The weakening rupee is spoiling the New Year plans of many a globetrotter Indian. In fact, industry estimates by Travel Agents Association of India (TAAI) point out that the outbound category has taken an almost 10% hit for the Christmas-New Year holiday season.
This trend is, of course, a dampener for tour operators who expected a moderate year-on-year growth. However, going by bookings and traffic, domestic travel during this period continues to hold its ground, with Goa again scoring as the hottest year-end destination.
?We anticipated around 10-12% y-o-y increase in outbound bookings for the year-end travel season, but that hasn’t happened. Due to the devalued rupee, people are shortening the length of their trips abroad and many who planned year-end travel are postponing them,? says Frederick Divecha, senior vice-president-marketing, Kuoni India. On Thursday, the rupee value hovered around 52.78 per dollar.
Tour operators have witnessed around 10% year-on-year increase in domestic bookings for the busy travel season, but the number of international bookings hasn’t seen an increase for most of them. Weak rupee has jacked up package costs of international holidays, hurting the price-conscious tourists. ?Travellers have to shell out extra, not only for hotels, but also for shopping expenses, which is a party spoiler,? says Sabina Chopra, co-founder, Yatra.com.
TAAI’s president Rajji Rai agrees that the weak rupee is the primary reason for sluggish international bookings this year-end. ?Even though Indians are increasingly spending on travel, the weakening rupee has impacted our year-end business by about 8-10%,? he says.
For domestic tourists, Goa still remains the top New Year holiday destination, with the three-day music extravaganza, the Sunburn Festival, attracting many and bookings peaking for Goa during the festival.
In Goa room, rates have doubled for the last two weeks of December and the average airfare is around Rs 20,000. Traditionally, for Indian outbound travellers, Thailand is a popular New Year destination. But this year, Thailand has not picked up because of the floods. ?Many people book their year-end holiday in October itself, when the flood situation was really bad in Thailand. So, many opted for Goa instead, within that budget,? points out Chopra of Yatra.com.
For India’s travel industry, it’s a double whammy. On one hand, it is the weak rupee and, on the other, the slowdown in the economy. However, travel agents say recession is yet to show its impact on leisure travel. ?The sentiment has been low. Its early days, but we will see travellers downgrading their vacation. For instance, those who take flight might look for a road option,? explains PR Srinivas, Deloitte’s India head for tourism, hospitality and leisure.
Though weak rupee translates into a cheaper Indian holiday for foreign travellers, inbound traffic too hasn’t seen a strong growth as Europeans have tightened their travel budgets. Europe, which is grappling with a financial crisis, is one of the main source markets for India. According to the ministry of tourism, November, the second-best month for foreign tourist arrivals in India, has recorded the worst monthly growth rate so far in this year. The month saw only a 4.7% growth in arrivals this year compared to 12.3% that it recorded last year in the same month.
Some tour operators maintain that it’s not been a bad year for travel and 2012 will be healthy too. ?We witnessed a 25% growth in all segments of travel this year, be it inbound, domestic or outbound travel. And we are quite bullish about the summer of 2012 as well. We have introduced our summer offers already and the bookings are in line with our expectations,? says Peter Kerkar, director, Cox & Kings.