Peak season foreign holidays hit

Travellers still holiday, but for a shorter duration, and perhaps to places like Thailand, Singapore and also within India

Holiday plans for the peak season, that starts in October, have already been hit. Indian travelers bound for long haul destinations such as the UK, Europe and the US during the festival season have cancelled about 10 to 15% bookings in the past few days after the rupee breached record levels against dollar, pound and euro, according to industry estimates.

Leading online travel company MakeMyTrip pointed out that the October to December period would show up the impact of the rupee fall on outbound trips. Rajesh Magow, co-founder & CEO of the company said,”We expect there to be some fluctuation in demand for long-haul travel to Europe and UK but the trend will only be clearly indicated during the bookings for peak travel period—October to December.”

But, according to Subhash Goyal, president of the Indian Association of Tour Operators (IATO), his own company, Stic Travels, has already witnessed around 15% cancellations to several overseas destinations like Europe, UK and the US for the holiday season starting October. Industry-wise impact would be similar, he said.

But Goyal indicated that Indian travelers were also making adjustments in their travel plans. Rather than 10 days of outing, many were cutting down holidays to four or five days. Less expensive destinations within Asia or even in India would get preference over the West too.

In fact, companies focused on inbound travel are busy planning their strategy to make the best of the rupee tumble. Rajiv Kohli of Creative Travel and also vice-president of IATO is one such.

“Rupee has been gradually weakening and people were getting prepared for the lows,” said Kohli, adding that people who want to travel would still travel, though the cost would be higher. Pointing out that there’s bound to be a change in destination, he said, “this is good for inbound travel.” There are plans to offer around 8 to 15% reduction in on-ground arrangement, that includes hotels, car transfers and guide services across favourite holiday spots within the country September onwards.

In India, holiday travels work around school holidays and festivals, unlike in the West when it’s a year-round phenomenon, said an analyst. “So, the impact of the rupee fall would be spelt out in the next peak season, that’s October,” he added.

 According to Magow of MakeMyTrip, one must note the dynamic pricing constituted in outbound holiday business. Some components are calculated in INR (usually airfare, visa, travel insurance etc) and some in the respective foreign currency (typically, land arrangements such as hotels, transfers etc).

“Hence the general leaning towards change in pricing for long haul destinations does not constitute more than 10-15%, and ideally much lesser at a short haul destination.”

Magow said there were requests for deferring travel plans, but that MakeMyTrip “had not witnessed any additional cancellations”.

In 2012, 14.92 million Indians travelled to overseas destinations, recording a growth of 6.7% over the previous year. Foreign tourists' arrival in India was pegged at 6.58 million, growing at 4.3%, according to data available with the Ministry of Tourism.