Just You launches travel trade solo experience

Just You launches travel trade solo experience

Friday, 21 October 2016 14:00

Just You h...

Spontaneous people are happier according to Snaptrip survey

Spontaneous people are happier according…

Friday, 21 October 2016 11:00

Spontaneous people are often believed to lead more exciting or glamorous lifestyles and a new study has confirmed that they are happier in all aspects of their lives.

Top Brighton attractions on Combi-Saver tickets for half term

Top Brighton attractions on Combi-Saver …

Friday, 21 October 2016 09:00

Visitors to Brighton this October half term can save up to 20% on its top three paid-for attractions with combination tickets now available for British Airways i360, SEA LIFE Brighton...

Free cabin upgrades with Cosmos Tours

Free cabin upgrades with Cosmos Tours

Thursday, 20 October 2016 14:00

There still’s time for agents to book a Croisieurope river cruise for their customers with a free cabin upgrade on a range of river cruises throughout Europe, when booked with...

Last minute autumn breaks available at Haven

Last minute autumn breaks available at H…

Thursday, 20 October 2016 11:00

Agents can still give their customers a last minute family break this autumn from £99 when booking a Haven holiday between now and November 5.

Skiers urged to head east for best piste costs reveals new report

Skiers urged to head east for best piste…

Thursday, 20 October 2016 08:00

Cash-conscious skiers can avoid the slippery slope of higher prices for their annual downhill trip by heading to ski resorts in Eastern Europe.

Design an anniversary poster for DFDS competition

Design an anniversary poster for DFDS co…

Wednesday, 19 October 2016 14:00

Ferry operator, DFDS, is putting out a call to professional and amateur artists to create a poster that will be used in their 150th anniversary celebrations this year.

Savings on worldwide adventures with Explore

Savings on worldwide adventures with Exp…

Wednesday, 19 October 2016 11:00

Explore has launched a new collection of worldwide adventures with a launch offer of up to 10% discount on all new trips booked by November 7.

New route to Seattle makes it one to watch for 2017

New route to Seattle makes it one to wat…

Wednesday, 19 October 2016 09:12

Seattle is expected to be one of the fastest growing US destinations for UK travellers next year with a Virgin Atlantic direct non-stop daily flight launching March 2017, new hotel...

Air Transat launches 2017 programme with increased connections across Canada

Air Transat launches 2017 programme with…

Tuesday, 18 October 2016 14:04

Air Transat has expanded its programme of flights from the UK to Canada with increased capacity and connections for travel in 2017.

Oceania Cruises reduces single supplement fares

Oceania Cruises reduces single supplemen…

Tuesday, 18 October 2016 14:02

Oceania Cruises has launched a reduced single supplement promotion for solo travellers, with guests offered single supplements fares from 25% on seven itineraries, booked before December 31.

Mall of America welcomes arrival of MythBusters

Mall of America welcomes arrival of Myth…

Tuesday, 18 October 2016 14:00

Running throughout autumn until January 15, 2017, visitors can ignite their curiosity and discover whether they can really huff and puff to blow a house down; if running in the...

Emirates to launch new daily service to Fort Lauderdale

Emirates to launch new daily service to …

Monday, 17 October 2016 11:00

Emirates has announced that it will launch a daily service between Dubai and Fort Lauderdale-Hollywood International Airport, on December 15, serving the South Florida area, including Fort Lauderdale, Miami and...

New tours in UK & Europe from Back-Roads Touring

New tours in UK & Europe from Back-R…

Monday, 17 October 2016 08:42

Small group tour specialist Back-Roads Touring has launched its summer 2017 brochure to reveal a unique line up of new itineraries in Switzerland, Scandinavia, the Baltics, France, Iberia and Russia.

Star studded cruise line up from CMV in 2017

Star studded cruise line up from CMV in …

Friday, 14 October 2016 10:16

Cruise & Maritime Voyages has announced five star-studded cruises for 2017 following the arrival of its new main brochure.

Non-stop flights to Manchester from SIA

Non-stop flights to Manchester from SIA

Friday, 14 October 2016 10:11

Singapore Airlines will fly non-stop between Singapore and Manchester from October 30 as part of its northern winter schedule.

Squeezed incomes, cuts in corporate travel budgets and flat economic growth have all created a perfect storm for the travel industry since 2008. However, the industry has worked hard to adapt, cut costs, re-shape services and build online offerings. Positive results from industry leaders such as TUI and Thomas Cook point to a resurgent industry and one that is leaner and better able to profit from the improved economic headwinds.


However, while the market has improved, consumer incomes remain squeezed and both retail and business customers are far more price-sensitive, so maximising profits and driving down costs remains vital. I believe that 2014 will see currency hedging and trading rising up the agenda for travel businesses, which are more exposed than many companies to the volatility of foreign exchange movements.

Over the past 12 months, we have seen record highs in the Renminbi against the US Dollar for example, and two year highs in Sterling. Global fluctuations have been driven in part by on-going economic instability and concerns about when the US will end its Quantitative Easing programme. Large swings have also occurred in response to economic data and government announcements and as confidence remains fragile, we see this volatility remaining a feature for 2014.

As travel firms deal in many different currencies, making payments to suppliers overseas including hotels and airlines, fluctuating rates can really hit the bottom line, but there are also opportunities in currency markets to maximise return and reduce foreign costs in real terms.

Even seemingly mundane tasks such as setting prices and managing payment in foreign currencies can be fraught with challenges for travel firms. However, there are also opportunities and with the right strategy, foreign currency transactions can be far more than an administrative burden – they can act as a profit accelerator, with a managed currency portfolio used to increase the competitiveness of travel companies’ pricing and ultimately improve the bottom line in an extremely competitive margin environment.

We are speaking to an increasing number of travel firms that are looking to take a more proactive and sophisticated approach to managing currency risk. Most are looking to achieve this by hedging forecasted foreign currency expenditure, particularly over the peak travel season of the summer months, rather than trying to second guess the unpredictable foreign exchange markets and leaving it to the exchange rate on the day. A portfolio approach involving spot purchases, forward obligations and option products is fast becoming the most popular way of managing currency risk.

Hedging also allows some flexibility in the amount that has to be converted into foreign currency to match payments. Using a portfolio approach will mean that if certain contracts from abroad do not materialise or a particular season proves to be slightly disappointing, it’s easier to manage the shortfall. It means businesses have the confidence to leave a small amount to discretion and may only hedge 50% of their expected expenditure.  

Currency is a business risk inherent to the travel industry and managing it effectively should be a fundamental function within the finance department. There are solutions available to minimise the risk of currency exposure and accelerate profitability by sending currency at beneficial rates, as well as offering the flexibility to have some discretion about the amount of currency you choose to buy.

With the right currency management solutions companies can turn the curse of trading in multiple currencies into a benefit.

More information can be found at: www.investec.co.uk/treasury

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