The rise and fall of the $AUD: How currency fluctuations affect travel

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Travel by its very nature is an international business and as such, cannot help but be affected by international currency fluctuations. And as most international travel products are priced in USD – the strength or weakness of the Australian dollar at any particular time will determine how much bang you will get for your buck.


When you book travel, whether it is domestic or international, some of the time you will need to pay in full upfront, but there are occasions where the suppliers only require a percentage deposit for all other items; you then pay the full balance closer to the departure date. This is normally a preferred situation for clients – as you don’t have to pay for everything up front – allowing you some time to save for the balance (and of course any spending money).


However, recently we have all seen the Australian dollar weaken against the USD and this has affected the rate of exchange negatively.


Normally a slight variance in the strength of the Australian dollar against the USD is nothing to be concerned about. However, due to the consistent downward trend in the AUD over recent months, we are now being advised that suppliers are starting to reassess their pricing. This means we are getting sudden notifications that we need to pay immediately in full – or risk a change in the AUD amount on the bill. In addition to this, an increase in airfare taxes that are based in foreign currencies means that airfares are also starting to be impacted slightly.


What this means is that if the AUD continues to fall and you have an overseas booking that has its prices based in USD and the balance of the booking has not been paid in full – it may mean that you will be notified with the need to pay the balance immediately or risk the AUD balance amount being more than originally planned.


This will depend on when you made the booking, the strength of the AUD at that date and how the AUD is faring against the USD today. This amount will fluctuate daily/weekly/monthly and may even remain the same rate for days/weeks on end.


As a Travel Management Company, we cannot possibly predict fluctuations in the Australian Dollar against the USD, however if you have pre-booked accommodation, land tours, car hire or any other product where the prices are based in USD, we can only suggest it might be worthwhile to assess your individual situation and perhaps consider pre-paying for these items to save on exchange rates.


This information is a guide only and will depend on your individual situation.  In any case, it is wise to keep an eye on the AUD and take into consideration how the daily, weekly or general trend of our dollar may affect your travel plans.


If you need any further information on how this situation may affect you or any balances to be paid, please contact your Travel Manager and they will be able to help you calculate any payable balances at the time of your call.