Currency fluctuations add as much as 10% in hidden costs to business travel
New statistics announced today by Caxton FX, the international business payments company, has revealed that business travel costs UK companies as much as 10% extra in hidden expenses due to currency fluctuations. Last year, this equated to an average of over £300 per business trip.
The findings by Caxton FX have been put together from the use of their international pre-paid business currency cards at the 25 most frequented destinations in 2017. During this time there were over 5 million transactions using 14 different currencies.
According to the figures, there was an average 7% fluctuation in the value of the pound across all these currencies. The most volatile currency versus the pound was the Ukrainian Hryvnia with a 10% fluctuation and the most stable was Singapore Dollar at just 2%.
“It’s hard to predict currency fluctuations, especially in today’s volatile economic and political climate. However, it’s still important to analyze their impact on business travel costs,” said Rupert Lee-Browne, CEO of Caxton FX. “When you apply the average currency variation across major currencies of 7%, it may seem like a small addition to the average cost of a business trip. Consider how many UK businessmen and women take multiple trips throughout the year, however, and this quickly translates into a significant amount of money.”
Caxton’s business customers made an average of five transactions a day, with an average individual transaction value of £175.96. With Research Gate estimating the average length of a business trip at 4.5 days, this suggests the average cost of a business trip for UK companies is over £4,000. However, in 2017 this cost could vary by as much as £304 per trip.
The research also revealed the most expensive destinations by average transaction cost. Dubai (£474.80) and Catania (£350.60) were followed closely by Abu Dhabi (£313.40). The most cost-effective destinations were Singapore (£51.50), Los Angeles (£71.50) and Amsterdam (£77).
Lee-Browne continued: “With international business travel now seen as the norm, companies need to be far more aware of hidden costs. Currency fluctuations can turn what appears on paper a low-cost trip into an expensive one very quickly. Companies need to plan ahead and work with experts to help them manage these costs. Our research demonstrates the savings to be made with the right risk management systems in place”.