As international business travel stages a recovery, travel managers should consider budgeting for foreign exchange fees.

According to data from Airlines Reporting Corporation, international travel has staged a significant recovery in the last eight months. International travel transactions made through U.S. travel agencies are up nearly 12 percent over the same period last year, and international fares are up more than 26 percent. As global business travelers get back on the road, few companies are tracking the impact on their budgets of foreign transaction fees incurred on their corporate cards.

While the Credit Card Act passed by President Barack Obama has put consumer protections around certain categories of credit card fees in the United States, the foreign transaction fee was not among them. Many consumer cards in the U.S. will levy a charge of about 3 percent of the total transaction, ostensibly to perform the conversion from the foreign currency to the home currency. But the issue isn’t so clear cut.

According to a survey conducted by AirPlus International in late August and early September, more than 40 percent of travel buyers surveyed said they did not know the percent fee their primary card provider assessed for foreign transactions. Just less than one quarter of buyers said their rate was less than 2 percent, while 18.3 percent pegged that fee at less than 3 percent. Just about 5 percent revealed that their corporate card levied no fees on international transactions, while just over 6 percent said they paid more than 3 percent in conversion fees per transaction.

Just one-third of travel buyers surveyed accounted for foreign transaction fees in their travel budgets, while 70 percent said that they either did not know (19.3 percent) or did not budget for such fees (50.6 percent).

Download the free PDF for full survey results.

AirPlus: The Wire September 2010 (PDF, 257 KB)