[Question] Price on quote subject to exchange rate???

[Straight&narrow]

Hi all

In March this year, we were quoted by a tour operator for a tour end September. There were a few line items and two of them had asterisk next to them and at the bottom the legend:
*Subject to change
Price based on an exchange rate of € 1.00 = R17.15
The money was payable in 3 instalments and the balance was due by mid-August.
The final account was calculated at € 1.00 = R16.20 even though the exchange rate was at that stage R15.30.
Quote March
Tour Price R36 290 = € 2116.03
Airport Tax R1277.23 =€ 74.47
Final Account
Tour Price R35 190 = € 2172.22
Airport Tax R1300 = € 80.25
My argument and question is:
If it was the other way around we should have paid for the increase in the exchange rate. Are they allowed to change their quoted price to accommodate the drop in the exchange rate? They claim they don't have to disclose their actual expenditure and now keep my airline ticket till the full amount has been paid. I don't have a choice but to pay to get my application for my visa in on time.

I don't want to just leave it, I feel they should be brought to book OR am I just being penny wise and pound fullish? My loss is about R3900, 10% of the cost of the tour.

Thank you for your time to respond!!!

[AndyD]

Hang on, are you paying the tour operator in Rands or Euros? I'm confused. If the quote was calculated on an exchange rate of € 1.00 = R17.15 and the invoice on an exchange rate of € 1.00 = R16.20 how can the invoice price be more than the quote?

[HR Solutions]

Because when u originally booked everything was secured at the relevant exchange rate - u were just given the opportunity to pay it off.

[Blurock]

It is always a gamble when dealing in foreign exchange. When you import something or pay for expenses in a foreign country, the price in your currency is only valid for today, unless specifically agreed to a specific period. That is why importers take forward cover to fix their exchange rate at today's price.

[Justloadit]

Another one to remember, is that the exchange rate quoted by the news and websites, is not what the bank's charge. When you buy you pay at least 0.5% more in Rands, and when you sell you receive at least 0.5% less in Rands that the exchange rate quoted by the news and websites. The banks also charge you a service fee prorata to the value of the transaction.

[Straight&narrow]

Thanks for the replies....

I'm paying in rands Andy, so in my mind, I should pay the initial price in euro at the reduced exchange rate just like you said. Sure if they took forward cover then the R16.20 is not negotiable but they don't want to give me proof. Am I entitle to proof?

It just doesn't feel right!!!

[HR Solutions]

They are paying in the foreign currency at the exchange rate at the time and securing your booking

[Greig Whitton]

I'm paying in rands Andy, so in my mind, I should pay the initial price in euro at the reduced exchange rate just like you said. Sure if they took forward cover then the R16.20 is not negotiable but they don't want to give me proof. Am I entitle to proof?

It just doesn't feel right!!!

The reason why it doesn't feel right is probably because of this ...

Because when u originally booked everything was secured at the relevant exchange rate - u were just given the opportunity to pay it off.

If you had paid in full when you booked, only to discover later that the Rand had strengthened and that you could have saved some money by not booking so early, then this would be a non-issue. You might have been a bit miffed, but you would have never blamed your tour operator for the exchange rate fluctuation.

The only puzzling bit here is that the tour operator's final account was based on the current exchange rate rather than the original rate. I assume that this was an administrative error on their part, but bears clarification. Had they issued a final account based on the original rate then, again, this would be a non-issue.

[Dave A]

They are paying in the foreign currency at the exchange rate at the time and securing your booking

I actually have my reservations about that.

There may be a deposit in play, but I certainly doubt the full fee would be paid ahead of receiving the money from the client.

I suspect that only a travel agent is going to be able to give us a full insight into this...

[HR Solutions]

I actually have my reservations about that.

If you book anything overseas you have to pay for it immediately, including flights. If it is not paid immediately the price then fluctuates according to exchange rates etc etc. If you don't book it immediately you stand a chance of losing it to your client, if you are a travel agent. Every time I travel I ask my travel agent for quotes etc - I then have 24 hours to confirm and pay for it. (You can pay them off if you have that arrangement with them). Nowhere on this planet can prices remain the same if not booked immediately. And yes they are paying in foreign currency if you are paying the agent in rands and they are paying for example a tour in rome or Amsterdam or anywhere in Europe in this case.

Even if you book things direct and pay with your credit card you are paying in the currency of the country you are going to.

I certainly doubt the full fee would be paid ahead of receiving the money from the client.

I agree with that, but it sounds like a payment plan was arranged here in which case you have to do the booking/payment at some time.