The rupee’s crash has swept away banker Nupur Sood’s dream of a holiday in Venice: instead the 35-year-old will settle for cold beers on the beaches of Goa.
“We are pampering ourselves with a leisurely holiday but it will be domestic. I guess it is the only way to compensate,” said Sood, who plans to stay next month at the plush Grand Hyatt hotel in Goa, as a consolation for missing her holiday of a lifetime in Italy.
Sood is among India’s growing urban middle class, whose rising incomes over the past decade made holidays abroad affordable. The rupee is taking foreign travel beyond their reach and many are planning vacations in their home country.
While this will be a blow for tour operators promoting overseas travel it will be a shot in the arm for the domestic stagnant hospitality sector, which is reeling as high inflation and rising import costs eat away at profit margins.
Hotel groups, including Starwood Hotels & Resorts Worldwide, Marriott International and Hotel Leelaventure are seeing a spike in bookings for the winter season from domestic tourists and from foreign travellers, who importantly bring in foreign exchange.
“There is a lot of optimism in the hotel industry that, for both these reasons — it being cheaper for inbound travellers and a substitute for outbound travellers — we expect to have a good winter,” said Dilip Puri, managing director, India, Starwood Hotels.
The rupee hit a record low of 68.85 against the dollar on Wednesday, down about 20% for the year.
Its slide has contributed to a 35% surge in domestic tourism between January and June and a 15-20% fall in outbound tourism over the same period, according to Assocham data.