How Travel Agents Lose Money on FX (and What to Do About It)

Foreign Exchange: The Hidden Profit Leak for Travel Agents

If you work with international suppliers, earn commissions in foreign currencies, or hold balances in more than one currency, you’re already exposed to FX (foreign exchange) risk, whether you realise it or not. For many agencies, unmanaged FX costs run between 1% and 4% of every international transaction. On six figures’ worth of overseas bookings, that’s thousands lost each year.

These losses rarely show up as a single large line item in your accounting reports. Instead, they appear in small frequent amounts.. either in poor exchange rates, unnecessary conversion fees, and bad timing on currency conversions. Over time, they eat directly into your margin, and you might not even realize.

1. Paying Overseas Suppliers

Booking a hotel in Italy or a tour in Japan? Your client pays you in GBP or AUD, but your supplier invoices in EUR or JPY. If you pay from a standard business bank account, you’re probably getting the bank’s retail conversion rate, sometimes 2% to 4% worse than the market rate. On a £10,000 payment, that’s £200–£400 gone before the supplier even receives the funds.

How to fix it:

• Use a specialist FX provider or multi-currency payment platform such as Wise, Airwallex, OFX, or Corpay, which typically offer tighter spreads and lower fees than standard banks.

• Time your conversions to align with predictable supplier payment dates, not the day the invoice is due.
  
  

2. Receiving Commission in a Foreign Currency

Some hotel groups, bedbanks, and cruise lines pay commissions in EUR or USD. Without a plan for when and how you convert those funds, FX rate swings can quietly erode your earnings.

Example:
If you’re due €5,000 in commission and the EUR/GBP rate shifts from 0.87 to 0.84 before you convert, you’ve lost £150 purely from market movement.

How to fix it:

• Maintain a currency account in the currency you’re paid, so you control the conversion timing.

• Track key rates for your top currencies and set alerts to catch favourable moves.
  
  

3. Holding Multi-Currency Balances

Holding balances in multiple currencies can be efficient if you pay suppliers and receive income in the same currency. But without active management, you risk:

• Sitting on funds that lose value due to exchange rate shifts.

• Triggering extra conversion fees when moving funds between accounts.
  
  

How to fix it:

• Identify your “net currency position” — what you hold, what you owe, and what’s due in.

• Match incoming and outgoing flows in the same currency wherever possible.
  
  

4. Locking in Rates for Predictable Payments

For large or regular supplier payments, forward contracts let you lock in today’s exchange rate for a future date. This protects your margins from adverse market moves.

Example:
If you know you’ll need to pay €100,000 to European suppliers over the next six months, fixing the rate now can prevent a 3–5% movement from wiping out thousands of pounds in profit.

5. Accounting and Compliance Considerations

FX strategy isn’t just about rates, it’s also about accounting accuracy and regulatory compliance. Multi-currency accounts need to be reconciled correctly in your accounting system, with FX gains and losses properly recorded. If you operate in certain jurisdictions (e.g., U.S. entities with foreign accounts), you may have reporting obligations such as FBAR or FATCA. Work with an accountant who understands both FX and the travel industry so you don’t create hidden compliance risks.

How Antravia Helps

At Antravia, we’ve seen how unmanaged FX costs can quietly drain agency profits. We work with travel agents to:

• Set up multi-currency accounts and payment systems.

• Review supplier payment strategies to minimise bank spreads.

• Protect commission income from currency swings.

• Integrate FX tracking into your accounting process for full visibility.
  
  

You don’t need a full treasury department to take control of FX. You just need the right structure, tools, and oversight, from someone who understands the travel industry and how money moves through it.

Keep more of what you earn. Let’s make your FX work for you, not against you. Contact us.