While the outbound tour industry is still trying to cope with the fall in rupee against the dollar, the inbound operators are making sure that they make hay while the sun shines. Hotel rates may be an issue, but agents are optimistic.
Rajiv Mehra, Vice President, IATO
The inbound traffic will not be much affected by the falling rupee. Travelling to India will become slightly cheaper as compared to the outbound, which would bear the brunt for the decline in the value of rupee. We have bigger concerns and are more affected due to the constant increase in fuel prices in tourist transport, increase in monument fee and rise in visa fee. These are some of the issues which are affecting the inbound business. Hence, whatever gain we might have got owing to the rupee fall has been negated.
Debjit Dutta, Chairman, IATO West Bengal Chapter
The fall in rupee has always been profitable either to inbound tour operators or to foreign tour operators (FTO), depending on which currency they quote in. If a package has been quoted in dollars at a previous exchange rate, an inbound operator would benefit and would make some profit due to conversion rates. On the other hand, a package quoted in INR would become cheaper for the FTO. However, how much of this benefit is passed on to the final customer still remains unknown. In case of outbound, the industry is facing severe hurdles due to the falling rupee against the dollar.
India becoming cost-effective
Subhash Goyal, Secretary General, Federation of Associations in Indian Tourism and Hospitality
India is increasingly becoming a more cost-effective destination. In terms of variety for a traveller, India has so much to offer. India is not just about the Taj Mahal, Kashmir, Kerala and Himachal Pradesh. Every state in the country has unique selling points and is full of wonders. India is perhaps one of the greatest shows in the world. A large number of foreign tourists are visiting India every year and I believe that a stronger currency will further lead more and more foreign tourists to one of the most beautiful countries in the world.
Sunil C Gupta, Chairman, IATO Northern Chapter
The falling value of rupee against the dollar makes India cheap and attractive for foreign travellers. There are two segments of inbound tour operators—those who work with FTOs and those who sell directly. Those that work with FTOs do groups; series departures and big tour operators; pass the benefit of exchange rate on to their foreign partners, which in turn is passed on to the end customer, as travellers are knowledgeable. There are less chances that the tour operators would be benefitted from it as this makes the destination more attractive to the customer. However, there are several aspects that go in packaging, and make tourists choose the destination apart from the cost like infrastructure development and marketing.
Vinayak Koul, Director, Snowlion Expeditions
As far as my company’s business is concerned, I don’t think the falling rupee will have a major impact on the number of tourist arrivals in India. I believe it will just have a short-term effect on the business. Our quotations have been sent to clients long back. For the upcoming season also, we have planned bookings in advance. We, as tour operators, are taking care of the quotations being sent out to avoid confusion and dilemma regarding the prices. Although the current situation will certainly help inbound tour operators get more revenue flowing at the moment, I believe it will not lead a big leap in the number of arrivals. This is a temporary phase and the rupee will soon become stronger again.
Ravi Gosain, Treasurer, IATO
The depreciating rupee can benefit export businesses like ours, at least for a short term, as the exchange rates are low and the packages are cheaper currently. In the future, all the quotes for the next year will be done on the current rate and after prices come back to normal, it will have a negative impact. As most of the inbound bookings are made eight-nine months beforehand, it will have a serious impact on the business if the price of dollar against rupee is not stabilised by December. FTOs will then see losses and we will face competition from our neighbouring countries.
Sandeep Jain, Managing Director, Special Holidays Travel
We have seen the devaluation of currency playing a positive role in inbound tourism of many countries, but that is not the only reason for increase in inbound tourism. For example, countries like Egypt and many BRICS nations like Brazil, which faced devaluation some years back, could not see an increase in incoming tourists despite that. This is because today India, despite the devaluation of rupee, has a positive image around the world. The packages would be cheaper only for countries using USD or Euro, but prices remain the same for countries in Southeast Asia and other nations.
Rajnish Kaistha, Joint Secretary, IATO
The devaluation of the rupee would certainly make the hotels and shopping cheaper for foreign tourists. However, domestic flights and transport might not be affected much because of the high fuel price. Overall, we expect the falling rupee to make the package price cheaper, while bringing more MiCE tourism to India. The depreciation of currency of other countries like Turkey, South Africa, Malaysia, Indonesia and even China may negate the benefits that India could have. This would help countries such as Britain, USA and Japan.