This is crazy - crazy interesting and crazy nuts. The idea of arbitraging has always be fascinating to me. I've had an idea for currency arbitrage in the travel industry, but never done anything other than back of the envelope calculations. Feel free to take the idea:
Tour operators publish their prices for the upcoming year's trips. They publish them usually in one currency, sometimes in two, rarely in three. They're beholden to these prices because they publish brochures and distribute them to places like Flight Centre.
So what you do is become a wholesaler of a bunch of tour operators' trips (this is easy to aggregate, many have XML feeds that publish their inventory, including pricing & availability). Then you use real-time exchange rates to figure out which currency it's best to sell in to a customer and then buy the product from the operator using another currency.
For example, say the US & CAD dollars are at par when prices are published. If the US drops a lot compared to the CAD, you sell the trip to your customer in CAD but purchase the trip from the operator in US.
The beauty is that operators will pay you a commission (usually 20-25%) on top of whatever you gain from the currency arbitrage. There's some complexity in becoming a legal wholesaler and being able to accept multiple currencies etc.
At the very least it makes for some interesting math.
And then you get a client like me, who points out that the price in Euros in 10% cheaper than the price in AUD because of currency fluctuations in that period, and I would like to pay in Euros please.
The travel agency (in Australia) weren't able to do that for me, however - so it seems their agreement was in a single currency as well. I'm not sure how hard I could have pushed it, because the dates ended up not quite working anyway.
Ha, yes, but you'd be in the minority of travellers who think like that. But I know of tour operators who refuse to allow this. If you're an Aussie resident, you have to pay AUD. If you're in the EU, you have to pay in EUR etc.
Tour operators publish their prices for the upcoming year's trips. They publish them usually in one currency, sometimes in two, rarely in three. They're beholden to these prices because they publish brochures and distribute them to places like Flight Centre.
So what you do is become a wholesaler of a bunch of tour operators' trips (this is easy to aggregate, many have XML feeds that publish their inventory, including pricing & availability). Then you use real-time exchange rates to figure out which currency it's best to sell in to a customer and then buy the product from the operator using another currency. For example, say the US & CAD dollars are at par when prices are published. If the US drops a lot compared to the CAD, you sell the trip to your customer in CAD but purchase the trip from the operator in US.
The beauty is that operators will pay you a commission (usually 20-25%) on top of whatever you gain from the currency arbitrage. There's some complexity in becoming a legal wholesaler and being able to accept multiple currencies etc.
At the very least it makes for some interesting math.