The drop in rupee value is a double-edged sword for the tourism industry. While foreign travellers will prefer India as a vacation option, the domestic hospitality sector may bear the brunt of high import prices for certain liquor and food items.

Generally, currency devaluation does not impact air tickets; however, hotel tariffs and shopping get expensive.

“As the price of rupee falls, liquor and food items that we import automatically get very expensive. Another disadvantage that the industry will face is that the guest who pays in dollars would get the hotel room at a cheaper rate,” said Tarun Thakral, Chief Operating Officer, Le Meridien. Other factors such as utility and procurement costs going up will strain our profits, he added.

On Tuesday, the rupee plunged to a record low of 70.05 against dollar.

Industry observers also believe that Indian travellers will avoid a trip to the US and explore other options.

“Outbound tourists might prefer going to other destinations such as Turkey, Russia, and Indonesia where the value of the rupee is the same or at least it has not fallen,” said Sharat Dhall, Chief Operating Officer (B2C),

Industry watchers believe that an 8-10 per cent fall in room prices is likely post rupee slide which might make India an attractive destination.

“Meetings, Incentives, Conferences and Exhibitions (MICE) would be one segment to benefit from the fall in the rupee. Those planning to host a conference would look to India because of cheaper rates,” said Garish Oberoi, President, Federation of Hotel and Restaurant Association of India (FHRAI).

Positive impact

Another positive impact is an increase in the number of foreign travellers to India.

“The US is one of the large inbound markets for India and with this rupee depreciation there might be an increase in the number of travellers there,” said Dhall.

Uttar Pradesh and Rajasthan could be some of the sought-after destinations among foreign travellers.

It is not a suitable time to go to places such as Kerala, Goa, Andaman and Nicobar Islands — which are most preferred by foreign travellers — due to the monsoon, say experts.