to buy travel money is to preorder online and collect at the airport.”
