Indian outbound travel remains robust, amidst currency fluctuations

Given the fluctuation in the rupee, vis-à-vis the dollar and other currencies, some interesting outbound trends have emerged. Contrary to the obvious expectation that outbound would suffer on account of higher cost involved, Indian travelers are taking to newer destinations and figures indicate the industry is robust and destined to keep growing. with South-east Asia emerging as a clear favorite. There is no let up in the cruise market, India being a consistent growth market over the last many years.

Common sense dictates that a stable currency is a good omen for tourism and travel, as consumer sentiment remains positive. The last couple of years have been full of currency fluctuations. At the time when the article was filed, rupee stood at 68.83 to a dollar – which has risen consistently since 2014. Against one Pound sterling, rupee was at a hefty 98.98; and, at 48.39 against the Australian Dollar which has, in fact, come down from its peak in 2014. A look at how rupee stands against some of our neighbours tells us that while it has remained, more or less, stable at 48.91 to a Singapore dollar; it has dropped heavily vis-à-vis the Malaysian Ringgit, and stands at a measly 16.39.

As the dollar touches an all time high, many within the tourism fraternity have argued that the outbound to the USA could get impacted. An article in reputed English daily went as far as stating that Indian outbound was down from all corners, and was going to have a profound impact on the wider tourism industry. After all, the Indian currency has declined as much as nine percent vis-à-vis the dollar in the last year.


Karan Anand, Head, Relationships, Cox & Kings, however, argued that it was not only the rupee that had suffered this fate. “Currencies across the world have experienced a decline in terms of dollar. For example, the Euro has declined by 19 per cent; the Malaysian Ringgit by 22 per cent; the Australian dollar by 22 per cent and the Thai Baht by nine per cent. But this depreciation has been registered only vis-à-vis the USD and not with other currencies,” he said. It, essentially, means that despite the harrowing time that the rupee is witnessing, it is doing well with regard to Euro or other currencies, making travel to those destinations as competitive as it was before. He, in fact, noted that it was the devaluation of their currencies vis-a-vis the dollar which was going to continue fuelling more travel to those destinations. Adding that the number of Indians who flocked to European destinations and the USA had actually gone up, he said that, “for the Indian customer, rupee impact is minimal. They work around it by opting for group itineraries.”


Sharat Dhall, president, observed that the fall of rupee with regard to the dollar was impacting the sentiment of travelers to the USA who get swayed by the perception that it was going to be difficult to manage expenses. “Although, there is an element of truth in the fact that shopping, local travel and dining does get a tad expensive. But, there is not as much impact on the outbound as some presume it to be,” noted Sharat Dhall. “It is true that most of the US bound travelers from India have friends or relatives in the USA, and they do not put up in hotels, but perception does matter. There has been some impact on the outbound to the USA, but Europe remains intact,” he added.


Rati Dhodapkar, MD, Abercrombie & Kent Vacations, too, believed that fall of the rupee hadn’t much impacted outbound from India, even when it came to the United States. She told us that the great asset USA had, for tourism, was segmented products with many price points.

Given that the rupee stood at 77.00 against a Euro, and it had actually come down from 2014, Europe may gain in outbound numbers.

Sharat certainly thought so. “We have seen tremendous interest in summer holidays in Europe for the next year,” he noted. Giving further insight into the European market, Sharat said that the east European market was a niche market and most of the outbound preferred customized packages.

On a second perusal, rupee was better placed in comparison to currencies in South and South-east Asia, when put against the US dollar and the Euro. Its consequential impact can be gazed from the fact that there has been a substantial growth in outbound to the region. According to Sharat Dhall, as the rupee was doing better than the Thai Baht, South Asia remained a hot market for outbound. “In terms of top Indian outbound destinations, South Asia, Middle-east, Dubai and Australia have been doing well. Although, there had been a growth in outbound into Russia and China, they continued to remain smaller markets for Indians,” he explained.

Karan Anand, too, believed that the fall in rupee actually benefitted Indian travelers who wished to travel to overseas destinations as their cost of holidaying had declined – and this was most visible in increasing number of visitors to South Asian countries. “The trend has fuelled the demand for short haul destinations such as Malaysia, Thailand, Singapore and Hong Kong, and long haul destinations such as Australia and New Zealand, in this season,” he shared. He stressed that minor fluctuations in the currency did not have a great impact on travel plans of Indian leisure travellers. “Malaysia, Thailand, Singapore and Hong Kong are the most favoured destinations because of better connectivity, in terms of number of airlines operating to India and direct flights from India, and simplified visa processes,” he added to explain that robust air-connectivity also played an important part in stronger footfalls to these destinations. “As travel to these countries has become cheaper due to the devaluation of their currencies vis-a-vis the dollar, it is an added advantage,” he further said.

Rati attributed the interest in unexplored parts of South and South-east Asia to continuous efforts by tourism boards, the travel fraternity and constant exposure by the media.

Industry insiders believe that despite the fluctuations in the currency, the urge to travel will keep the outbound numbers strong. Karan Anand said that the fascination to travel overseas was going to continue to remain very strong among Indian travellers leading to a non-stop growth in outbound. Sharat, too, believed that the continuing turbulence in the currency was not going to deter Indians from travelling overseas. He exuded confidence that outbound would continue to remain strong, “young Indians are continuously seeking more experiences and as the economic prosperity trickles down to tier-2 and tier-3 cities, we will continue to have more and more Indians heading abroad,” he believed.

Rati, too, noted that despite the currency fluctuation, and economic changes, the fundamental factors motivating Indian consumers to travel abroad remained intact. Adding that travellers may re-evaluate the scope of their trips and, maybe, opt for short haul destinations, she said that, “otherwise, it is business as usual. Indian vacationers are now, also, starting to experiment newer and unexplored countries, globally,” she opined.

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