Dropping Indian rupee will boost inbound tourism

The sharp drop of the Indian Rupee against major currencies will have a positive impact on inbound tourism, experts say.

“A weakened rupee has made India a cheaper foreign destination and we expect to have around 10 per cent hike in inbound tourism,” said Subhash Goyal, Chairman, Assocham Tourism Committee.

However, the decline in rupee will have an adverse effect on outbound tourism, which may lead to a negative growth in tourism this year.

Another travel agent states, Indian travellers would have taken note of the falling rupee, but so far they had not changed their international travel plans.

“Indian rupee has fallen over 8 per cent against dollar in the last eight months. However, there has not been much effect in outbound tourist to dollar using destinations. If the rupee my decline further against dollar, travellers may adjust their travel cost by reducing the duration of travel, stay in moderate accommodations and cut short shopping,” said  Karan Anand, Head, Relationships, Cox & Kings Ltd.

“However, it is less likely that travellers cancel or reassess their choice of overseas destination that has been planned for months,” he added.

Meanwhile, rupee has strengthened against the euro by 1.6 per cent; to the Pound by 1.8 per cent, during this time.  Therefore, outbound tourists to European countries will not be much affected due to decline in rupee against dollar.

Anand also said that some of the travellers were likely to take advantage of positive exchange rates and would plan travel to countries whose currencies had weakened against the rupee like South Africa, Turkey and Mexico.