Summer holidays are near and many families are preparing to travel abroad. But if you are also thinking of packing your bag, then it is important to take a look at your budget once again. The foreign trip which seemed affordable till a few months ago, has now suddenly become expensive. The biggest reason for this is the continuous decline in the Indian rupee against the US dollar. In the last one year, the rupee has fallen by almost 10 percent and currently it is swinging around the historic low of 94 to 95 rupees against the dollar. Middle East tensions, rising crude oil prices and withdrawal of foreign funds have put huge pressure on the rupee. This is directly impacting the common man’s journey, which he had dreamed of for months.
traveling abroad has become so expensive
The effect of this weakness of the rupee is not visible gradually, but immediately as soon as you make your booking. In simple words, the cost of your tour has increased by 12 to 20 percent. For example, if you were earlier running with a budget of Rs 2 lakh, now you will have to spend Rs 2.2 to 2.4 lakh for the same trip. At the same time, if you are going to a foreign destination with the whole family and your budget was Rs 6 lakh, then now the bill can reach Rs 7 lakh. This means that without adding any additional facilities to your journey, you are paying around Rs 1 lakh more out of your pocket. In terms of figures, a $3,000 journey which used to cost Rs 2.46 lakh earlier, has now increased to Rs 2.85 lakh. The biggest jump in this inflation is being seen in hotels and local expenses (15 to 20 percent) as well as flight tickets (7 to 15 percent).
America-Europe travel is the most expensive
This inflation is not the same for every country. This is directly related to where you are going to spend your holidays. If your plan is to go to America, Britain, Europe or United Arab Emirates (UAE), then you will get the biggest shock. The currencies of these countries are directly linked to the dollar or euro, due to which the cost of travel here has increased by 15 to 20 percent. On the other hand, if you want to keep your budget balanced, then Asian countries like Thailand, Vietnam or Indonesia can prove to be a better option. In these countries, the local currency is relatively stable or behaves differently against the dollar, resulting in only a 9 to 12 percent increase in travel spending.
Understand the web of hidden expenses
Apart from flights and hotels, there are many hidden expenses which are burning a hole in your pocket due to the weak rupee. There has been a huge increase in Visa fees, travel insurance and forex markup and tax (TCS) charged on using credit cards abroad. Despite this, Indian travelers have changed their ways instead of canceling their trips. People are now planning short trips instead of long holidays. Expensive shopping or non-essential luxuries are being cut down and money is being spent only on essential experiences. Overall, enthusiasm for travel has not diminished, but now people are making more cautious and value-based choices.
How to reduce the financial burden of your travel?
You do not have control over the movement of the rupee, but you can definitely reduce your losses by making your planning smart. Avoid last minute booking and book flights and hotels well in advance. Make your forex purchases in installments rather than all at once, so you can average out exchange rate fluctuations. Additionally, using a prepaid forex card for spending abroad is a wise move. This protects you from sudden hefty interchange charges when you swap cards. Additionally, ‘all-inclusive’ packages that plan everything in advance can also keep you safe from unexpected expenses during your trip.
Also read- Explainer: RBI made the rupee strong, this is how it became a trouble-shooter, why is the future of the dollar in danger?