Hospitality industry deals with guests all over the world. That’s why foreign currency transaction in hotel or restaurant is one of the most frequent tasks. The tourism business of any country is the most important source for integrating foreign currency in the country. Therefore the Government closely monitors all foreign currency that has taken place in the country. Government introduces a strict system of checks and records for the foreign currency which is extended by hotels as well.
A Hotel has to follow the following steps in order to exchange the foreign currency:
- A hotel has to obtain a license to exchange foreign currency.
- To exchange foreign currency, there has to be authorized personnel to deal foreign exchange transactions. For example, the front office cashier.
- Foreign exchange is done only in local currency.
- The rates of exchange must be exhibited significantly at the exchange point. Central bank governed the exchange rates and the updates the exchange rate on a daily basis.
- Hotel will extend foreign currency exchange only for resident guests of the hotel. If the nonresident guests want to exchange foreign currency then they may have to go to exchange bureaus and banks to exchange their currency.
Procedures for Accepting Foreign Currency in Hotel
The central bank has fixed some actions and procedures which every front office cashier has to follow while receiving foreign exchange. The actions or procedures which are followed are as follows:
- Front office cashier asks the guest for passport and will verify some identification from the passport, for example name and photo, place and date of issue, date of expiry of the passport.
- Front office cashier asks the guest for room number to confirm his/her status of being resident.
- In case of nonresident guest, the front office cashier directs the guest to go to the lobby manager for getting authorization who will only extend this facility to VIPs or regular guests of the hotel.
- If the foreign exchange is accepted by the Government then transactions are done in Dollars, Sterling pounds, Euros and Yen.
- Front office cashier receives the cash or Travelers Check.
- Compute the total amount of local currency to be paid by multiplying the total amount of foreign currency by the exchange rate that is exhibited at the cabin.
- Fill the details in the Foreign Exchange Encashment Certificates. The Foreign Exchange Encashment Certificates come in serially numbered books for better control.
- Front office cashier requests the guest to sign the Travelers Check in case of exchanging this check and make sure that the sign is matched with the earlier signature of the guest.
- Request the guest to sign the Foreign Exchange Encashment Certificate and compare the sign with passport sign.
- Provide the total amount of local currency with the original Foreign Currency Encashment Certificate to the guest.
- Affix the second copy of the Foreign Currency Encashment Certificate to the Travelers Check.
- Leave the third copy of the certificate in the certificate book.
- Fill the details in the Record of Foreign Currency Transacted, which is a control sheet of all foreign currency transactions in a sheet.
- Under the Foreign Exchange column, fill the details in the Front Office Cashier’s Report.
These are some general procedures which are subjected to change according to laws of different countries & states and rules set by particular hotel itself.