Airport exchange rates high? Yep

People often wonder if it is more expensive to exchange money at the airport before departure. Usually, prices are higher at tourist sites and in remote locations - but the airport is no exception.

Two JoongAng Ilbo reporters compared the cost of changing won for U.S. dollars at Incheon International Airport and commercial banks in Seoul.

On Jan. 17, departure areas on the third floor of the airport were crowded even in the morning, with a number of people waiting for their flights.

The airport contains exchange booths operated by Kookmin, Shinhan, Hana and the Korea Exchange Bank.

Unlike other branches of the banks, there were signboards displaying the rates of the dollar and other currencies.

At 10:56 a.m., a reporter bought $50 at each of the four booths. The dollar cost 1,098.5 won to 1,099 won.

At the same time, the other reporter bought the same amount of greenbacks at the banks’ branches downtown, where the dollar cost 1,079 won to 1,080 won. As of 12:30 p.m., the won recorded 1,061.1 won against the greenback.

What about changing dollars for won?

At 11:20 a.m., the reporter went down to the arrival area on the first floor of the airport. At the exchange booths, the won ranged from 1,021 won to 1,024 won at the four banks’ booths.

At the same time, the won was trading at 1,042 to 1,043 per dollar at the downtown branches.

Those who exchange won for dollars at the airport booths on the third floor receive receipts or coupons that offer discounts on fees at the arrival-area booths.

With a coupon, the reporter could sell a dollar at 1,030 won at the Korea Exchange Bank and 1,036 won at Shinhan Bank. Even with the coupon, the dollar was cheaper downtown.

And exchanging currency at Gimpo International Airport costs travelers even more. The airport has only one exchange booth run by Shinhan Bank. At 12:21 p.m., buying a dollar cost 1,104.48 won. When selling, it was 1,019.52 won.

The reason why airport exchange booths are more expensive is the cost of operating the booths. Insiders at the four banks cited high airport rents, 24-hour-a-day operations and the risk of doing business when foreign exchange markets are closed.

The four banks pay a total of about 50 billion won ($46.2 million) in rent annually to Incheon International Airport Corporation and the current contract expires in June. Woori Bank reportedly is interested in taking one of the booths and that is likely to push rents even higher, an additional expense that will undoubtedly be passed onto consumers.

“Although the airport booths are not that profitable, having a booth helps boost public image of commercial banks with some positive PR effects, so banks are competing to be in them,” said an employee of one of the four banks.

BY KIM WON-BAE, LEE JI-SANG [ssh@joongang.co.kr]