NEW YORK -- Mention
"euroland" to clients, and they may think you're talking about a
new theme park.
This is because the imminent arrival of a new economic union
combining the monetary systems of 11 western European nations --
dubbed 'euroland' for the currency upon which it based -- has
generated relatively sparse coverage in the U.S. media, leaving
retailers and their customers unsure what it will mean, according
to participants in Travel Weekly's Euro Conference.
A number of agents who do business with Europe expressed concern
about how the new system will affect their commissions and payment
Allen Rich, president of Rich Worldwide Travel of Harrison,
N.Y., said that many practical questions are still unanswered.
"We're trying to figure out how we will get our commissions," he
Currently, he receives commissions from European suppliers in
two ways: larger companies, such as major hotel chains, often
maintain U.S. bank accounts and pay agents in dollars; smaller
firms, however, may simply send a check in their own currency.
"So we want to know, when they pay us commissions, what the
values are going to be and how it will differ" from current
practice, Rich said. "That's very important when you consider
that's our livelihood and our income we're talking about."
The main uncertainty lingering now is over the euro-to-dollar
exchange rate, which will be set early next year but will fluctuate
-- just as the dollar does now against European currencies.
Rich said he hopes that the new system will make it less
expensive to convert European currencies into dollars. Currently,
he deposits commission checks in foreign currencies at his bank --
which does the conversion itself and charges a substantial service
fee. It may be easier for the bank -- and more economical -- when
numerous currencies are combined into one, he said.
Another key question for agents is how much extra time they may
have to spend interpreting the new system for their clients.
Moreover, starting early next year, clients will be able to
purchase euro traveler's checks and make other transactions
involving the new currency. As they do now, agents will rely on
their computers to calculate prices in euros and to do other
However, in the short run, when local currencies will first have
to be translated into euros and then into another currency, it
could be more complicated -- and more time-consuming, Rich said.
"We are going to be in a mathematical ball game with clients," he
said. "If I see a figure like 1,600 lire, I know what that means in
dollars. But if you first have to convert 1,600 lire to euro and
then to dollars, it's going to be extra work."
Fred Goldberger, of Macpherson Travel, New York, agreed that
"during the interim period, it'll be a little trying." He added,
"It may be confusing when you see all these different price
quotes," which conceivably could be calculated in dollars, euros
and the local currencies for the countries on a traveler's
Goldberger also commented that he finds it curious that few
clients have raised the subject. "I have primarily corporate
clients, and nobody is asking about it.But in that sense, it's like
the Y2K problem: Nobody knows what's going to happen till it
Goldberger said that agents could possibly use some services
available through their CRSs -- such as a program offered by
Worldspan that enables agents to overnight packets of currency to
their clients -- to promote the new euro. "It'll be a good thing
once it settles down," he said. "But like anything, it will take
some time to get the kinks out.
"I don't think it will have much of an impact at all, at first,"
said Heinz Wesner, president of DER Travel Services in Rosemont,
Ill. Wesner said that even in Europe, the advent of the euro is
being downplayed. "I was in Germany just the other week, and most
people said they couldn't care less about it. Once the Germans got
over their initial shock that the D-mark isn't going to be in
existence in three years, they said, 'So what?' " he recalled.
The subdued mood surrounding the euro's debut may be due to the
fact that the currency itself won't be in circulation until 2002;
at that point, it will replace the local currencies of the
participating nations, and bank notes issued in francs, pesetas and
other denominations will be retired.
However, the euro will be launched as an intermediary currency
Wesner pointed out that travel agents need to be prepared for
possible accounting changes that will arise if the euros appear in
He predicted, however, that eventually the new system will lead
to more stable prices and simplify agents' lives. "In the past, I
used to keep 11 different bank accounts for those countries," he
said. "Now I can do that in one bank account. That means I can also
plan in larger quantities, which certainly makes things