Asia - Travelex currency exchange - a warning

I went to Manila last week, and since I hadn't been for a while I didn't want to trust my memory that there would be working ATMs on arrival (there were, as it happens).

So I changed enough HK$ to Philippine Pesos to get me to the hotel at the Travelex counter at HK Airport.

The rate I was given was 1 PHP = 0.1665 HKD
(independent of amount - no transaction fee)

Subsequently I took cash from an ATM in Manila using my HSBC ATM card. The rate I got was: 1 PHP = 0.1520 HKD
(including a HKD 20 transaction fee - it would have been 0.1420 without the fee)

And I used my Citibank credit card and the rate was 1 PHP = 0.1436 HKD
(no transaction fee)

Having checked this further I find that the Travelex rates are available on their website... for Euro, Sterling and USD the rate is about where you would expect: 4-5% worse than the interbank rate. But for other currencies using today's rates the figures are:
AUD 6.3%
SGD 7%
TWD 8.7%
THB 10%
PHP 17.9%

This is daylight robbery! It is simply not possible to argue that there is some inherent risk of currency fluctuation - in the last 6 months the difference beteen the highest and lowest HKD/EUR rates is 19%, but the fluctuation of the PHP against the HKD over that period is 5%.

The moral of the story is "caveat emptor". And don't use Travelex for Asian currencies.

[This message has been edited by christep (edited Jan 10, 2004).]

The problem is that you're exchanging a not-too-popular currency (the Ph. Peso) at a different country. They have to hold those notes in Hong Kong, with a not-too-insignificant chance of devaluation all the time. To make a profit, these currency-exchange places basically have to charge the large fees.

Definitely change your Pesos at a regular bank in the city, or take a chance in Manila, or exchange to US Dollars (which you can probably get better rates in Manila than HK$).

Your argument seems to be based on selling PHP, not buying it. The devaluation arguemnt simply doesn't stack up, as my original post showed.

Moreover, I think the Philippines is one of the top five destinations from HK in terms of seats flying each day and Filipinos are also by far the biggest expatriate group in Hong Kong.

The buy/sell ratio at Airports, hotels and some banks (usually American banks) purposely sets them appart for profit only. And ironically these are being done in a similar way that concessions are more expensive inside, say, a movie theatre, at a sporting event or otherwise. They exist by forcing customers without a choice and use the monopolization theory in economics to profit from it. It is illegal, but no one complains, even though people lose $760 HKD per $7600 HKD. One has to use their own judgement and look for ways around it, because they do exist.

The best place to get foreign currency (not including the US Dollar in the US) is inside the host country for that currency. Best place for the US Dollar is *before* coming to the US. So, get PHP Pesos in the Phillipines. HKD in Hong Kong. Thai Baht (or nearly any currency) in Thailand. Canadian Dollar in Canada. And do it away from the airports and hotels.

Some use credit cards or bank cards for cash, but in fact...those rip you off as well and are dangerous for theft. Best bet is cash transactions at banks inside host countries (outside the US) and a select few currency exchange places, in which you cana ctually negotiate better rates or they get none, away from airports.

Some banks that offer good rates and charge an illegal fee (in Australia, they charge $5 AUS; Hong Kong they charge $30 HKD, etc., USA is the worst and charge the 'Enron Fee' of $10 USD....all should be arrested), shop around. A buck here and there is a lot better than $100 USD stripped per $1000 USD. And a credit card that no one can pay off will take the most in interest rates and fees later on.

Travellers checks are great too, so long as one can get them free. Some banks offer them free if you have a large number of $$ in the bank or are with a certain account/scheme. AMEX Travellers Checks are good, but *do not* use AMEX Travel Centres. They also seperate the buy/sell ratio like airports and hotels....worse than hotels.

That's my take.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by christep:
Your argument seems to be based on selling PHP, not buying it. The devaluation arguemnt simply doesn't stack up, as my original post showed.</font>

It's about the risk of devaluation. It doesn't necessarily have to do with past 6 months performance. If the companies think that there's a chance of devaluation in the future, it doesn't matter how stable the Ph. Peso was.

<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Moreover, I think the Philippines is one of the top five destinations from HK in terms of seats flying each day and Filipinos are also by far the biggest expatriate group in Hong Kong. </font>

The expatriates don't change money at the airport. They can do it privately within their group, or do it via various monetary service firms (I believe they are more than a few at Worldwide Plaza in Central). And local Hong Kong people know better not to change money at the airport. They usually do it at regular banks.

Edit: Just want to add that I am not saying what Travelex is doing isn't highway robbery, because it is.

[This message has been edited by rkkwan (edited Jan 12, 2004).]

From memory, it's not just Travelex here in HK. Pretty sure I got a bid/offer spread something like 11/13 for GBP/HKD in their LHR branch a year or so back. As someone who works in (albeit wholesale) finance, where I can now see a rate for me of 14.328/14.333, it's particularly galling...
As a slightly off topic subject, I remember a friend in the UK a few years ago (pre EUR) wanted to buy a place in Spain and had to wire funds to a Spanish bank. Was cheaper for him to wire GBP to me in HK, change from GBP to HKD to ESP (all in my HSBC multi-currency account) then wire the funds direct to the bank in Spain, rather then him do it directly through his high street bank (which ironically was Midland ie part of HSBC). The UK banks sit on a very comfortable margin...

I only EVER convert aprox 50USD/50EUR (argh, so much for being on the same value) to local. I will NEVER EVER EVER convert more from these rip off currency converters. Everywhere in Asia you can use an ATM machine now at airports. I normally try to come back with 50USD or so in the local currency and dump any non essential coins at the airport (gum, magazines, etc)...

i never use travelex. Whenever i see the rates i get sick. They're worse than those currency exchange stalls you see all over the place

well when travelling on company business, i dont care what the rate is, as always claim in HKD at the travelex underlying rate.. so not out of pocket. so it must be people like me keeping them in business.

Might not be too good for your company though, GK..... ;)

Travelex have a rental deal will HKIA that gives them almost exclusive rights in the terminal building. This means that they have to pay a very high rental and can ask whatever exchange rate they want.
The HSBC and Citibank ATM's are located outside the main terminal building toward the ground transportation centre. Not easy to find at first....

Moneychangers accross the board are a bad deal in Hong Kong. If you have large amounts of cash to deal with, go elsewhere. OTOH if it is RMB, then of course HKG is the place to be. :cool:

i never use travelex. Whenever i see the rates i get sick. They're worse than those currency exchange stalls you see all over the place
I could not get my ATM card to work in Nagoya Japan Spring 2005. Got pretty desperate over the weekend, but found a bank on Monday....very fair exchange rate as I recall.

The HSBC and Citibank ATM's are located outside the main terminal building toward the ground transportation centre. Not easy to find at first....

Everything's under the same roof in Hong Kong. Anyways, Bank of China has a branch in the departure level, along with many more ATMs from various bank. In the arrivals hall, there's also ATMs of Standard Chartered, another large regional bank.

Unlike Japan, basically all Hong Kong ATMs will take Cirrus cards. (Probably Plus as well). It really isn't a problem getting cash at at ATM in Hong Kong with a US-bank card.