The Telegraph
Tuesday , July 9 , 2013
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Rupee freefall hits foreign holiday

Subir Ganguly had booked a Europe holiday for his family of three at Rs 1.4 lakh per person three months ago. Five days before the journey, he was told the trip cost had been revised to Rs 1.7 lakh each.

Ganguly’s travel agent didn’t dupe him, the rupee did.

“The travel agent said the difference in euro and pound exchange rates between the time I had booked the trip and the date of departure was huge. I had little choice but to pay Rs 90,000 extra. With just five days to go for our holiday, I couldn’t have called it off, could I?” the medical practitioner said.

In the first week of April, the exchange rate was Rs 73 to the euro. On Monday, it stood at Rs 78.

Ganguly not only paid Rs 30,000 per person extra for the 10-day tour of the UK, France, Rome, Italy, Germany and Switzerland, he was also forced to spend Rs 50,000 more than he had planned at the money changer to cover daily expenses and shopping.

A pre-booked foreign holiday package has several components of payment. The last part, usually paid close to the travel date, is directly affected by the fluctuation of the rupee against the dollar, euro and pound.

When booking a holiday package, a tourist is required to pay for air travel, visa and insurance upfront. These components are calculated in rupees and not affected by currency fluctuations.

“But the cost of hotel stay, local sightseeing and special additions such as a cruise or a coach trip needs to be paid in foreign currency. The traveller can pay the agent in rupees but the amount will be calculated according to the dollar, euro or pound rates on a given day,” an official of a travel company said.

Travel agents generally make the bulk of the payments for hotel bookings and other expenses closer to the travel date. “This is the standard practice because the number of travellers isn’t confirmed until two to three weeks prior to the departure date,” the official said.

Ganguly isn’t the only one to suffer. Over the past couple of weeks, Calcuttans going on international holidays have had to shell out 20 to 25 per cent more than their original budget because of the rupee slide.

Puja holiday plans are already being altered for fear of a further plunge. Some are putting their plans on hold, hoping the rupee will recover by then.

“Puja is the biggest holiday season in Bengal with entire families travelling together. But with the rupee weakened, the expenses for a foreign trip have gone up by 20 to 25 per cent. Many people are ready to wait rather than commit themselves and end up paying much more than planned,” said Anil Punjabi, chairman (east) of the Travel Agents’ Federation of India.

In Calcutta, people usually start booking international holidays scheduled for Puja from the last week of June. This year, the number of bookings has been at least 70 per cent less than last season.

Reshmi Bose and husband Chittopriyo had planned to visit Europe from October 17 but have decided to wait a while before finalising the trip. “We have been to Europe but our son Auman hasn’t, so we wanted to do this trip because of him. If things improve currency-wise, we will revisit the plan,” she said.

Some are opting for international destinations where the impact of the rupee slide will be less. Businessman Vijay Bhurani had planned a family holiday to the US for 14 days during the Puja vacation but has changed course.

“I have friends and relatives in the US whom we had planned to visit during Puja. But given the rupee situation, we have decided to see China instead,” he said.

Has the rupee fall affected your holiday plans? Tell