The Travel Industry were handed some harsh lessons in 2020, as the economic mire from the coronavirus pandemic manifested on company balance sheets. Covid-19’s effect on international business has been profound. For the global travel and tourism market, there has been enormous disruption. Airlines have faced mass cancellations and refunds, while hotel bookings between hoteliers and travel companies have also been withdrawn. As the trajectory of the coronavirus outbreak continues, travel and tourism remain largely at a standstill. With border closures and quarantine measures still in place, the World Travel and Tourism Council estimates that 197 million jobs could be lost globally.
In spite of these challenges, UK SMEs have persevered and proven resilient in the face of the pandemic. According to research carried out by Aldermore Bank, 2.2 million SMEs have realigned their business plans in order to survive, and a quarter of small businesses are on track to survive the current situation indefinitely, proving there is light at the end of the tunnel.
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WorldFirst was ready with the infrastructure, and service to help
Currency market volatility caught out hundreds of companies during the early weeks of Covid-19, highlighting the importance of comprehensively managing foreign exchange risks through a structured strategy with a chosen partner.
Finance directors operating in the travel industry have needed to handle refunds from foreign market supplier to collect back in local currency whilst avoiding large bank fees.
Throughout the last 11 months, WorldFirst has had first had experience helping travel industry clients manage these issues in some of the following ways:
- Low, transparent pricing – cheaper than High Street banks
- Making quick, easy, and reliable international money transfers and business payments
- Supporting mitigation of foreign exchange risk with forward contracts, clear hedging strategies, and transparent forwards points
- Supporting change of circumstance by unwinding forwards cover already in place
- Bulk payment uploads to reduce admin processing client refunds
- Providing unrivalled customer service
Tiered and transparent pricing
Knowing exactly what you are paying up front, without the worry of hidden fees is always an important consideration for business, but especially so during a time of market upheaval.
With our industry-first transparent pricing model our clients receive a fixed fee based on their annual trading volume. With clear FX margin bands, our standardised pricing means there are no opening fees, annual fees, or deposit requirements. This is something which has been of great value to McCabe Pilgrimages who cited cost savings with WorldFirst, along with fairness and transparently, as some key factors to managing their cashflow in 2020.
“Set up in the early eighties, we at McCabe Pilgrimages are a travel company specialising in pilgrimage trips. As such, we are exposed to different currencies and work with FX regularly. Our previous broker charged us very high spreads, so we decided to switch to WorldFirst. This proved to be a great change for us as we made significant cost-saving and found a trustworthy solution that we are still very happy with today. With Covid-19 causing a huge disruption to the travel industry, we have not been able to operate any tours. WorldFirst’s fair and transparent cancellation policy on some large forward contracts that we had to cancel helped us greatly in keeping our cashflow relatively healthy during this difficult period”.
– Tim Lunn, Project Organiser, McCabe Pilgrimages
Supplier FX payments made easy
Travel companies that trade internationally are often challenged by paying overseas suppliers in a cost efficient and timely manner. With rapid changes in market, the last thing our customers needed was to be spending more time with their FX suppliers than with their customers and suppliers, making endless phone calls, tracking payments, or managing errors. They need the payments made easily, and the funds to arrive as quickly as possible.
Many banks still quote between 2-5 days for international payments from business bank accounts to clear.
Through WorldFirst’s extensive payments network, we can deliver funds to suppliers much faster, with same day availability on 97% of currency pairs actively traded through WorldFirst’s online platform.
For many of our customers ensuring vendors are paid with speed and efficiency across multiple currency is pivotal to their business.
“I’m delighted to pay tribute to WorldFirst, who have proven an invaluable partner to my business since its establishment as an independent Tour Operator. We utilise the services of WorldFirst for supplier payments through a myriad of currencies, and while fundamental to the working relationship, I’d say less transactional and more pivotal, is the degree of personal engagement, exemplified in assigning individual account managers to make sure that their support is tailored in the best possible way.”
