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Impact of the latest currency updates on Indian tourism

Published in Travel & Tourism Friday, 08 February 2019 12:57

 

 

 

 

 

 

                                                By: Abhas Desai,Co- Founder and CTO, Taxidio Travel India

The current verdict seems to be that the Indian travel industry is booming. The signs universally indicate that the future for the sector will only be strengthened with time. 

Travel and tourism accounted for 9.4% of India’s GDP in 2017. In fact, the signs look promising and the industry is estimated to grow by 6.9% until 2028. Travel and tourism generated 41.622 million jobs in the year.

But then, with every opportunity there comes a share of challenges. Especially if you consider the declining value of the Indian Rupee, which may prove to be a big detriment for the travel industry in 2019.

The value of the Indian Rupee fell 10.5% against the US Dollar and 5% against the Euro, over the last year. Among the BRICS nations, the only currency that performed even worse was the Russian Rouble. From the increasing trade deficit to the growing price of crude oil, a variety of factors led to this dip.

Whatever the reason may be, as a result of the same, the Indian travel industry was severely impacted. The US Dollar is the currency used for transactions during most international trips by Indians.  Not only does this mean that the cost of buying FOREX becomes more expensive; public transportation, accommodation and even enjoying a regular meal abroad may cost a lot more than usual.

What about the Euro then, the other currency for mass transactions? Even though it only became slightly more expensive against the Rupee, one must remember that the currency had already scored a massive rise against the Indian Rupee in 2017. Moreover, enough increasing fuel costs have also led to a rise in flight ticket costs.

But when one door closes, another opens. The value of the Turkish Lira became 20% weaker against the Indian Rupee over the past year, making travel to the country much cheaper. Visitors thronged to visit the culture of Istanbul and the magnificence of Antalya in droves. However, as great a destination as Turkey is for the Indian traveller, one must remember that the Euro is a widely used currency in the country. So, the affordability is not really felt as much as one would ideally like. 

Why then, is there such an upsurge in travel? The answer is quite simple. The definition of travel has changed from what used to be leisure, to what is now a lifestyle. Even though the cost of travel may have increased, the budget that travellers allocate to their expeditions has seen a congruent rise as well.

The idea of budget travel has also become a phenomenon in recent times. Budget travellers may decide to not spend extravagant amounts on amenities and luxury and instead, invest on the basic amenities in exotic destinations. 

And some may even choose to visit a cheaper destination owing to the increased currency rate, because the world is not short on amazing locales for tourists. So instead of going all the way to Los Angeles, a visit to Bali may suffice.

The idea of travel is evolving, despite the vagaries of international currency. The sector is booming because the idea of exploring the world is what drives millions to set out on a magical journey. The experience outweighs the expense. Today, the world is indeed your oyster.

 

 

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Business Digest August September 2018

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