‘Falling rupee positive for growth of inbound tourism’
The sharp depreciation of the rupee against major currencies will help inbound tourism to grow while outbound travel will be hit.
“A weakened rupee has made India a cheaper foreign destination,” said Subhash Goyal, Chairman, Assocham Tourism Committee. “We expect inbound tourism to benefit by 10%.”
However, the rupee’s decline would be bad for outbound travel, he said. “We expect this segment will have negative growth this year. The impact will be felt later,” Mr. Goyal added.
While Indian travellers had taken note of the falling rupee, they had not changed their international travel plans, said Karan Anand, Head, Relationships, Cox & Kings Ltd.
“In the last eight months, the rupee has fallen over 8% vis a vis the dollar. However, this has had little impact on people taking trips to dollar destinations. If the rupee may weaken further against the dollar, travellers may trade down — like reduce the duration of travel, stay in four-star accommodation and cut back on shopping to cut down on expenses while on the trip,” Mr. Anand said.
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“However, it is very rare that travellers cancel or reassess their choice of overseas destination that has been planned for months.”
Due to the overall strength of the rupee against the euro Indians would likely prefer to visit Europe.
“In the last three months the rupee has strengthened against the euro by 1.64%; to the Pound by 1.81% . This indicates that countries in Europe will not find it hard to attract the ever-growing number of Indian tourists,” Mr. Anand said.
He said some travellers were likely to want to take advantage of positive exchange rates and would plan travel to countries whose currencies had weakened against the rupee like South Africa, Turkey and Mexico. “One can look at alternative trips to destinations such as South Africa, where the rupee has appreciated against the Rand or Turkey where the rupee has appreciated against the Turkish Lira or the Mexican Peso which is falling further will make travel to Mexico favourable,” he added.