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This summer, travelling overseas is going to get expensive by 10-15 per cent due to changing currency rates.
While the dollar has not fluctuated much, currencies such as euro, rand and yen have gone up since last summer. For instance, an 8-day package tour to Japan by SOTC, which was ₹1.80 lakh is now above ₹2 lakh, which is sync with the yen going up.
“Almost all currencies except the dollar have gone up, but it is the euro which has stepped up drastically versus the rupee, making travel more expensive this summer,” said Rajeev Kale, President & Country Head - Leisure Travel, Thomas Cook.
Even though there are travel companies advertising heavy discounts and are even willing to bear the 5 per cent GST charges, travel costs have still gone up.
“Travel companies have been giving discounts in the form of lessening the additional burden of GST and are advertising to extend the price benefit. But there is a major difference in the cost of travel since last summer as currencies like the euro have gone up by almost 11 per cent with average room rates across Europe going up from €50 to almost €90 today,” says Sriram Rajmohan, CEO& MD, Club 7.
GST scheme
With the peak season for travel coming up, travel companies such as Cox&Kings have already extended its GST scheme, which entails incurring the cost of 5 per cent GST rate in its packages.
“We were the proponents of the GST scheme. Being the largest leisure travel company, our margins are better than our competitors and we have decided to pass on the savings to our client base by buying better from our suppliers. Paying the 5 per cent GST is going to be an integral part of our strategy to derive value for our clients,” said Peter Kerkar, Group CEO, Cox & Kings.
Such schemes are possibly making sure Indian travellers are not deterred by the changing currency rates. “While the dollar has not fluctuated, most of the other currencies are up by almost 15 per cent. But business is brisk as Indians still prefer to travel to destinations such as Europe and South Africa this summer,” says Amit Jain, Director, Gem Tours & Travels.
In fact, despite the euro getting steep, travel to Europe remains buoyant this summer. “Europe continues to be the most-selling destination during this period along with the Balkan countries and Russia,” added Rajmohan.
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