– Paul Johnston, Managing Director, Evergood Travel
“At African Horizons Ltd we work with our partners Horizon Horseback and Horizon MTB to provide the most outstanding riding and cycling holiday destinations in Southern Africa. We use GBP and Euros to regularly pay invoices in foreign currencies such as Rand, Pula and USD. Since collaborating with WorldFirst they have offered us upfront good exchange rates in conjunction with a user-friendly online platform making transactions simple and quick to complete.”
– Lucy Buchanan Director at African Horizons Ltd
In the relatively calm markets of recent years, some finance directors may have overlooked developing a company-wide foreign exchange policy. While there was a spike in volatility in 2016 after the Brexit vote, 2018 and 2019 were relatively stable. But in 2020, this would have proved costly. On March 20, sterling fell to its lowest level against the US dollar for 35 years, with the GBP/USD exchange rate moving from 1.3157 to 1.1494 in the space of a few days.
Many WorldFirst clients looked to us to help identify the level of FX risk their business might potentially incur and offer a range of solutions from which they could develop strategies to help minimise disruption.
We particularly value the relationship of trust and mutual respect which has grown over the past three years with Joe, our Relationships Manager. Due to the Covid pandemic, we had to close out the forward contracts we had in place, which was a painful and costly process for our business. Joe supported us along the way, explaining different options and helping to get us through these difficult times.”
– Lucy Buchanan, Director at African Horizons Ltd
The mechanisms of the FX market can certainly be complex, varied, nuanced; and I’ve found WorldFirst very good at understanding the requirements of individual companies. As an industry confirming prices to clients in advance of outlay, we generally manage our FX exposure by utilising forward contracts, a process that is user-friendly and adaptable. As we eventually scale upwards, I have no doubt that their support will align with any new FX demands we face and look forward to the journey. Of course, while I always prefer to look ahead, I should end by saying that their support during the existing Covid-crisis, where the travel industry has faced an unprecedented volume of un-written business, WorldFirst have been excellent.”
– Paul Johnston, Managing Director, Evergood Travel
Unrivalled customer service
There is a reason WorldFirst are rated excellent on TrustPilot, and that’s because our team of dedicated London based account managers are here to support our customers from the start to the end of their transactions. With 24/5 customer service, customers are able to speak someone directly over the phone when they need help.
Felicia Severns, Managing Director at Odyssey World credits our dedicated account managers for helping her achieve her business needs. Having been both a private and corporate customer with WorldFirst, Felicia has experienced the full spectrum of our service and believes it’s our excellent customer service that sets us apart from our competitors – and we definitely agree!
“I have worked with WorldFirst both as a Private and Corporate customer for 8 years. I like that the app and the online interface make it really easy to manage our international transfers. Having an Account Manager to contact directly for more complex transactions, such as forward trades, market analysis and service insights has been valuable, especially as we dealt with the impact of Covid-19. James is frequently available and always responds quickly with accurate information and a good understanding of our business needs. This personal service sets WorldFirst aside from most financial institutions and I would have no hesitation in recommending them.”
– Felicia Severns, Managing Director, Odyssey World
The next Challenge
The next challenge will be Brexit. With the UK having officially exited the EU on 31 January 2020 (and the transition period ending on 1 January 2021), the industry will have to remain flexible and adaptable, as uncertainty still remains around the impact of leaving the EU . While economic, social and political ties are set to change, travel and tourism may also see significant transformations post the transition period.
If you haven’t already done so, as a company with significant overseas transactions, you should move quickly to help mitigate against further volatility, with predictions that markets are likely to continue their unpredictable behaviours post Brexit.
Our dedicated customer service team will be there to support you, so give us a call.
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|Lock in an exchange rate for up to 24 months and reduce downside risk exposure. Easily book and manage forward contracts online or via the phone.
Celebrating our customers – Your success is our success:
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- Fashioning success with ecommerce brand Glamour Empire