Hartsfield-Jackson International plans to reduce the rent it charges the currency exchange business that operates at the airport.
Airport senior deputy general manager Michael Smith said currency exchange operator Travelex has had “low interest,” similar to the decline of business at airport bank branches and ATMs.
The proliferation of credit card use has cut the demand for currency and prompted consumers to depend less on cash, which has already made it less profitable for banks to operate at the airport.
“Travelex has been unprofitable at Hartsfield-Jackson” due to a high minimum annual guaranteed rent of $6.6 million established at the beginning of the agreement, according to airport documents.
The airport currency exchange contract was awarded in 2012 after months of controversy. After the city selected International Currency Exchange to win the contract, competitor Travelex filed a protest that pointed to problems with the qualifications of the selected winner’s disadvantaged business partner.
Now, Travelex is up for a contract extension and is asking the airport to consider waiving the $6.6 million minimum annual guarantee.
The company holds a seven-year contract, first struck in Aug 2012, with an airport option for a three-year extension. The initial term is due to expire Aug. 21.
Airport general manager John Selden determined “that it is in the best interest of the traveling public to maintain foreign Currency Exchange Services on Concourses E and F for the international customers,” according to airport documents.
Plans are to change the percentage rent on foreign currency exchange revenue from 7.5 percent to 9 percent, while charging 45 percent on all other services starting Sept. 1 through Aug. 21, 2022.
Based on 2018 revenue, airport officials expect the new rental rates to bring in about $4.3 million in rent, instead of the previous $6.6 million minimum.
“We do see a reduction of about $2.3 million in receipts from them, but it’s a service that we would like to keep, rather than have them leave” and have to rebid the contract, Smith told Atlanta City Council members.
The city council transportation committee voted unanimously in favor of the measure, which now goes to the full council for approval.