More rouble woes for tourists as exchange houses cut off buying Russian currency
Russian tourists trying to buy dirhams with their beleaguered currency are being hammered as money exchanges withdraw from risky rouble transactions.
Travelex, the world’s biggest foreign exchange retailer, has stopped buying roubles as the Russian currency tumbled to new lows.
Other money foreign exchange retailers are hiking spreads to as much as 10 times greater than trades on other currencies such as the British pound.
Travelex, recently acquired by Indian businessman B R Shetty, suspended its purchases of the currency on Wednesday.
The rouble has lost more than half of its value since June, as falling oil prices and western sanctions bite. The Russian central bank raised interest rates to 17 per cent last Tuesday in a bid to shore up the falling currency. But that failed to stop its slide. A dollar that bought 33 roubles in June today buys 60.
One couple arriving on Saturday afternoon at Abu Dhabi International Airport from Moscow said they had lost out on the exchange rates and would not be spending as much as they had planned during their stay in the capital.
Russia is Abu Dhabi’s 19th biggest source market for tourists, with 3,505 visitors from the country in the first ten months of the year. They accounted for around 14,000 hotel nights in the capital.
Russian tourists account for a more significant share of visitors to Dubai.
Travelex said that the rouble was “experiencing intense volatility, which makes it difficult for us to price fairly and accurately for our customers”.
The difference between the buy and sell price for a given currency, known as the spread, has grown for the rouble as uncertainty over its decline creates risk for exchange handlers.
At UAE Exchange, the country’s biggest currency house, it cost Dh65 on Saturday to buy 1,000 roubles. That is 44 per cent more than the Dh45 that a seller of the same 1,000 roubles was being offered. The difference was more than 10 times that between buy and sell on British pounds.
At Al Ansari, an exchange house headquartered in Dubai, there was a 39 per cent difference — again, more than 10 times that of sterling.
The slide of the currency has hit popular tourism destinations for Russians around the world.
Some Austrian ski resorts have seen tourist interest from Russia fall by more than 40 per cent, according to the Russian newspaper Gazeta.ru, while a spate of Russian travel agency bankruptcies have further reduced options for tourists.
Forex Bank, based in Stockholm, has stopped trading robles in Sweden, Finland, Norway and Denmark, while the online foreign exchange platform FXCM stopped trading the currency last week, according to Reuters.
Protesters gathered outside the Moscow branch of a Société Générale unit on Friday to complain about ballooning payments outstanding on mortgages denominated in foreign currencies.
Dollar mortgages rose in popularity after the 2008 financial crisis, but about 15 per cent of payers have defaulted on them, according to the Russian central bank.
Chinea’s Xinhua news agency reported that the Estonian tourist companies were expecting a fall in Russian tourism of about 30 per cent over the next few months, while the European Travel Commission said that Russian visits to Europe were expected to fall by about 10 per cent this year.
Jumeirah Group, the largest hotelier in Dubai with an estimated 30 per cent market share, said this month that Russian visitors had fallen down the league table of guests at their establishments in Dubai and Abu Dhabi.
Russians were the second biggest category by nationality in Jumeirah hotels last year, equal with visitors from Britain, but now they take a firm third place behind the UK and visitors from other countries in the GCC, Jumeirah said.
“In Moscow, the weakening rouble is the number-one topic of conversation,” said Marina Zvonariova, a Moscow-based journalist who previously lived in Dubai. “People are looking for cheaper destinations like Turkey or Egypt. And some people have given up on studying abroad.
“I’d probably still go to Dubai as a tourist — but I’d go with flydubai, not Emirates.”
Follow The National’s Business section on Twitter
Published: December 20, 2014 04:00 AM