The impact of the rupee breaching the 90-per-dollar mark is no longer limited to broader macroeconomics. The big concern is, will it eat into your holiday budget? Does it have the potential to increase the cost of your next international travel?
The currency’s weakness, triggered by uncertainty about a trade deal with the US, also comes at a time when the dollar has been regaining strength globally.
International airfares, hotel bookings and packages may see a hit
To give a better context, India’s outbound tourism market is set to reach Rs 5.01 trillion by 2030, with over 50 million Indians set to explore international destinations by the end of the decade, as per a report by Research and Markets.
“When the rupee softens, we see a direct impact on what travellers end up paying abroad because almost every component of an overseas holiday is priced locally,” Karan Agarwal, Director, Cox & Kings, told financialexpress.com. “The same rupee budget simply buys a little less.”
Outbound packages have also climbed, potentially on a higher exchange rate.
Travel operators estimate international holidays could see a sharp jump, especially the likes of hotel contracts, cruises and local tours billed in dollar, euro or British pound
This is on the basis of the 4.5% depreciation in the Rupee over the last year. This makes the currency one of the worst-performing ones across Asia.
On-ground spending like meals, metro passes, museum tickets and taxis abroad move one-for-one with the exchange rate. Even if Paris or London hasn’t become more expensive locally, the Indian traveller is paying more, simply because the rupee buys less.
Fares may rise gradually, not overnight
Airlines are watching the rupee’s movement but are unlikely to revise fares aggressively until the trajectory becomes clearer.
“Airlines generally wait to see whether a currency trend sustains before major pricing action,” Agarwal said. “The adjustment tends to be more visible on long-haul routes, where foreign-currency exposure is higher.”
Late bookers, however, will feel immediate pressure. “Some soft upward movement is visible because hotels and land arrangements abroad are directly tied to local currencies,” he added. Last-minute winter bookings are already priced at a premium due to peak-season demand, compounding the currency impact.
The year-end period piles seasonal premiums on top of currency pressure. December–January is the global peak leisure season, when airlines and hotels charge their highest rates of the year.
Middle-class international travel budgets under scanner
The financial squeeze is most visible among middle-income families working with fixed annual travel budgets. “We aren’t seeing a meaningful shift away from international holidays,” Agarwal said. “Travellers are fine-tuning plans—maybe adjusting hotel categories or trimming a day—but not cancelling outright.”
Furthermore, Agarwal added that the effect is most visible for people booking close to their travel dates because last-minute rates adjust quickly to market conditions.
How travellers are trying to cushion the blow
The currency volatility has prompted travellers to lock in rates earlier than usual. Many are loading forex cards or prepaying for hotels and tours to freeze today’s exchange rate and avoid further downside.
Others are changing destinations. Travellers flexible with their plans are shifting from Europe and the US to relatively cheaper Southeast Asian or West Asian countries, where rupee-denominated spending stretches further, even if packages remain benchmarked to the dollar. “Domestic travel always stays strong, but we aren’t seeing clear evidence that people are replacing an international trip with a domestic one purely because of currency movement,” Agarwal noted.
Group travel is also gaining popularity as families split transport and accommodation costs. Loyalty points, air miles, and promotional forex deals from exchange platforms are being used more aggressively to lower the total outgo.