Travel agent booking costs have risen by as much as 6 per cent or more, over the last few days as wholesale suppliers ramp up confirmed prices in response to international currency fluctuations.
Multiple suppliers, including Helloworld’s Viva Holidays, have upped their pricing from the agreed booking price in the last few days following the significant weakening of the Australian dollar in response to Trump’s travel tariffs.
In one instance, a travel agent saw the cost of the trip increase by nearly 6 per cent – the equivalent of $1,000 – after the supplier changed the price after their booking confirmation.
A lack of clarity around who is responsible for currency fluctuations
Who is responsible for currency fluctuations across the industry is not clear and appears to vary from supplier to supplier.
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Some suppliers, such as Viva Holidays, have passed on the change to the agent and their customer if payment for the trip is outstanding. Helloworld said in response to a Travel Weekly inquiry that in its T&Cs, some prices were based on dynamic rates that were not under its control. Other suppliers such as Bedsonline have actively told agents that they will not be passing on currency changes.
This issue becomes increasingly important given the geopolitical instability, which is prevalent right now, following US President Trump’s bid to reorder the world economy.
As highlighted by Travel Weekly yesterday, US hotel costs are expected to increase significantly due to the tariff changes.
One agent took to socials, claiming they were “horrified” to discover that every single one of the trips they have booked with a supplier has increased by hundreds of dollars.
“I have always told my client the difference between us and the internet is no currency fluctuation.”
Another agent told Travel Weekly that they were well aware that the agent was responsible for currency fluctuations and that it is the responsibility of the agent to communicate this with the client.
“Part of being a business owner is reviewing the terms and conditions, so you know what you are liable for,” they said.
Another industry insider said the truth was somewhat of a grey area with many suppliers deliberately hiding or not making it clear that the agent is responsible for currency fluctuations.
“It also doesn’t seem fair that if the currency worsens, then the cost falls to the agent, but if it improves the agent does not receive money back,” they said.
How do currency increases currently work?
Most wholesalers based in Australia usually buy the product – be it a hotel or a trip – in local currency and then sell it to travel agents in Australian dollars. They usually allow a buffer of about 3-4 per cent to allow for currency fluctuations. However, due to the recent volatility in the economic market, in many instances, prices have fluctuated well beyond this range.
If it does fluctuate above and beyond the range it is unclear as to whether it is the duty of the wholesaler to absorb the cost, or the client.
“It is the job of the wholesaler to manage their currency risks,” one insider said.
Either way, with a number of agencies shocked by the increase, it seems clarity is needed.
“I thought once the deposit was paid, that was that,” an agent said.
Helloworld declined to comment.
Contact sofia@travelweekly.com.au if you have insight.
