Until recently, there has been a noticeable surge in the number of Indians opting to travel internationally. While United Arab Emirates, the United States, and Thailand have mostly been the preferred destinations, newer and lesser-explored countries like Azerbaijan, Vietnam, Kazakhstan, and Bhutan have swiftly emerged to top and gained interest amongst tourists of all age groups — from couples to young solo travellers.
According to a report, in the last six months, the INR has depreciated by about 3.21% against the USD. As currently, the exchange rate stands at approximately ₹87 per $1. This clearly shows that a weaker rupee means your travel budget shrinks.
Indians are investing more than ever in international travel, whether it is to enjoy varied landscapes, cultural encounters or culinary delights. However, this pattern has recently changed, owing mostly to currency swings. The rupee’s depreciation versus other major currencies has pushed many travellers to either postpone their overseas vacation plans or choose a more affordable destination.
A sector that rapidly evolved from being a niche industry to a mainstream aspiration, which propelled outbound tourism growth, has yet again come to a standstill because of currency uncertainty, rising airfare, escalating food expenses, and expensive accommodations. The impact of this is especially evident among tourists from India and Southeast Asian regions, who planned to travel to the Western countries with a stronger currency. A shift in unfavourable exchange rates has created a ripple effect, leaving tourists with little to no option but to adjust in their choices.
Consider, for instance, a four-member Indian family, planning to travel to the United States. An estimated ₹5,00,000 was their budget a year ago when the value of the dollar was around ₹85. Given the current circumstances, the same trip would cost about ₹5,30,000, with the value of rupee at ₹85 to the US dollar and an increase of ₹30,000. Due to similar changes in the cost incurred, several tourists are restructuring their budgets, minimizing their expenses on leisure activities, shortening the duration of their trips, and exploring alternative travel options.
“The rupee’s depreciation is directly impacting the affordability of international travel. Travelers are adapting by choosing destinations with lower currency fluctuations and planning their forex needs well in advance. We are seeing a growing interest in forex cards and early currency booking to mitigate unpredictable exchange rate swings. At Prithvi Exchange, we encourage customers to strategize their forex requirements ahead of time to ensure cost efficiency,” says Pavan Kavad, Managing Director of Prithvi Exchange (India) Limited
Impact on business and student travellers
Not only tourists, business travellers and students, too, are feeling the effects of a declining rupee in different but related ways. Even the biggest of corporates are combating their international travel expenses for employees by either prioritizing highly-essential travel plans or emphasizing on hosting virtual meetings. This shift in trend is prompted by a desire to save money while increasing efficiency in a volatile currency environment. For the student community, tuition and living expenses have surged multifold, making studying abroad more expensive than ever. In fact, many students are now looking for additional financial aid through scholarships and part-time jobs to cover the mounting costs.
