With rupee falling, shell out more for visa fees, forex and tour costs.
A holiday abroad may be a perfect way of ending the year on a high note. But, if you haven’t already made your bookings, this Christmas may make you see red. Reason: the depreciating rupee.
According to Aashutosh Akshikar, CEO, Mercury Travels, the costs are already up by eight to 14 per cent for a family of four (two adults and two children), compared to last year. This is mainly because a part of the cost is charged by travel operators in foreign currency, depending on the destination. This amount is mostly used for hotel bookings, travelling expenses at destination or any other expenses paid in foreign currency by the operators.
So, say you take a 16-day ‘All of US’ tour with SOTC. It costs Rs 84,999, plus $2,569 per person. At the prevailing rate, you’d be charged about Rs 1.33 lakh (for the dollar amount), Rs 5.32 lakh for four. Comparatively, you would have paid Rs 1.15 lakh last year (Rs 4.62 lakh totally) at the exchange rate of Rs 45 for a dollar. A difference of almost Rs 70,000!
The rupee has lost 14 per cent against the dollar since last November, almost Rs 52 for a dollar against the Rs 45 of last year. Other currencies, like the euro or pound, aren’t giving much more relief. The rupee has slid by 12-13 per cent against these as well for the same period. The euro is available for Rs 69 as against Rs 60 and the pound for Rs 80 as against Rs 71 last year.
The tour cost typically includes return airfare, hotel accommodation and local sight-seeing. All other costs are additional and chief among these to get impacted by the exchange rate fluctuations are visa fees. “These (visa fees) are payable in rupees. However, most consulates fix their fees in own currency and the resultant amount payable will differ as per the exchange rates,” says Akshikar. For instance, the US consulate's visa fee of $140 per person for tourist visas remains unchanged from last year. However, this year the conversion rate is pegged at Rs 54, meaning a fee of Rs 7,560 as in VFS Global’s US visa website. Last year, for the same fee you would have paid Rs 6,440, a difference of over Rs 1,000. Similarly, for a Schengen visa (that allows you to travel between 25 European nations), you must pay an equivalent of ¤60, meaning you pay Rs 4,140 this season as against Rs 3,600 last year.
The final straw but also the most controllable expense in your travel budget is the the foreign exchange (forex) you plan to spend on shopping, food and other miscellaneous expenses. Ravi Menon, head —forex, Cox & Kings, says on an average, tourists travelling to the US carry $500 per head. Those travelling to Europe carry about ¤1,000 and £200-300. This year, due to the depreciating rupee, you will spend more for the same amount of shopping.
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Other components like travel insurance will stay unaffected by the rupee movement. The claim amounts will be higher because of costlier forex. However, insurance players say the number of claims is fairly low; plus, the rupee volatility is a temporary phenomenon. Therefore, raising premiums does not make much sense.
| CHANGING CHARGES Due to rupee depreciation the visa fees payable in rupees have gone up, as compared to last year. This, despite the fees remaining unchanged. | |||||
| Destination / Visa Fees | Nov ‘10 (Fees payable in Rs) | Exchange rate | Nov ‘11 (Fees payable in Rs) | Exchange rate | % rise in rupee payable |
| US = $140 | 6,440 | $1=Rs 46 | 7,560 | $1=Rs 54# | 14.81 |
| UK = £76* | 5,250* | £1=Rs 75 | 6,080** | £1=Rs 80 | 13.65 |
| France = euro 60 | 3,636 | euro 1=Rs 60.6 | 4,110 | euro 1=Rs 68.5 | 11.53 |
| Germany = euro 60 | 3,600 | euro 1=Rs 60 | 4,100 | euro 1=Rs 68.33 | 12.20 |
| Source: VFS Global *For short visit **Last year the fee was £70 # Quoted by the US consulate | |||||
In conclusion, if you do not want to be caught unawares next year, start planning for your next foreign holiday right away. When you book, don’t forget to check the exchange rates. As Rajiv Duggal, managing director, Kuoni India, says, “The travellers have to pay the forex component at the prevailing exchange rate.” Hence, if you book your tour today, you will not benefit from early planning but rather pay a higher amount for the forex component.
Similarly, the buying on dips formula so successfully applicable in the stock markets can be practised while buying forex, too, considering, you can buy forex 60 days prior to your travel dates and retain up to $2,000 or equivalent in cash or travellers’ cheques at any time.
