Weak rupee not a dampener for foreign tours, say travel cos

Weak rupee has not dented the demand for foreign travel as operators continue to see a surge in bookings.

“Our outbound travel business is growing significantly. Over the past year, the rupee fell from 60 to 66 against the dollar. But, we have not seen a decline in demand. Our focus on innovation has worked well in our favour. Our teams have created packages and products tailored to every customer budget and this have resulted in strong consumer uptake. We’ve launched our summer 2016 holidays and the demand is truly encouraging,” said Madhavan Menon, managing director, Thomas Cook India.

According to Outbound Tour Operators Association of India president Guldeep Singh Sahni, foreign travel is growing at 15-20 per cent in 2015 and some companies are reporting even higher growth. “Weak rupee is not a deterrent. Customers may lower their travel budgets, but will not cancel plans due to the currency factor,” he added.

Foreign tour costs are divided in two components — rupee and a foreign currency component. Accommodation, ground transport, fees at attractions, guide fees, meals are covered in foreign currency component, while air tickets, visa cost, insurance and tour managers' salaries are factored in rupee.

Travellers are also getting price benefits in countries such as South Africa, where local currency has depreciated against the Indian rupee. Among the emerging market currencies while the Indian rupee weakened 7.89 per cent against the dollar over last November, South African Rand and Turkish Lira weakened 30-32 per cent against the dollar.

“We have seen a positive impact of currency depreciation. Package costs are down by about eight per cent in comparison to last year. Indian visitors are opting for optional add on trips or increasing the length of stay. We have also seen an increase in tourist spend in our country,” said Hanneli Slabber, country manager (India), South Africa Tourism.