The speeches referenced in the article below, and other speeches
from Travel Weekly's Euro Conference, are available in their
entirety, exclusively on Crossroads.
NEW YORK -- Although it won't be around as folding bank notes
and pocket change for another three years, the euro could appear in
invoices, price quotes and credit card billings from European
suppliers starting in January, and it behooves travel agents to
learn about it fast -- before clients start asking questions.
That was a
recurring theme from retailers and suppliers who addressed an
industry audience during Travel Weekly's conference on the euro at
New York's Marriott Financial Center. The conference was
cosponsored by Visa and Marriott.
Speakers were also concerned about the one major question mark
still hanging over the new currency for the European Monetary
Union, which will kick in for 11 nations as of January 1: Exactly
what will the euro be worth in U.S. dollars, and in the local
currencies of the participating countries, and how much could those
values change from where they are today?
Firm, fixed exchange rates between the euro and the currencies
of participating EMU nations won't be finally set until January 1,
and the dollar-euro exchange rate will fluctuate on world markets,
just as the dollar does against the euro's predecessor, the
European Currency Unit.
The euro will serve as an intermediary currency for all
transactions; exchanges from dollars into local currencies, or
between one local currency and another, will all involve
translating them first into euros, then into the local currency--a
process known as triangulation.
The problem for tour
operators who are just now printing their 1999 brochures with
dollar prices is that they don't yet know exactly how the new
exchange relationships will shake down once the euro is
"Maybe we shouldn't put any prices in our  brochures;
maybe we should send out [separate] pricing lists," said Jet
Vacations president Ravi Rao, only half in jest.
Sandy Cutrone, president of European Connection, Mineola, N.Y.,
a meetings and incentive specialist, said, "We don't know at this
point what will happen in the next few months. There will be quite
a bit of confusion in the beginning."
Understanding the euro is especially important for agencies that
have corporate clients with heavy European travel, and for
retailers who handle groups and/or deal directly with European
suppliers, speakers said--in both cases, presenting some
opportunities as well as potential problems.
At BTI-WorldTravel Partners, a big commercial agency with many
multinational companies as clients, "we view this as an opportunity
-- a chance to deliver better value and a broader range of services
to our customers," by educating them about the euro and helping
them transform their own systems and procedures to deal with the
new currency, said Dan Maschoff, BTI's vice
president-international. "We will be looked to, to provide them the
The same thing will happen to smaller, leisure-oriented
agencies, as clients who are planning a trip to Europe in 1999
start to notice news stories about the new European currency, said
Ken Sause, president of TravelWorks in Wallingford, Conn., an
agency with seven employees. "Most American travelers have yet to
take notice of what is less than eight weeks away," Sause said.
"The arrival of the euro may be a blessing for those agencies,
large and small, that move quickly to understand it and position
themselves to be informational leaders for their clients."
Speakers predicted some benefits for U.S. travel companies from
the transition to the euro, including immediate savings from not
having to maintain separate currency accounts for the 11 euro-zone
nations where they may have dealings, and a newfound ability to
easily compare euro prices for hotels, tours and other travel
services from one country to another, without having to calculate
currency exchange rates, since prices would be listed in both euros
and local currency.
The same benefits will apply to travelers as well, and the
latter concept -- referred to as "pricing transparency" -- could
influence suppliers in some of the higher-priced countries to lower
their rates so that they appear more competitive, some speakers
senior vice president-strategic planning for Travel One, a
corporate agency in Mount Laurel, N.J., said commercial agencies
should already be talking to their major clients to see how their
management information systems might have to be adjusted to handle
invoicing or reporting in euros after January 1. "I don't think a
lot of corporations really know what they're going to need yet,"
Roumas said. "But I'm convinced that they are absolutely going to
need parallel tracking reports for a while -- dual currency
reports. Whether they ask for them or not, you should prepare your
systems to get ready for them." As for automated credit card
reconciliations, "we're not sure how this is going to pan out, but
there's going to be reprogramming that has to be done in that
area," he added.
Both Roumas and Maschoff suggested that the introduction of the
euro might also open the door to new commission cuts. "It will
probably be an avenue for suppliers to standardize or reduce
commissions throughout Europe," Roumas said. "They might say, 'It's
x number of euros per ticket,' and there might be a cap of so many
euros per ticket."
The potential ramifications of the euro on travel companies
could easily have filled a much longer conference, speakers noted.
For example, Peter McCormack, vice president-sales and marketing
for Trafalgar Tours, noted that after the hard euro currency is
deployed in 2002, his company will lose one source of revenue:
Because many of its escorted tours are on multi-country
itineraries, the operator often sells clients little currency
packets with small amounts of local currencies they can use as
their trip proceeds. After the euro banknotes and coins arrive,
those currencies will disappear.
One other little thing that's bedeviling Trafalgar's parent
office in London as it readies its internal systems for euro
pricing, McCormack noted, is that the company not only has to
revise its software to handle dual-currency pricing and currency
exchange triangulation, but it also has to come up with a new key
for its computer keyboards--one with a "euro" symbol on it. Audio
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Sause, president, TravelWorks Inc.Sandy
Cutrone, president, European ConnectionCharles
Roumas, senior VP, strategic planning, Travel OneDan
Maschoff, VP international, World Travel Partners-BTI
Rosenthal, senior VP, int'l lodging finance, Marriott
Rao, president, Jet Vacations International Inc.Peter
McCormack, VP, sales and marketing, Trafalgar ToursIan
Taylor, VP, corporate foreign exchange dealing, Thomas Cook
session 1 (Sause, Cutrone, Roumas, Maschoff)Q&A
session 2 (Rosenthal, Rao, McCormack, Taylor)