The Hindu Business Line : Outbound travel costlier but biz is brisk

Kolkata/Mumbai, Aug. 16 The Indian traveller headed overseas is seemingly little deterred by the rising cost of travel owing to the depreciating rupee.

There has been a 15-20 per cent price increase in outbound travel packages, Mr Madhavan Menon, Managing Director of Thomas Cook India, told Business Line. But for the frequent outbound traveller this price increase is “minor”, say travel industry experts.

The currency fluctuation has had a selective effect on customers, said Mr Subhash Motwani, director of Mumbai-based travel agency Compact Travels: “The increase in package prices has not impacted the outbound travel to dollar-dominated countries such as the US, places in the Far East and Egypt, as the variation (rupee against dollar) has only been of about Rs 4-5. However, travel to euro-dominated countries has seen a marginal impact of 10 per cent as the appreciation of that currency against the rupee has been much more.”

Another reason is that international airlines have not hiked fares, creating the perception that overseas travel is still within reach. “While airfares in the domestic market went up as ATF prices rose, international airlines did not hike fares,” said Mr Motwani.

“Due to falling load factors and the overall slowdown in the global aviation industry, overseas carriers have in fact introduced various discount schemes. For example, if a customer books a ticket before a stipulated time then he would still get cheap fares.”

Travel companies like SOTC are offering attractive schemes and promoting destinations such as Thailand and Hong Kong. “Though the fuel surcharges are high, the occupancy and load factors are coming down, giving us good deals. We pass on the benefit to our customers,” said Mr Sunil Gupta, COO of SOTC.

The steady stream of Indians travelling on business has also kept business going. “Many of the outbound trips made by Indians are corporate in nature, and they are the last category to be impacted by price increases,” said a senior industry analyst.

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