This chapter discusses financial management of international hospitality operations, focusing on the international monetary system. The financial activities of international hospitality corporations are much more complicated than domestic operations. The increased complexity and difficulty are the result of having to deal with more than one currency in international business transactions. Currencies of different countries do not maintain a fixed relationship to each other due to changing economic, social, and political factors. National currencies fluctuate in value, and such fluctuation can make a hospitality firm's investment or holdings of foreign cur-

rencies appreciate or depreciate against the home currency. It presents great uncertainty for hospitality firms to forecast accurately future net cash flows in capital budgeting, and incur potential financial risk in obtaining loans denominated in foreign currencies.